The COVID-19 Impact on Advertising Spend
Before the COVID-19 outbreak, global advertising investment was estimated to grow at a 7.1% clip in 2020.
Now, it is estimated to see a brutal contraction of 8.1%—equating to almost $50 billion—as a result of changing consumer behavior. The total loss becomes a bleak $96.4 billion when taking pre-pandemic growth forecasts into account.
Today’s graphic uses data from the World Advertising Research Center (WARC) to visualize the estimated decline in advertising spend by media format and industry.
As advertisers adapt to rising in-home media consumption, the tug-of-war for ad dollars between online and traditional media seems to have a decisive winner.
The Death of Traditional Media
After decades of experts predicting the death of traditional media formats, the COVID-19 pandemic could be the last nail in the coffin.
In fact, spend across every type of traditional media format will see a decline in 2020, while most online media formats are expected to see an increase in spending.
Mid-term, this era will be associated with an accelerant of latent and incremental trends towards more digital consumption, commerce, and thus advertising”
—Dr. Daniel Knapp, Interactive Advertising Bureau Europe
With consumers spending significantly more time at home, brands are allocating more dollars to certain media formats to reflect that. However, when it comes to traditional in-home formats such as TV, consumers are opting for streaming services instead. In fact, they are streaming twice as much online video on services such as Netflix compared to last year.
Spending Estimates, by Category
Almost every industry will see reduced spending. The one category that will buck the trend is “Telecoms & Utilities”, which will experience a 4.3% increase in ad spend throughout the year.
Interestingly, stay-at-home restrictions have increased consumers’ reliance on these services for staying connected with loved ones and working from home.
Moreover, the pandemic has proved to be a turning point for the telecommunications industry, as the importance of faster internet speeds are emphasized and the potential of 5G is realized.
The Road to Recovery?
When inflation and exchange rates are taken into account, the decline in advertising spend is expected to be worse than that experienced during the global financial crisis.
Although 2021 shows signs of recovery, WARC suggests this is reflective of how steep the decline in 2020 will be.
Data shows that global advertising spending growth did not fully recover for eight years following the previous recession, so a swift recovery may be highly unlikely, and returning to pre-pandemic growth rates may not be possible for a number of years.
The Changing Advertising Landscape
As advertisers come to terms with their new reality, they are faced with the uncertainty of changing consumer behavior and the potential for a second wave of the pandemic, tightening quarantine restrictions once more.
Could COVID-19 be accelerating the inevitable shift to digital, or is the pain for traditional media only temporary?
The Top 50 Most Valuable Global Brands
This graphic showcases 2020’s top 50 most valuable global brands and explores how COVID-19 has triggered a brand shift with huge implications.
Visualizing the Top 50 Most Valuable Global Brands
For many brands, it has been a devastating year to say the least.
Over half of the most valuable global brands have experienced a decline in brand value, a measure that takes financial projections, brand roles in purchase decisions, and strengths against competitors into consideration. But where some have faltered, others have asserted their dominance and stepped up for their customers like never before.
The visualization above showcases the top 50 most valuable global brands from a study conducted by Interbrand, which calculates brand value across hundreds of companies.
As consumers move cautiously into 2021, which brands have they chosen to keep by their side?
The Heavy Hitters
With an eye-watering brand value of $323 billion, Apple is the most valuable global brand in the world, followed closely by Amazon in second place, and Microsoft in third. Average growth in brand value across all three of these tech brands in 2020 was roughly 50%.
In particular, Microsoft—who overtook Google in this year’s ranking—has increased its brand value by $100 billion in just one decade. The tech giant has reinvented itself over the years by focusing not just on how its products impact consumers’ lives, but instead on how they impact the planet. The company is promising to become carbon negative by 2030.
However, other brands that sit at the top of the global brands list have not had the same recent success. Coca-Cola for example sits in sixth place, but has seen a decline in brand value of over $13 billion since 2010.
