COVID-19: RECOMMENDATIONS FOR ADVERTISERS

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In these unprecedented times, it is especially important that advertisers do not panic. It is important to remain calm to make good decisions and it may take courage, wisdom, and leadership to know how to take advantage of the moment. One of the first opportunities is the clear increase in TV coverage and consumption. TV coverage increased 60% in China, while in Italy TV audiences have risen almost 30%!

The increase in TV consumption also offers the opportunity to reach targets, which in the past were exceedingly difficult to reach through this medium. In Italy there has been a 44% increase in target 15-34. In Germany TV coverage rose between 15-20% and in France, audiences have risen 28%, it is the trend in the most affected countries.

Studies suggest that, during crises, even in sectors that will experience a recession, the brands that invest are the ones that actually gain market share, at the moment when everything returns to normal. A study by GFK and Serviceplan in Germany during the 2010 financial crisis observed 959 brands over 9 years. The conclusion of the study was: “Significant increases in market share, as well as significant decreases, are achieved not in growth phases, but rather in times of crisis, which usually do not last more than 10 to 12 months.” This Study also affirms that it is impossible for brands that decrease their investment in times of crisis, to be easily recovered when everything returns to normal.

THE GUIDELINES IN THE MEDIA

The media, regarded as essential services at this time of crisis, continue to operate, however, differently from normal. Adapting to these changes is vital to ensure communication between company and consumer.

TV

With the temporary change in audience behavior, clients must adapt both the number of spots on the agenda and the choice of programs. You must be careful not to generate overexposure and take the opportunity to reach targets who, being at home all day, find themselves watching TV in strips with cheaper costs than usual.

OTHER MEDIA

Some media are being directly affected by the crisis, as is the case of OOH, since by reducing outdoor traffic (pedestrian and vehicular) advertisers and agencies are forced not to include them in the strategies. Market behavior will help us indicate which medium suffer from investment losses. However, we must also be vigilant as it is possible that the fall in investment in certain medium will generate long-term trading opportunities.

SERVICES AND CONTRACTS WITH AGENCIES

The crisis affects all companies and media agencies are no exception. However, it is necessary to ensure that the centrals are aligned with the client’s needs and comply with the contracts without being affected and, if in the case of impacts, that they are compensated.

From Media Auditors we want to offer advertisers some recommendations on how to manage the relationship with their agency during the crisis, as well as paying special attention to certain aspects:

  • Increase communication or dialogue with the agency by sharing the clients’ information and needs.
  • Request greater flexibility and agility in the response to the agency.
  • Demand more creativity from the team by exploring new avenues and/or possibilities in the different media.
  • Ensure that the implementation of at-home-work does not affect agreed FTEs.  In addition to adapting and optimizing the media strategy to the current crisis, anticipate and prepare for developments at the time of recovery.
  • Consider renegotiation with suppliers considering that we are in a new scenario.
  • In the case of considerable variations in investment, adjust the size of the team and therefore the remuneration.
  • Similarly, if the investment variation applies to distribution by mediums, consider how it affects the different optimizations or benefits by mediums obtained by the agency, and therefore the client.
  • Modify the objectives or commitments acquired in the contract with the agency, if required by strategic changes.
BONUSES

One of the most important points in the negotiations of clients in Mexico, are the bonuses that are obtained with each medium. This is particularly important with Open TV providers, where they can account for up to 26%. Even before the outbreak of the virus, in previous years, from Media Auditors we saw cases in which customers did not get 100% of their bonuses through the management of their headquarters.

With the current situation, it is very likely that clients who have already closed deals will find themselves in a position not to reach their negotiated objectives, from special positions, to the use of bonus amounts, so it is important to always track and make comparisons of what we got and what we should get. From Media Auditors we collaborate with many clients in Mexico to audit these compliances that can be up to 12% loss of profits, so now more than ever we recommend advertisers to perform this type of audit.

NEGOTIATIONS WITH TELEVISIONS

Negotiations with televisions this year 2020 have been delayed compared to other years. Many of the advertisers have already closed the negotiations and given the situation that is being lived, we must not lose sight of some aspects.

There are contractual commitments and the fact that there are movements in the planning of guidelines with televisions, changes in programming, even cancellation of sports events, increases the possibility of a lack of compliance in investment commitments. This can lead to a possible Carry Over by 2021, a fact that may affect next year’s negotiation.

Another point to the situation is that advertisers may be affected by payment commitments to television stations, so from Media Auditors we recommend that you make a renegotiation plan with these stations and adjust payment dates if necessary.

In the face of the movement of guidelines on televisions, there is the possibility of non-compliance with the 2020 investment.

Not consuming the investment, possible Carry Over by 2021

Monitor compliance of bonuses and goodies

Planning to negotiate payments with televisions.

MEXICAN PESO FALL

The price of the Dollar is at a time of very strong instability, the fall Mexican currency can affect the planning of some advertisers, so our main recommendation is to ask the agencies for a detailed action plan where you see in what media and with which suppliers the “Dollar” situation is a problem, in suppliers where it is inevitable that this fluctuation will affects, immediate renegotiation measures should be taken, not waiting until it’s too late so you can take advantage.

What advantages can we take as advertisers? We cannot control the decline of the currency, but we can control our response to the situation. We must anticipate and ask suppliers/media that this difference that will directly affect the guideline is compensated in some way. Let us remember that direct communication with the Agency is vital at this time and to ensure that the agency’s response is the most beneficial for you advertisers.

Crédito de Imagen: “Designed by Freepik”

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