The advertising market trend for March 2020 shows the first effects of the coronavirus crisis on the Swiss advertising market. While gross advertising pressure normally shoots up in the third month of the year, in 2020 it was only slightly higher than in January with 455.5 million.
The gap between March and the previous year amounts to a shortfall of CHF 90 million, a drop of -16.4 percent. This means that the figure for the first quarter of 2020 is 114 million below that of the previous year. This represents a decrease of -8.2 percent.
Development of Advertising Pressure as per March 2020 in million francs (gross)
Cinema advertising saw the greatest percentage fall in March (-77%), followed by radio advertising (-49%). Print declined by around 20 percent, with daily, regional weekly and Sunday papers and the trade press most affected. The consumer, financial and business press, however, remained at the same level as last year. Internet (-17%) and TV advertising also recorded noticeable losses (-15%). Only out-of-home advertising expenditure in March remains for the time being at the same level as last year overall (-0.7%). The media group had an extremely strong start to the new year and can currently absorb the losses from calendar week 12 onwards, which are around 10 percent. It will be interesting to see when and how strongly the effects will be felt.
With the declaration of an “extraordinary situation” in Switzerland on the 16 March 2020, the largest slump in advertising expenditure across all media groups was felt in calendar week 12. However, there are differences between the individual media.
While cinema advertising fell as expected to zero after the closures from week 12, the decline among other media groups was already less severe in the following week. After the initial shock-induced paralysis, it has become clear that a disruption, which the current exceptional situation undeniably is for the advertising industry, clearly creates winners and losers.
A look at the industry developments shows that the average Swiss consumer was encouraged in March to do two things above all – clean and smoke.
Cleaning experienced the highest boost in March with an increase of 33.2 percent, followed by the tobacco sector with a hike of 24.2 percent. Both sectors had been clearly in the red in February compared with the previous year.
Through the BAG’s coronavirus campaign – the “product” with the highest advertising expenditure in March 2020 – the initiatives and campaigns sector also experienced a clear increase in advertising expenditure (+5.7%) and the finance sector showed slight growth too (+1.9%). If you consider the annual development so far, however, this should be interpreted as stagnation. The sector had started both January and February with a good 20 percent more advertising expenditure than in 2019.
The fact that campaigns were halted at short notice from the 12th calendar week can so far only be seen among a few advertisers.
An example of this from the vehicles sector, which has had to contend with the highest absolute decrease year-on-year – not least because of the cancellation of the Geneva Motor Show – is VW. Yet the VW Golf 8 holds silver medal position in the top 10 products in March. However, if we look at the advertising more closely, we can see that the advertising campaign on TV, OOH and in cinema was only short-lived and came to an abrupt end in week 12. Only online advertising continues to run as usual. Whether this was planned or not is certainly a question which may be asked.
The sector which fell by the most number of places in March compared with the course of the year so far is leisure, gastronomy, tourism. A clear leader in first place in January and February, it has now fallen to 10th place. Advertising expenditure has consistently fallen by a third since January. It still has the highest advertising expenditure year-to-date, but the decrease comes in at -12.7 percent compared with last year. March 2020 is around 40 percent below last year’s level.
The crisis offers good short, medium and long-term positioning opportunities to those who show agile communication, be it by adapting the advertised product range (bicycles: +41%), highlighting services such as online shops (SportXX, from 23 March 2020), or engaging with image-building (partnership codes of conduct: Coop/Migros/Denner).
It is important not to forget simple logic. If competitors reduce their activities, then with unchanged advertising expenditure, one’s own “advertising voice” gains greater weight on the market (SOV%).
It will not be down to a lack of time and attention which the Swiss population is devoting to the media, in these times of working from home and lockdown.
The top advertisers and most widely advertised products and services (excluding range and image advertising) in March: