It is not new news that the crisis caused by the coronavirus pandemic has shaken markets globally, and the advertising media industry has been no exception. But, although many countries are already in de-escalation processes, the impact that the pandemic has had in the way of investing the media budget has taken a turn for clients in the Mexican market.
After compiling and analyzing the investment data of our 28 advertisers in Mexico, we have reached a result that is truly surprising, despite being a global issue, which is constantly talked about in the sector, we never thought that the real data would be so high. In the first semester of 2020 investments fall by 32% compared to the first semester of 2019.
If we go one more level down, we see that it was precisely the second quarter of 2020 that felt the greatest reduction impact. Historically, the average investments of advertisers in the Media Auditors pool, between the first and second quarter have increased by around 20%. For example, in 2019 the increase between Q1 and Q2 was + 26%. This uptrend looks like something of the past.
IMPACT PER MEDIA
This exceptional fall at the market level occurs in all media, with radio and cinema being the most penalized at a percentage level between both years. The print media that was already in a natural fall in investment, has received a greater impact (press -73%, magazines -34%) since during the crisis they consumed even less than before, which has made them easily discarded from the budget of most advertisers. Something similar occurs with the Radio medium (-51%), which is consumed mainly during the commute to work; during confinement it has been drastically reduced, which has radically affected the medium. This same concept applies to Out Of Home (-27%) as there were fewer people on the street, the medium became ineffective for several months.
Television (-29% in open and -34% in pay) has suffered a general fall, on one hand because a large number of advertisers delayed their negotiations with television stations, and on the other hand, there has been a notable reduction in budgets. Advertisers have retained their guidelines throughout March, April, and May, releasing them until the end of 2Q.
The online medium has been with no surprise, the least percentage penalized (-18%). This can be attributed to the fact that despite having suffered a budget reduction, advertisers kept their advertising in this medium, since it has a massive reach and has been highly used by consumers during the pandemic. Online has been the medium advertisers focused on when optimizing investments.
MODERATE REACTIVATION OF THE ADVERTISING ACTIVITY
However, we believe that there is light at the end of the tunnel. If we zoom in on investments in April, May and June, it is clear that April is, without surprise, the most penalized month, with declining investments in almost all media, which increase in May and June. We can mostly see it on Open Television, where the average advertiser has an investment of $ 7.5MM in pesos, which then doubles for May, reaching almost $ 15MM and then $ 18MM in June.
Another medium that has slowly benefited in these three months has been Online, which grew 41% between April and May and then 12% between May and June. It’s expected that these 2 mediums together with Pay TV will be the ones that recover the most as the year progresses, being direct consumption media especially in a state of confinement.
From Media Auditors we have a more panoramic vision of how the Mexican market really invests through first-source data: our own clients, who represent approximately 34% of the investments in the entire country. This allows us to see real trends in terms of investment by each medium and to transmit our inputs to them. Our information can be decisive in decision-making, especially in times like those we are currently experiencing.
Although 2020 has started with captive investments, it is inevitable that the trend will reverse sooner or later. We recommend, as far as possible for each advertiser, gradually resume investment in media in the coming months. Taking into account that there may be budget limitations, if optimization is sought, the best option would be to focus on multi-screen formats (open, and pay television and online) since they are the most consumed sources of advertising in these times of pandemic.
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