Advertising agency

Decoding the impact of Covid 19 on Advertising Industry

05 May, 2021

The coronavirus has impacted everyone in one way or the other and the advertising industry is not an exception. In fact, the advertising industry was one of the first to be adversely impacted. During the initial stages of the pandemic, when the lockdown was declared there was a 360-degree shift in the working pattern of agencies. Many agencies had clients who had postponed or called off the campaigns and many agencies had clients coming up with new innovative campaigns. In both cases, the agencies were under tremendous pressure to cope with the situations and also fulfil the clients' requests. Apart from this, the agencies were figuring out ways to retain their employees and keep the business on in order to meet their client requirements.

There was a huge decline in advertising investments during 2020 as every business was undergoing cost-cutting. This considerable drop put all the agencies in a tough spot as many of them started losing business too. The survival of agencies was becoming difficult as approximately 75% of the brands had reduced the advertising spends during the lockdown. The advertising and other media agencies lost somewhere between 54 to 91% of their billings. There was an immediate 30% drop in advertising investments. Most of the media including OOH, hoardings, print, and radio had seen a dip, while there was a significant increase in investments on digital platforms during the days of confinement. Agencies started losing their revenues and many of them were forced to let go of some of their staff or even temporarily shut down, some of the players who had an established clientele could cope with these tough times and focus on survival. Several agencies began to look out for ways to go online and continue business during unprecedented times.

Multiple brands and marketers across industries, reduced or even stopped advertising budgets as this was an additional burden. Some of the brands and marketers quickly adapted to these situations and started looking out for creative advertising solutions. This is when advertisements started being shot on smartphones at home and digital platforms became the focus. Many brands started actively engaging with social media platforms like Instagram, Facebook, and Tik Tok. Multiple campaigns were launched during the pandemic with creative forms of content to engage with the target audience. Some of the innovative forms of content include memes, moment-based content, Tik Tok videos, and Instagram reels. Bigger brands that have a strong presence in the market took advantage of this situation. They started creating more meaningful content that could boost engagement with their audience. These ads were revolving around the pandemic and its effect on everyone and how everyone should help each other. This made the brands more relatable and empathetic. Such responsive ads became the new trend, wherein brands started reacting to the recent happenings around them like thanking the employees, frontline workers, encouraging people to look out for each other, etc.

Advertising has always responded to the changes in consumer behaviour. Stakes were very high for both agencies and brands. Newer avenues were being explored to create top of mind awareness. Cinema and other print media advertising have significantly dipped and advertising on OTT platforms and other digital platforms is becoming popular as in-home media consumption increased. Since the beginning of the pandemic, consumer behaviour saw a drastic shift. Even the agencies and marketers have slowly adapted to this new normal. It can be said that the pandemic will shape the industry and create newer unknown opportunities.

A big salute to all the agencies who have and still are constantly fighting the pandemic!

Written by

Jia Lalwani

Brand Associate

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