Just four weeks ago, before our world was upended by the coronavirus strain known as COVID-19, no one would have foreseen that weeks later, our healthy economy would come crashing to a grinding halt. This happened at an unprecedented rate, and was so quick in its onset. With most of the nation confined to our homes without outside contact, many are fearful what the future holds.
As a media agency, we have been through crises in the past of political, social and financial natures. We have survived some of nation’s most trying times, including 9/11 and the Great Recession of 2008. Through our experience, we have seen certain trends and are anticipating that this may play out in a “similar” fashion. Being in the direct response and DTC industry, our benefit in the past, and as it is right now, is our ability to know “how the population is responding to our advertising.” We can see if they are going to the websites, calling the phones and ordering the products. We have seen in the past and are experiencing it today, that Direct to Consumer products that make things easier at home are the ones that will trend (i.e., home cooking, exercise, education, well-being, vitamins, minerals and other supplements). People will be looking for ways to save money and feel better about themselves (home care, beauty) as they exit the “quarantine” and wait for the economics to adjust.
Due to shelter-in-home orders, viewership levels are up, but people are not necessarily responding in mass due to the economic downturn they are personally feeling or apprehensive about. Thus, in trying times, River Direct works closely with TV stations and digital publishers to make sure that the rates being charged, are commensurate with the audience delivered and the orders being generated. General advertisers have a tendency to pull media when a crisis of this nature occurs and thus, media rates decline.
Many of our clients have asked us how we anticipate things playing out in the advertising/media buying world. Due to the unchartered nature of the current crisis, there’s no way of knowing – however, we offer a few scenarios:
Best-case Scenario: Social distancing works and the virus peters out by early May/June. People begin to go back to work and receive paychecks, economy starts to improve. The media will start to pick up slowly as people gain confidence. People will pull out their wallets and order product. The general-rate advertisers will come back into the space “slowly” (Q3) allowing direct response/DTC to take advantage of the situation from May going forward….4th quarter ends up being more aggressively pursued and election dollars go into the market as planned.
Delayed-Recovery Scenario: The virus starts to disappear between June and end of July….in direct response we are able to take advantage knowing how people are feeling and make it through third quarter and hope there are no virus rebounds and anticipate a strong 4th quarter for direct response; with General advertisers having a bit more trepidation but still engaged. Election dollars are there and rates are reasonable.
Lengthy-Recovery Scenario: The virus is not contained, and has a resurgence in places where we thought it had gone away and doesn’t disappear until late summer. Economy is slow in getting back to speed and trepidation continues to occur in the market place. The summer months’ rates decline precipitously and people are not confident and don’t have extra monies to spend and are not purchasing product. Personal financial burdens are tough and advertising in general is soft. We always have the advantage in knowing what to pay based upon response, but the fear is people slow down their purchasing because of the economic setback. The ad industry for 4thquarter is soft for general advertisers and those doing campaign advertising will get the ads for a very low rate due to decreased demand.
So here we are in early April, trying to predict the future, as everyone else in the world is trying to do the same. In our hearts, we are anticipating the “Best-case Scenario” and at worst, hoping for the “Delayed-Recovery Scenario.” Most importantly, we are all praying that our nation is able to work together to keep the loss of lives at a minimum, and to recover as quickly as possible on all fronts.