Pivotal Research Group is heralding “increasing signs up improvement, with an uptick in advertiser confidence,” in its second-quarter media report, released Friday, June 5. “We think that April increasingly feels like the bottom, and the linearity of the quarter appears to be much better in May, with expectations for a continued rebound into June,” writes Michael Levine, Senior Research Analyst, Internet & Media.
Pivotal’s 2020 estimates, in tandem with The Street, are “largely in the range of where companies indicated they were pacing for the quarter in April/early May,” the report says, with expectations that there is likely an upside of revenue numbers in the range of at least +4-7%.
“Marketers continue to watch some of the same things investors and consumers have been tracking: COVID-19 case growth and the pace of reopening,” Levine writes. “They largely appear to be tracking the pace of broader economic reopening.” He stresses, “The world seemingly stopped in mid-March/early April, but following this, a tale of two different marketing cohorts emerged different dynamics – brand marketing and direct response marketing.”
Direct-response marketing has been surprisingly resilient, he surmises. A combination of lower media pricing, offline stores being shuttered and a captive consumer with more idle time on their hands “was a perfect storm. We heard through late April/early May from some native-DTC e-commerce brands about successive daily record levels of spending combined with incredibly robust conversion rates.”
Levine adds, “We think that the pricing tailwind for DR brands has weakened, and are hearing vignettes about pricing down 10% from pre-COVID-19 levels, but we have been surprised to hear about heightened levels of spend. As more of the states begin to re-open over the course of June, it will be fascinating to see how the DR channel responds.”