Page 31 - Adnews Magazine Sep-Oct 2020

The recovery
Reserve Bank governor Philip Lowe: “The Australian economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. As difficult as this is, the downturn is not as severe as earlier expected and a recovery is now underway in most of Australia.”
However, the recovery is uneven and bumpy. Note the second wave of coronavirus in Victoria.
The money is still out there and advertising budgets are still in place. Most (70%-90%) are waiting for the right signs before making a commit- ment, according to a survey by the AANA and research house Ipsos.
Jens Monsees, a former Google executive and the relatively new CEO of WPP AUNZ, is positive about the second half of the year, with COVID-19 accelerating changes he had already in place in a pre-pandemic world.
“You see already in the new norm that digital omni-channel, ecom- merce, pick up models, food deliveries are growing like hell,” he told AdNews. “More digital, more tech-based, interactions between customers and users and shoppers and the brands.”
He sees advertisers rethinking branding and media strategy. “In that new norm you obviously need to interact in a different, more virtual or hybrid way of physical and technical touch points,” he says.
Hugh Marks, CEO of Nine Entertainment, saw a pick up in activity by advertisers in the September quarter.
“I’m feeling increasingly more positive about the progression out of COVID,” he told AdNews.
“Each month is improving, the market’s getting a little less short ... we’re out achieving our targets.
“I think the market’s just planning its way out of COVID and it will be an orderly progression rather than a dramatic shift.”
The big global advertising groups all report a lift in business but it will be a while before growth returns to 2019 levels.
Dentsu Group, in its latest global results, says its plans for the down- turn to continue at a reduced rate in the second half of this year, with a “gentle” recovery expected in 2021.
The economic outlook in Australia depends on the level of restrictions needed to contain the coronavirus spread.
“How the rest of the year will pan out will all be predicated on how states manage the containment of COVID-19,” says Angela Tangas, CEO of Dentsu Aegis Network.
“No doubt the most at risk categories include retail, auto, travel and manufacturing.”
Commenting soon after the stricter stage four restrictions in Victoria, she says we should expect some decline in spend.
However, she thought it unlikely to be at the same level seen the first time round. “This further demonstrates that a market rebound in 2021 is unlikely to deliver the same volume as 2019,” she says.
The short-term nature of the market, with brands taking a cautious approach to media bookings when the coronavirus hit, has started to ease. “As we move into a new ‘normal’ and settle into a new routine, the short-term market is starting to extend much more closely to what the market has been historically,” says Rod Prosser, Network 10 and
ViacomCBS chief sales officer.
“The ‘new’ environment in which brands are now operating is now
becoming clearer, allowing them to plan to the same long-term view they had pre-COVID.
“The automotive, FMCG and parts of the retail industry, including chemists, are firing back up. Finance and insurance categories are also returning to pre-COVID levels.
“We are also seeing emerging categories such as home delivery ser- vices and ecommerce businesses take advantage of more of their target audience working from home.”
Kurt Burnette, Seven West Media’s chief revenue officer: “In the lead-up to Christmas we’re seeing some really positive signs. That’s changed since COVID when everyone was uncertain and bookings were
Research by
The Lab and Nature
Involving more than 6,000 Australians aged 18 and older:
58%want a simpler life when the
pandemic is over
36%are excited about the opportunities
post-pandemic
53%are really worried about the future
49%want things to go back to exactly how
they were before COVID-19
44%will not be able to relax until there is
a COVID-19 vaccine
48%expect the next few years to be very
difficult financially
much shorter. It’s a good sign for the market to see things get a bit longer and it means if brands don’t react quickly they could miss out.”
But geography plays a role. The change is being viewed through individual lenses, says Ben Willee, general manager and media director at Spinach.
“The lens is very different in Perth than it is in Melbourne,” he says. “It is a really important reminder that we need to work hard to understand the relevant segments within our target audi- ence and seek actionable insights for each as part of the strategic process.”
The need for flexibility. “I’m fortunate in my job that I get to speak to people all around the country,” he says. “Anecdotally there is a feeling that what is hap- pening in Victoria could easily spread to NSW and/or Queensland. If it does, we are going to need to be flexible.”
GFK RADIO PULSE, JUNE 2020
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