15.06.2020

Coronavirus still has a stranglehold on the advertising market


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Highlights in May

Following the coronavirus low in April, the Swiss advertising market recovered only slightly during the month of May, with an increase of around 10 percent compared to the previous month. At 347.4 million Swiss francs, gross advertising expenditure fell by around a third compared to the same month last year. Gross advertising expenditure therefore finished below the previous year’s level for the fourth consecutive month. YTD, the decline in cumulative advertising expenditure after five months is around 20 percent.

Advertising Pressure in the market as a whole

Development of Advertising Pressure as per May 2020 in million francs (gross)

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The outdoor advertising drought continues

Advertising expenditure increased in every media group except cinema in May, compared to April. Nevertheless, it remained below the previous year’s level in all media groups. Swiss cinemas, which reopened in early June, suffered another month without any advertising revenue. Out-of-home advertising is also seen to be particularly badly affected by the coronavirus crisis. The lockdown easing that took effect on 11 May has only had a limited impact on this. While paid visibility in out-of-home advertising increased by around 10 million Swiss francs (gross) in May compared to April – at 32.1 million, this value was still more than 50 percent below the previous year’s level. Advertisers’ lingering scepticism towards outdoor advertising is understandable: after all, the everyday working lives and entertainment habits of the average Swiss citizen continue to be affected by the coronavirus. It will be interesting to see how the situation develops in the wake of the lockdown easing measures as part of the Swiss exit strategy. In all three traditional media (print, TV and radio), gross advertising expenditure recorded a similar drop of around a third compared to the same month last year. Internet advertising seems be the least affected by the current situation – with a reduction of 25 percent. However, gross online advertising expenditure was also well below the previous year’s value.

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Laundry and washing up do not happen of their own accord, even during the coronavirus crisis

As in April, only one sector increased its gross advertising expenditure compared to the previous year: in May, it was the cleaning industry (+75.4%), led by advertising giants Procter & Gamble, Reckitt Benckiser and Henkel & Cie. People are at home more and therefore spending more time doing housework. This appears to have been the assumption of advertisers in the cleaning sector in May. Various dishwasher tablets and detergents, in particular, were heavily advertised. As a result, the cleaning industry was also one of the three sectors that recorded a YTD increase, compared to 2019.

If there are no events, none can be advertised

The ongoing restrictions on (large) events resulted in the sharpest decline (-87.3%) in advertising in all sectors in May, compared to the previous year. Public transport companies, which are desperately longing for absent commuters to return, also recorded a significant drop in gross advertising expenditure, with a fall of 75.6 percent, compared to the same month last year. The tobacco industry, which performed well in April despite the crisis, saw the third largest fall in advertising expenditure of all sectors, compared to May 2019 (-70.8%).

Outlook

The far-reaching easing measures of the lockdown regime as part of the Swiss exit strategy were almost imperceptible in the advertising month of May. YTD advertising expenditure was still significantly below the previous year’s value across all media. This is hardly surprising, as major easing only came into effect on 11 May and 6 June. Normal life seems to be slowly returning, however, apart from the ban on large events and the working from home arrangements that persist in many areas. It remains to be seen how long and in what form the consequences of COVID-19 will be felt in the Swiss advertising market.


Advertising pressure in the sectors

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Top of the month

The top advertisers and most widely advertised products and services (excluding range and image advertising) in May:

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Media Mix

Media Mix for the month of May

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