SMI: March Economic Market Update – COVID-19 Impact Starts to Bite

The biggest loss was the cancellation of the entire 68team NCAA Men39s Basketball Tournament This marks the first time in an 81year history of quotMarch Madnessquot there was no tourney The games had been scheduled to start on March 16th and air across three Turner networks and CBS 64 of the 67 games were set to air in March Our data shows that in 2019 the NCAA Men39s Tournament for the 64 games airing in March had generated nearly 460 million in ad revenueMoreover virtually every other televised sporting event suspended play these included such toprated sports as the NBA on March 11 the NHL on March 12 and NASCAR which televised its last race on March 8 It is not known when these sports will resume anytime soon In lieu of live sports the networks televised replays of quotclassicquot sporting events and other sports related programming Many viewers however turned to subscription based streaming video for entertainment led by The Tiger King on NetflixSMI39s Cross Platform analysis points out the impact that live sports preemptions had on ad revenue In March no two media companies were hit harder than ViacomCBS and WarnerMedia which televise the annual men39s college tournament In March 2019 ViacomCBS had led all media companies with a 13 share of ad revenue one year later that share dropped to 9 ViacomCBS reported a yearoveryear ad revenue loss of 373 for the month by far and away more than any other media company WarnerMedia had their March revenue drop by 173Although many scripted and unscripted programs were not yet impacted by the pandemic every leading media company with the exception of Fox 02 reported a decline in ad revenue when March 2020 is compared to March 2019 Interestingly after ViacomCBS and WarnerMedia the two media companies with the largest dropoff were Facebook 113 and Google 74 Comcast reported a yeartoyear decline of 68 Disney dropped by 61 and Discovery ad revenue was down by 12Although Facebook or Google do not rely on sports for ad revenue with early concerns of COVID19 it is easier and quicker to pull ads from digital media than traditional media Also many smaller and medium sized businesses rely more on digital media and with many shut down with the quarantine they immediately pulled their online ad commitments Despite the decline Google garnered the highest share of ad revenue in March at 11 Disney was next at 10 followed by Comcast and ViacomCBS at 9In looking at ad spending for twelve prominent product categories in March 2020 we found only two pharmaceuticals 18 and consumer packaged goods 16 with an increase in yearoveryear ad dollars Both categories support consumers with athome supplies and health remedies Conversely with many people under quarantine edicts travel reported the sharpest yearoveryear decline in ad dollars at 51 Ad spending with retail was next with many states mandating store closings the product category reported an ad spending decrease of 21FIRST QUARTER 2020With all of first quarter 2020 the COVID19 pandemic had less of an impact on ad spending Many of the toprated programs and specials were televised including the NFL postseason culminating The Super Bowl LIV Also many popular live event specials such as The Oscars Grammy39s and Golden Globes were televised which charge premium ad ratesAmong media companies SMI reported Disney was once again at the top accounting for 11 of all ad revenue Following Disney was Google at 10 both ViacomCBS and Comcast garnered 9 of total ad spending Fox which benefited from airing Super Bowl LIV had a strong quarter with 7 of all ad spending Facebook was next with 5 of all ad spending followed by WarnerMedia and Discovery both at 4In first quarter 2020 57 of all ad dollars were allocated to traditional media and 43 was spent on digital media a breakout similar to previous quarters Although with COVID19 impacting only the last few weeks of the quarter many big media companies reported a decline in ad revenue when compared to first quarter 2019 With a decline of 29 ViacomCBS had the sharpest loss the media company had televised the Super Bowl LIII in 2019 and the 2020 quotMarch Madnessquot was cancelled Next year the Super Bowl and NCAA Men39s Basketball Tournament will return to CBS expect ad revenue to rebound Yearoveryear WarnerMedia reported a 10 loss in ad dollars the second highestThe remaining major media companies that reported a yeartoyear decline were AampampE Networks 8 Microsoft 6 iHeartMedia 5 Disney and Google 3 each and Comcast 2 Conversely Fox reported a yearoveryear increase of 54 in ad dollars by far the most of any media company Other companies that reported an increase in ad revenue were Twitter 8 Facebook 6 and Discovery 2Looking at publishing type video continues to get the highest share of any channel for major marketers with both traditional and digital media With its combination of traditional and digital media Disney had the highest market share of video ad dollars for the quarter at 18 ViacomCBS despite the absence of marquis sporting events still managed a 16 share of the video ad spend market equaling Comcast Fox which televised the Super Bowl had a share of 11 followed by WarnerMedia and Discovery both at 7 with Google at 3Audio ad dollars reported a mixture of terrestrial streaming and satellite companies that continue to dominate the medium Once again iHeartMedia had the largest share of revenue at 31 followed by Sirius 18 and Cumulus 9 Entercom and Spotify followed both with an ad revenue share of 8 In first quarter 2020 ad revenue for text was also fragmented led by Verizon with an 11 share followed by Amazon at 9 Meredith at 8 and Advance at 5We are in the early stages on COVID19 but we have already seen its impact on the advertising marketplace With an absence of live sports and soon original entertainment content in the months ahead we can expect sharp declines in ad spending across most media outlets and product categories Unfortunately March is only the tip of the iceberg In the months ahead SMI will continue to monitor and report the impact COVID19 will have on the ad and media industriesClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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SMI: March Economic Market Update – COVID-19 Impact Starts to Bite

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James Fennessy

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SMI: March Economic Market Update – COVID-19 Impact Starts to Bite

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