Global Ad Trends For FMCG & #COVID19

Adrian J Cotterill, Editor-in-Chief

“The global economy is set to fall into recession, with the advertising market likely to follow in the first half of this year, though FMCG brands are better-placed to weather the storm” says WARC, the international marketing intelligence service.

The Purchasing Managers’ Index (PMI), a monthly survey of trading conditions among purchasing managers in private sector companies, for February and March show the worst results for the services sector in recent history across the US (39.1, whereby a value below 50 indicates decline), UK (35.7), Japan (32.7), the Euro area (28.4) and China (26.5).

The COVID-19 crunch is filtering through to advertising; RTL, Europe’s largest broadcaster, has stated that COVID-19 is hitting ad bookings, while in the US NBCUniversal also expects a material impact, not least because its Olympic coverage has now been postponed until next year.

UK broadcaster ITV reports the same, notably within the travel sector (5% of its 2019 ad revenue, or £91m) and expects ad growth to be down 10%. JCDecaux is anticipating a 10% dip too.

Baidu in China advises Q1 revenue will be down by as much as 18% while other online pure players, such as Alphabet, Twitter and Facebook are also exposed – digital channels are often the easiest to switch off in a time of crisis.

The last financial crisis removed USD 60.5bn from the advertising market, with all media apart from online search recording declines in investment. The market took eight years to recover from this shock after accounting for inflation and currency fluctuations.

James McDonald, Managing Editor, WARC Data, and author of the research, told us “The current downturn may not hit FMCG as hard as other product sectors, but it is likely to be consequential in terms of changing consumer purchasing behaviour. A sharp increase in e-commerce activity may result in online players becoming more significant as the gatekeepers to FMCG shoppers.”

A summary of WARC’s Global Ad Trends – FMCG & COVID-19 report is available here.

Leave a Reply