Out-Of-Home Advertising Market Suffers Downtrend Due To The COVID-19 Pandemic
In the wake of the coronavirus (COVID-19) pandemic sweeping the world, several markets are being adversely affected due to the repercussions on the operating profits of the companies. Out-Of-Home (OOH) advertising is one such market anticipated to witness a decline in growth over the future years. Amongst the other markets, media and advertising are likely to foresee tremendous disruption in the attainable revenues over the coming period. While digital advertising platforms have predominantly attained opportunities for engaging consumers simply because of the apparent correlation between the time at home and media consumption, the traditional Out-Of-Home (OOH) advertising market is predicted to decline over the future years. With the fact that public transport modes act as an ideal environment for the spread of a deadly disease like this, the OOH advertising market is conceivably witnessing lower reach, especially at the transport locations as target customers are mostly staying indoors and avoiding crowded places as much as possible.
The anticipatory lockdowns by the governments worldwide to commute the spread of the virus is going to hinder the growth of the OOH advertising market. As the coronavirus continues to take a toll considering the fact that the global population is self-quarantined or in-home isolation for the coming months, this is expected to have a negative impact on the marketers’ willingness to advertise their products via OOH mediums. According to a recent publication by the World Federation of Advertisers (WFA) in view of this pandemic, the local and regional marketers in China are tightening their marketing plans.
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Consumers in countries with substantial reported coronavirus cases are vigorously turning down large gatherings. Thus, advertisers are not willing to promote their product offerings via OOH mediums. With similar situations escalating worldwide, advertisers are reviewing their advertisement strategies majorly focusing on short term pronouncements. The companies are planning to tighten their Advertising Expenditure (AdEx) towards the 2nd half of 2020. Furthermore, the unanticipated eruption of the pandemic has affected the cost of production and has already started impacting the budget commitments and business decisions of large market players across industries globally. The market uncertainty and debilitating economic conditions due to this pandemic have complicated the estimations and future spending for OOH advertisers.
The COVID-19 outbreak has led to a decline in the quarterly GDP growth of noticeable countries worldwide. Owing to the national or regional lockdown imposed by some countries for extended periods and major sporting events such as UEFA Euro 2020, Olympic, and Paralympic Games being postponed, the out of home advertising industry is expected to witness market recession in the coming times. The downturn in the advertising domain will hit major OOH mediums including billboard advertisements at airports, railway & metro stations, and the busiest markets in cities. Transit advertising on buses, taxis, and subways will reduce to give way to spending the allocated amount on advertising on products that are more frequently delivered at doorsteps.
Additionally, an increase in self-isolation has led to an abrupt rise in the consumption of online mediums wherein the demand for Video-on-Demand (VOD) and other online video services have notably increased among target audiences. Also, television consumption has witnessed an increase of 50.0% above the daily average, pointing at the growth potential for digital advertising in the current times. Furthermore, social media advertising investments may escalate more than the organic rates due to its increasing usage for connecting with family and friends in such an unfavorable global condition. Furthermore, in-game advertisements are anticipated to gain prominent traction from a relatively low consumer base. However, it is not subjected that a shift in the consumers’ way of living will directly translate alterations in the marketing strategy. The potential ramifications of the virus spread may result in decreased consumer spending, and thus the advertisers of prominent brands may delay their existing strategy, favoring performance-based marketing campaigns.