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1: A deep recession is now 3: The food and drink sectors 6: FMCG sales on Tmall and
highly probable in the short- reduced spend at a far softer Amazon have boomed. The
term; this is likely to lead to an rate than the wider market in upshot of this is that online
advertising recession in the first 2008/09 – they are also less players may become more
half of 2020. exposed to today’s downturn significant as gatekeepers to
than sectors such as travel, FMCG shoppers. This may
2: During the last recession, ad tourism and entertainment. increase the importance of DTC
money moved into paid search, or subscription offers.
though Google is not immune to 4: Major FMCG advertisers
a downturn. Other online pure lowered ad investment in 7: Consumers are now adjusting
players such as Facebook, 2008/09, but it held as a share to ‘living a new normal’, and
Twitter and Baidu are vulnerable; of sales revenue. crisis-buying habits may prompt
digital channels are the easiest permanent shifts in behaviour.
to switch off. 5: FMCG ad money is moving
online, but brand building is still
important while selling via third-
party retailers and not directly to
customers.
WARC DATA
Aug-19
Aug-18
Jun-18
Sep-18
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May-19
afloat. But the pandemic is
not like a normal recession –
PMI data show a far steeper
fall in services activity than
Note: A value above 50 indicates growth, a value below 50 indicates decline. Larger/smaller values signal severity. March data are flash results.
would usually be expected.
SOURCE: IHS Market Purchasing Manager’s Index
SOURCE: OECD
60
Growth
Dec-18
Dec-15
Dec-16
Dec-17
Dec-19
Jun-15
Feb-16
Jun-16
Jun-17
Jun-18
Jun-19
Feb-15
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Apr-17
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be down by as much as 18%.
Facebook and Google are
exposed – digital channels are
the easiest to switch off.
Note: A value above 50 indicates growth, a value below 50 indicates decline. Larger/smaller values signal severity.
SOURCE: WARC Data Global Marketing Index
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0
TV was the only medium to 2002 2003 2004 2005 2006 2007 2008 2009 2010
record a dip in top line FMCG
spend, while outdoor (+£12m)
Advertising investment,
and press (+£9m) investment
Year-on-year % change, Household Cosmetics &
rose most in absolute terms. 2008/09
Food Drink
FMCG personal care
Total FMCG Total market
Though not wholly recession TV -9.4% -19.1% -16.7% -11.0% -12.1% -9.8%
proof, the food and drink Press 12.3% -7.3% 13.9% -8.6% 1.7% -17.0%
sectors reduced adspend at a Radio 32.7% 27.4% -33.3% -10.2% 14.0% -9.8%
far lower rate than the wider Cinema 19.9% 24.7% 210.6% -8.2% 17.1% 4.9%
industry. Associated brands Outdoor 7.4% 27.5% -30.8% -22.6% 8.1% -16.9%
may prove important to media Online display 52.9% 38.6% -19.8% 24.0% 27.4% 5.7%
owners given the nature of the Total -1.3% -2.3% -12.3% -10.5% -5.6% -11.7%
current downturn. See more.
Note: Chart percentages denote media share. Press is print newspapers and magazines. Press excludes classified advertising.
SOURCE: Nielsen Ad Intel, AA/WARC Advertising Statistics Yearbook/Expenditure Report
© Copyright WARC 2020. All rights reserved.
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WARC DATA
Food Soft drinks Household & domestic Toiletries & Cosmetics All sectors
This is true across all 19
product sectors monitored
by WARC, though some 60%
FMCG sub-categories have
been slower to shift budget
than others, in part because 50%
they are not selling directly
through digital channels.
40%
Total Online
earners are also significantly Gen Y 20% 11% 30% 26% 13%
more likely to than lower
earners (48% versus 15%). Gen X 29% 15% 31% 12% 13%
Note: n = 2,310 (US) and 2,229 (UK) internet users aged 16–64. Low income is <$32k, high income is >$85,000. Includes grocery shopping.
SOURCE: GlobalWebIndex
700 Alcohol
Beauty
500
Beverages
Kid's clothing
300 Oral (mouthwash & mouth spray)
OTC medicine
200
Pet supplies
Skincare
100
Snacks & confectionery
0 Women's clothing
2018-06-01
2018-01-01
2018-02-01
2018-03-01
2018-04-01
2018-05-01
2018-07-01
2018-08-01
2018-09-01
2018-10-01
2018-11-01
2018-12-01
2019-01-01
2019-02-01
2019-03-01
2019-04-01
2019-05-01
2019-06-01
2019-07-01
2019-08-01
2019-09-01
2019-10-01
2019-11-01
2019-12-01
2020-01-01
2020-02-01
Note: Indexed sales value (renminbi) versus January 2018.
SOURCE: Yimian
WARC DATA
Category Jan–Feb 2018 Jan–Feb 2019 Jan–Feb 2020 2020 vs. 2019
(Tmall Sales)
Brands that are impacted are Skincare 100 284 312 110
advised to go beyond the Baby toiletries 100 191 201 105
product by focusing on soft- 100
All 123 159 129
selling with a sensitive tone, to
maintain brand awareness and SOURCE: Yimian
safeguard share of voice.
Latest Week vs. Black Friday Week 2019 Latest Week vs. Prime Day Week 2019 Latest
LatestWeek
Weekvs. YAGO
year-on-year
Torches
Edge by Ascential classes the
Tinned
Tinned/Jarred food
Foods
COVID-19 outbreak and the
response to it as a defining Crisp & Snacks
Crisps snacks
inflection point, driving Cereals
Cereals&&Breakfast
breakfast Foods
foods
shopper penetration and
Drinks
frequency into e-commerce
and food delivery services out Vitamins
of necessity. There is now a Baby Bottle
bottle Sterilizers
sterilisers
critical need for retailers and
Health
Health &
& Baby
baby Care
care
businesses to bridge the gap.
