The average lead time for the upfront and long-term media-buying decisions for advertisers’ media plans has been cut in half since the beginning of the COVID-19 pandemic, U.S. advertising executives said in a new survey.
Prior to the pandemic the average amount of time to formulate a U.S. media plan was 4.2 months. But after the pandemic began, the average had fallen to 2.3 months, according to a series of tracking surveys of advertisers and agency executives conducted by Advertiser Perceptions, whose findings were reported by MediaPost.
In the most recent survey, conducted June 10-15, 87% of the advertising executives surveyed said flexibility was the key theme for negotiating contracts with the media.
“Radio has a creative advantage because advertisers can update spots remotely and quickly, without any video component,” Lauren Fisher, Advertiser Perceptions VP of business intelligence, tells Inside Radio. “The longer the staggered starts continue, the harder it will be to produce volumes of video, and the more likely advertisers will lean on radio in all its forms.
“Even in digital audio, where ads can run with companion video, the video isn’t a requirement. That’s a plus in a production-starved environment. Add to that the utility of radio in a regional environment; advertisers are familiar with radio’s targeting precision, and that’s an inherent advantage.”
Among advertisers and agency media buyers, ad budgeting appears to be firming up. The spread between those increasing ad spending and those decreasing ad spending has declined by 25%. Although 40% of the executives expect to reduce their spending in the fourth quarter, the number of executives increasing budgets rose to 23%, a positive trend compared with the second and third quarters.
The latest intelligence from Advertiser Perceptions’ six-part, biweekly report “Coronavirus Effect on Advertising” finds three in five advertisers will end up spending less this year, with budget declines of 12% in third quarter and 7.5% in the fourth, compared to the same period a year ago.
But that might also mean an opportunity for players in the radio and audio spaces. The latest data shows that 50% of advertisers are listening to more audio (digital, terrestrial, podcast) since the pandemic hit; 22% say they have reallocated money from other mediums to digital audio; and 38% say they plan to use radio for regional advertising in the second half of 2020.
“Advertisers have a bias toward digital when they think flexibility,” Justin Fromm, Advertiser Perceptions’ EVP for Business Intelligence, tells Inside Radio. “All media are coming up digital first. Digital platforms that can target finely and turn on/off campaigns as conditions change almost daily are in the best position. Digital audio shines here. That’s why we’re seeing a solid percentage of reallocated media dollars end up in digital audio. And as we get closer to the election, advertisers will think more broadly about regional advertising and face tighter markets. Terrestrial radio will benefit there.”