Innovation and authenticity
A constant theme through the roundtable was that a period of crisis often acts as a stimulant for innovation and change. The pandemic has forced nimble advertisers to innovate and build authentic relationships with their audiences, handled thoughtfully and with empathy. The crisis has seen a shift towards fast turn-around, accessible production and authentic messaging. If this approach continues to prove effective, then it may lead to a sustainable change.
From broadcast idents and TV ads, to online content, there had been a huge amount of innovation done with a high degree of authenticity
There was a healthy debate between our experts about the likely impact of the crisis on consumers’ tolerance of advertising and their propensity to avoid it. This was a significant concern before the crisis, but has the greater uptake of ad-free SVOD services reduced opportunities for advertisers to reach consumers? Is the rise of VOD and the proliferation of quality content better news for the consumer than it is for the advertiser? There is some speculation that a shift to subscription funded and ad free media may make consumers even less tolerant of advertising when they do encounter it and even harder to target as a result.
Again though, we have to factor in that the initial changes in consumer behavior driven by the crisis may be tempered not just by a (slow) return to ‘normality’, but also the monetary restrictions of the economic recession that accompanies it. That has two implications: advertisers reducing their expenditure which hits ad-funded media who will need to emphasise non-advertising revenue streams, looking to monetize content directly (i.e. subscriptions). On the other hand, a recession will limit the ability of consumers to afford paid-for media and may make them more reliant on free, ad-funded media.
Whilst COVID had an immediate and damaging impact on overall ad revenues, this has varied from sector to sector, with online businesses – already big spenders on TV advertising - actually accelerating spend during the crisis.
Ultimately it is likely that the issues that existed before the crisis will be the most important to resolve, namely consumer frustration at poor targeting and excessive frequency. These are issues driving the WFA’s on-going cross-media initiative: poor targeting and excessive frequency irritate customers and waste advertisers’ budgets which are likely to be under even more pressure as a result of the pandemic.
Our experts agree that there will always be a space for advertising, or ad-funded content. Economic recession may limit peoples willingness to pay too much for media content directly. The explosion of SVOD subscriptions may reflect an inflation in available home time during lockdown, but with easing and less time at home, subscription fatigue may set in as people re-evaluate their budgets. Millions of people are facing a huge cut in their disposable income as government furloughs and support schemes end. Advertising will still be needed to fund free content. The priority for media owners is to establish the right mix, the right model for revenue.