Cold
Cold &
& Flu Medication
flu medication
They are advised to leverage Medication
Other&medication
Remedies
real-time data to address any
Antiseptics & Disinfectants
disinfectants
demand spikes, upscale
delivery capacities, engage Soaps
Soap&&Hand
hand Wash
wash
with customers online and HomeCare
Home care & Cleaning
cleaning
ensure strong content across
e-commerce search pages. -50% 0% 50% 100% 150% 200% 250% 300%
Latest Week vs. Prime Day Week 2019 Latest Week vs. Cyber Week 2019 Latest
LatestWeek
Weekvs. YAGO
year-on-year
A WARC analysis of Ascential
data has also identified record
levels of FMCG sales activity Pantry
PantryStaples
staples
on Amazon in the US.
Snack
SnackFoods
food
Nielsen separately recorded Breakfast
BreakfastFoods
foods
sharp rises in grocery sales Beverages
across all US outlets, notably
for powdered milk (+85%), Grocery&&Gourmet
Grocery gourmet Food
food
dried beans (+37%), canned Multivitamins
meat (+32%), and rice (+25%).
Vitamin C
This trend is seen as ‘living a 0% 100% 200% 300% 400% 500% 600% 700%
new normal’, and crisis-buying
habits may last to become Note: Week commencing 23rd February 2020.
permanent behaviours. SOURCE: WARC Data analysis of Edge by Ascential data.
900
A full 12.7% – $60.5bn – was
removed from the value of 800
global ad trade during the 8 years
700
last recession.
600 3 years 11 years
In nominal terms, the market
had recouped this loss within 500
3 years
two years.
400
But after accounting for
inflation and currency 300
fluctuations, the market took
200
eight years to recover.
Stock market selloff/
100 devaluation of yuan/dollar
This extends to 11 years in surge impacts commodity-
Dotcom crash Global Financial Crisis
dollar terms, owing to a 0 rich economies
2011
2014
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2012
2013
2015
2016
2017
2018
2019
which hit commodity-rich
nations in 2015.
SOURCE: WARC Data Adspend Database
2008
2009
2010
2000
2001
2002
2003
2004
2005
2006
2007
2011
2012
2013
2014
2015
2016
2017
2018
2019
a signal of the perceived
value of performance
marketing in times of crisis. SOURCE: WARC Data Adspend Database, International Ad Forecast
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2008
2004
2006
2007
2009
2010
2011
2012
part, why Facebook is now
offering these companies
US$100m in ad credits. SOURCE: WARC Data, Google
Advertising investment,
Year-on-year % change,
TV Press Radio Cinema Outdoor Internet Total
2008/09
The value of the UK’s ad
market contracted by £1.7bn Food -9.4% 12.3% 32.7% 19.9% 7.4% 52.9% -1.3%
during the last recession.
Drink -19.1% -7.3% 27.4% 24.7% 27.5% 38.6% -2.3%
Household FMCG -16.7% 13.9% -33.3% 210.6% -30.8% -19.8% -12.3%
The finance sector recorded
some of the deepest cuts to ad Cosmetics & personal care -11.0% -8.6% -10.2% -8.2% -22.6% 24.0% -10.5%
investment; subsequent Automotive -23.8% -17.7% -10.3% -22.7% -45.9% 16.2% -20.5%
research finds effectiveness in 586.5% +33.4%
Retail -1.1% 4.9% 4.7% -31.0% 3.0%
the sector has declined since,
Entertainment & leisure -7.1% -1.7% 2.9% 15.9% 8.6% 6.7% -1.6%
which correlates with a shift to
short-term strategy. Finance -14.1% -19.2% 6.0% -3.5% -46.6% 30.3% -15.2%
Travel & transport -7.2% -7.3% 8.2% 47.2% -21.5% 26.1% -4.5%
Ancillary research shows Telecoms -6.9% -11.2% -7.5% 25.5% -30.4% 29.2% -9.7%
brands that focus on customer
Clothing & accessories -45.8% -16.1% -9.2% -90.7% -28.9% 30.5% -21.3%
satisfaction fare better during
recessionary periods. It is hard Media -27.0% -10.5% -5.5% 28.0% -1.6% -12.0% -16.0%
to recoup lost equity and share Business & industrial 9.3% -15.7% -16.5% 136.7% 5.6% 35.5% -1.2%
– the best way to ensure long Total market -9.8% -17.0% -9.8% 4.9% -16.9% 5.7% -11.7%
term brand growth is to
maintain advertising spend.
Note: Green denotes stronger than total market, red denotes weaker. Press in print newspapers and magazines. Internet is display only.
SOURCE: Nielsen Ad Intel, AA/WARC Advertising Statistics Yearbook/Expenditure Report
-15%
-15.3%
-20%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018 2019
ITV saw advertising revenue grow at its quickest rate in nearly two
years during Q4 2019, up 1.8% and reversing a steep decline seen at
300
the beginning of the year. 269
250
However, ad revenue is expected to fall by at least 10% in April, in 200
stark contrast to the strong growth of 8% seen last year. Retail and 160 157
leisure were the two largest sectors in 2019, but both are vulnerable 150
108 103 100 99
to consumers spending less time outside. 100
94 91 90
50
As consumers watch more TV, ITV’s daytime content recorded the
largest audience on a Wednesday in seven years. However, the 0
broadcaster has now had to cut its programme budget by £100m.
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2017 2018 2019
Note: Digital subscriptions does not include readers who receive free access as part of their print subscription.
SOURCE: Company reports
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WARC DATA