Digital advertising keeps growing during the coronavirus pandemic


The pandemic has slowed the growth of digital advertising. Still, the coronavirus will not stop online ads from becoming a larger part of the total advertising market this year, according to a note to investors from analysts at investment firm Canaccord Genuity.

The report, written by Canaccord Genuity analysts Maria Ripps and Michael Graham, offers no specific projections about U.S. digital ad spending by retailers. But the analysts say ecommerce advertising should grow over the next few months “as more holiday shopping moves online compared to prior years,” and product discovery shifts to browsing websites from walking through malls and stores.

Overall, advertising spending recovered from the “sharp dislocation” in March when the pandemic-related lockdowns started, but advertisers are still showing a lot of inconsistency, Ripps and Graham write. The analysts attribute ad-spending volatility to uncertainty about the upcoming presidential election and a resurgence of COVID-19 in many parts of the country.

In this environment, Ripps and Graham say they don’t expect brands to experiment with new digital marketing strategies. Testing new platforms now might not tell advertisers much about how well those platforms will perform once the marketplace normalizes, they say. “Due to the unusual environment, brands are often deciding to play it safe and are allocating even more of their spend to proven digital channels like Facebook and Google,” the report says.

How will retailers deploy their marketing dollars during the holiday? A recent Digital Commerce 360 survey of 118 online retailers conducted from July through September 2020 found 62% of respondents said they would make email a bigger part of their holiday marketing budgets this year—making email the most-cited option. Also highly cited were social media (57%), content marketing (51%) and search engine ads (50%).

 


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