TV and the press will be the media that suffer most from the economic crisis caused by the pandemic. Media groups are asking the Government for support, but so far in vain.
Since major digital platforms such as Facebook and Google entered the advertising market, investment in traditional media (television, radio and press) has gone into decline and, consequently, the intermediary role of media agencies has become weakened. Now, with the economic and financial impacts already felt in March due to the Covid-19 pandemic, the fall in advertising will be at least between 40% and 50%, especially in television and the press, according to specialists and sector leaders heard by JE.
“This crisis accentuates a situation that was already difficult, because there is a huge restriction on consumption,” says the former president of the Havas group, Ricardo Monteiro.
“I fully accept that in the months of deep quarantine, such as the one we are experiencing, there will be a fall in advertising investment, especially in offline media and print, not far from 40% to 50%,” the specialist estimates. Ricardo Monteiro admits that the calculated fall may be greater in the next two or three months, “depending on how long the crisis lasts”.
To illustrate the calculation, Ricardo Monteiro indicates that “all companies” that invest in advertising in the automotive, insurance, real estate, electronic equipment such as mobile phones, and durable consumer goods categories “have already given orders to cancel the campaigns they had under way”. But, for example, food retailers still maintain “high advertising pressure, insofar as they remain active and continue to provide services”. However, they “are not enough to prevent a fall” in advertising investment.
The former president of the Havas group explains that the fall exists because “there is a huge restriction on consumption”, taking into account that, at the current moment the country is going through, the quarantine adopted by the population has taken consumers off the streets and “investment in television and traditional media will be suspended”.
Pedro Baltazar, president of the media agency Nova Expressão, has a similar opinion. “We are talking, at the very least, about falls of 40% to 50% in March, and the outlook for April and May is perhaps even worse, in terms of media agencies and media investment,” the manager tells JE. And he recalls that, in January and February, the market recorded “very reasonable” growth and was “relatively optimistic” for 2020. But the month of March, he says, “is being violent”.
By contrast, the also founder of Nova Expressão says that, with consumers at home, traditional media audiences “have changed behaviour”. “Generalist television channels have their audience peak in news, and cable channels have soared, both entertainment and the more news-focused ones, and there is overwhelming consumption in digital,” he details. Will this be a sign of a future recovery in investment? “In addition to this change in consumption, there will be another, which is the recovery itself. It is a very big unknown,” he says.
Alberto Rui Pereira, CEO of IPG Mediabrands Portugal, also tells JE that the evolution of advertising investment until the end of the year “is still an unknown”. It depends on the “real impact” of the crisis. How will that impact be felt? “The situation will require some adaptations from brands, because there are goods and services that may no longer make sense to communicate as usual,” he replies.
The three specialists agree with Government intervention in the media industry, due to the loss of advertising revenue that feeds the industry. The Private Media Platform, which includes the Cofina, Media Capital and Impresa groups, has already asked the Government for help in the current context. To offset the fall in advertising investment, it proposed the “strong acquisition, by the State, of advertising space, at rate-card prices, in print, digital, radio and television for the mass dissemination of all ongoing campaigns”. However, the appeal has not, to date, received a favourable response.
