Travel Industry Starts to React to Coronavirus
The travel industry, including cruises, airlines, and hotels, has rapidly and sharply reduced advertising spending—by up to 60% on TV and 51% on digital—starting mid-February 2020 in response to the COVID-19 outbreak, with many firms halting spend entirely to conserve cash and reassess strategies amid the crisis.
While almost every industry will most likely feel the effects of the fast-spreading COVID-19, the travel industry is one of the first to be impacted. It is the tip of the spear. MediaRadar wanted to share some insights on what’s already happened.
Big picture: We are impressed by the speed that travel firms are acting. They are conserving cash and dramatically reducing spending. Many brand-name firms have stopped their spend altogether while they assess and develop their plans.
Broadcasters and publishers courting hotel, cruise, and airline advertisers will need to think about what comes next. They’ll need to rebuild public confidence in the aftermath of COVID-19 – and help support these industries fight through this difficult time.
Here are answers to questions many have when thinking about the impact of COVID-19 on the travel industry.
Q: Do we see a deceleration in advertising spend in the travel industry? And if yes, when?
A: Like a car hitting the brakes in advance of an oncoming accident, the deceleration in ad spend within the travel industry has been swift. Looking at both year-over-year, as well as week-over-week, the shift started in mid-February. Key findings:
- Digital and TV spend was reduced sharply. A comparison of the first week of March vs. February shows a contraction of 33%. The first week of March vs. January is down 30%.
- TV and Digital spend has contracted by 60% and 51%, respectively. Magazine spend is booked farther in advance and has shown no contraction yet. In fact, there was an increase in spend for March issues.
Q: Was there a decrease in travel ad spend across cruises, airlines, and hotels?
A: Cruise lines began making sustained cuts to their advertising spend in mid-February 2020, possibly in response to the Princess-Cruise quarantine in Japan. Spend has been cut even more drastically, especially among digital channels, since the beginning of March. Airlines also began noticeably shifting ad spend in mid-February, especially when looking at year-over-year comparisons. Meanwhile, hotels have only recently changed their ad buying behavior, although it’s dramatic.
Q: How does ad creative shift over time, if at all? Are travel companies changing their messaging?
A: There is virtually no change in ad creative. Hotels, airlines, and cruise lines are continuing to promote destinations and sales. Even Princess Cruises was still promoting its vacations as of last week. In spot-checking the top 5 companies from each category (cruises, airlines, and hotels) we found only a single example of a company (Delta Airlines) acknowledging the virus with a campaign running on “Business Travel News”. However, Delta was still running regular creative across consumer sites.
Big picture: Last week was astonishing for its speed of change. We expect most travel firms will adjust creative in the coming 1-2 weeks.
Q: How did the week of Saturday, March 7 to March 14 look for all three categories (cruises, airlines, and hotels), week over week? Is there any shift in spend at all?
A: All three categories made week-over-week cuts to their ad spend when comparing the week of March 8 to the previous week of March 1, 2020.
Related
Momentary B2B Ad Spikes Return to Normal
Following an initial surge in digital advertising spending by B2B verticals such as home furnishing, IT, and business education programs in response to the early COVID-19 pandemic disruptions, these sectors have now largely reverted to their pre-pandemic investment levels as the market stabilizes.
12 Ads ‘til New Year: 12 New Advertisers in 2020
In 2020, amid the COVID-19 pandemic's drastic shifts in consumer behavior, 411,000 brands spent $81.27 billion on advertising across media, with 5,500 new brands—particularly from direct-to-consumer companies, subscription boxes, and OTT services—emerging prominently to meet the demands of quarantined and socially distanced audiences, as highlighted in a year-end series spotlighting twelve notable new advertisers.
Top 5 Beauty Brands: Mele, Secret, Dior & more
In early 2021, top beauty brands like Tresemme Pro Collection, Mele Skincare, Secret, Hotheads Hair Extensions, and Dior J’adore Infinissime significantly increased their advertising spend—ranging from a 51% to a 922% week-over-week lift—across various media including print, television, and digital platforms in major U.S. markets.
2023 MediaRadar Prediction: Food Advertisers Battle Inflation
In 2022, despite a 12% rise in grocery prices and a 49% surge in egg costs due to inflation, food advertisers spent a flat $5.7 billion overall—mostly on snacks and desserts—with a notable 29% ad spend increase in Q4 and a 10% year-over-year rise in January 2023 as inflation eased, signaling a strategic push to engage consumers amid economic challenges.
Car Buying Apps Are Changing the Auto Industry—But How Are They Advertising?
Car buying apps, which have surged in popularity especially among millennials who increasingly complete purchases online, are disrupting the traditional $840 billion used car market by purchasing inventory directly and offering a lower-pressure, digital-first buying experience, while collectively spending $255.3 million on digital and TV advertising in 2021 to compete with established car manufacturers and dealerships.
How is Programmatic Performing on YouTube?
In 2020, YouTube experienced a dip in ad revenue in Q2 but saw year-over-year growth driven by direct response ads, prompting the platform to shorten the minimum video length for mid-roll ads from ten to eight minutes in July to boost monetization opportunities for creators amid pandemic-related advertising challenges.