COVID-19: What happens to sales and saliency if I reduce my media spend?

Kantar insights on the effect of reducing or cutting media budgets in this challenging time.
24 March 2020
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Jane Ostler
Jane
Ostler

Global Head of Media, Insights Division

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Should I maintain, decrease or stop my investment?

It depends on the category, and what product or service you are promoting. Categories like CPG, technology and entertainment are continuing to advertise, while the travel sector has of course cut back. As to investment level, it depends on the channel: we are seeing decreases or cancellations on client media plans for cinema, OOH and sports sponsorships in many markets, and a revision of how TV, radio, audio, online and social are being deployed. However, it’s vital that all brands consider how they continue to build longer term preference, so they are prepared as the situation recovers. Brands that hold their nerve while competitors reduce spend are likely to benefit strongly.

What do Kantar’s media pressure simulation scenarios show us about how share of voice impacts sales and saliency?

Using analytics and time-series data to simulate three different spend scenarios (stay the same; decrease by 50%; go dark) for a real beer brand, we can see that if it were to go totally dark it could lose about 13% of existing volume sales – market share that would be very hard to recover in the future.

Our brand guidance data has previously shown that brands can ‘go dark’ on TV without deleterious effect, but only for a few months. Even during this period saliency is very quickly impacted, of particular concern in repertoire categories. In this real case, advertising saliency would drop dramatically to never seen before levels if the brand were to cut all spending. Retaining 50% of spend significantly limits losses.

Brands need to adopt the right strategy, balancing short-term need and long-term recovery

Many brands will focus more on longer-term brand-building, and less on sales activation. Some brands are using their media for more purpose-led advertising in this period, like Nike who are using ads to emphasise the importance of social distancing. New types of sponsorship are emerging to enable brands to maintain share of voice – e.g. sponsorship of virtual events, paying for the bringing down of paywalls or to reduce subscription costs for streaming services, or even by funding specific content (‘brought to you by’).

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