Here is the full list of the most valuable global brands in 2020:
|Rank||Brand||Brand Value||YoY % Change||Industry|
|#6||Coca-Cola||$57B||-10%||Food & Beverage|
|#22||J.P. Morgan||$20B||6%||Financial Services|
|#23||American Express||$19B||-10%||Financial Services|
|#26||Pepsi||$19B||-9%||Food & Beverage|
|#29||General Electric||$18B||-30%||Industrial Machinery|
|#33||Budweiser||$16B||-3%||Food & Beverage|
|#34||Pampers||$15B||-4%||Consumer Packaged Goods|
|#38||Nescafé||$14B||2%||Food & Beverage|
|#43||L'Oreal||$13B||8%||Consumer Packaged Goods|
|#49||Goldman Sachs||$12B||7%||Financial Services|
|#53||Philips||$12B||0%||Consumer Packaged Goods|
|#54||Gillette||$12B||-16%||Consumer Packaged Goods|
|#56||Starbucks||$11B||-5%||Food & Beverage|
|#62||Danone||$10B||4%||Food & Beverage|
|#63||Nestlé||$10B||8%||Food & Beverage|
|#66||Kellogg's||$10B||-8%||Food & Beverage|
|#68||Colgate||$9B||6%||Consumer Packaged Goods|
|#69||Morgan Stanely||$9B||8%||Financial Services|
|#72||Lego||$8B||9%||Consumer Packaged Goods|
|#77||Hewlett Packard Enterprise||$7B||-16%||Technology|
|#78||Corona||$7B||3%||Food & Beverage|
|#82||Jack Daniel's||$6B||-1%||Food & Beverage|
|#85||Panasonic||$6B||-6%||Consumer Packaged Goods|
|#87||Johnson & Johnson||$6B||1%||Consumer Packaged Goods|
|#88||Heineken||$6B||-2%||Food & Beverage|
|#89||John Deere||$5B||-9%||Industrial Machinery|
|#91||Hennessy||$5B||-3%||Food & Beverage|
|#92||KFC||$5B||-7%||Food & Beverage|
|#94||Tiffany & Co.||$5B||-7%||Luxury|
|#98||Johnnie Walker||$5B||New||Food & Beverage|
It is clear that brands that went above and beyond during the COVID-19 pandemic not only benefit from more meaningful connections with their customers; it also pays financially—with brand value for all 100 companies included in the study totaling $2 trillion.
Movers and Shakers
When it comes to 2020’s fastest risers, Amazon, Microsoft, Spotify, and Netflix lead the way.
Not too far behind these brands is PayPal, which saw 38% growth in the last year due to some major strategic pivots. More recently, the brand announced it would be redirecting capital from shareholders and investing in low-level employees who have been essential during the pandemic.
Other brands making their mark in 2020 are Instagram, Tesla, and YouTube—all of which are new to the ranking and are experiencing significant growth in brand value. In fact, electric vehicle company Tesla experienced a 769% increase in market capitalization in just twelve months, making it the world’s most valuable automaker.
The Great Brand Shift
As pharmaceutical companies begin distributing vaccines across the globe, consumer optimism is starting to build again. However, the future of brands remains uncertain.
Only 41 out of 100 most valuable global brands remain in the ranking today from the study conducted in 2000. With almost 60 hugely influential brands falling out of favor in the last two decades, there are several ways in which today’s brands can build economic resilience and thrive in an anxious world:
- Leadership: The degree to which a brand has a clear purpose that is executed seamlessly across the entire organization.
- Engagement: Creating meaningful and collaborative relationships with consumers based on the brand’s unique story and reason for being.
- Relevance: Being omnipresent for customers and delivering on their expectations by going beyond selling products or services.
Although the impacts of 2020 will be felt for years to come, brands that stay ahead of consumers’ changing expectations will be in a better position to weather the storm.
Pandemic Proof: The Most Loved Brands of COVID-19
This graphic compares consumers’ most loved brands before the COVID-19 pandemic to their most loved brands during the pandemic.
Pandemic Proof: The Most Loved Brands of COVID-19
View the high-resolution of the infographic by clicking here.
Since March of this year, the COVID-19 pandemic has forced millions of people to physically distance themselves from others, yet many feel closer to their loved ones than ever before.
When it comes to brands, consumers have forged relationships that could be just as meaningful. In fact, consumers demonstrated a 23% increase in the number of brands they have an emotional connection with—so what does this mean for brands?
The graphic above highlights data from MBLM’s Brand Intimacy COVID Study which measures how emotionally connected consumers in the U.S. are to the brands they use, and how brands can benefit.
The Power of Love
While attracting eyeballs or increasing foot traffic may carry a lot of weight when it comes to determining the success of certain brands, the real metric that should be paid attention to is love.
Brands that nurture emotional bonds with their customers tend to outperform top companies listed on the S&P 500 and Fortune 500 in both revenue and profit. Not only that, they can also build higher levels of trust, which in turn breeds a more loyal consumer base over time.
“The concept of brand intimacy is important for marketers because emotion has been proven to drive purchase decisions, and also long-term customer bonds.”
—MBLM Managing Partner, Mario Natarelli
As the global pandemic rages on, this idea has become more relevant than ever before. Consumers have been using their newfound time to deepen their relationship with brands, but who has managed to win their hearts?
Brand Love in the Time of COVID-19
Apple has been named as the most loved brand during COVID-19, moving up from third place before the pandemic. Even though the tech giant beat Disney and Amazon for the top spot, its success can mostly be attributed to female and millennial consumers, while Amazon was voted the most loved brand for male consumers.
The list of most loved brands has seen three new additions throughout the year: Google, YouTube, and Toyota, which means that media and entertainment brands now dominate the list. The retail industry has also increased intimacy score performance by 9.4% during the pandemic, with Walmart flying the flag for retail brands in fourth place.
The Formula for a Happy Relationship
When it comes to giving consumers what they want, Apple ticks the box for three important need states highlighted in the report:
- Fulfilment: A brand that exceeds expectations by delivering on superior service, quality, and efficacy.
- Ritual: When a person ingrains a brand into his or her daily actions, it becomes a vitally important part of their everyday life.
- Enhancement: Customers become better through use of the brand—smarter, more capable, and more connected.
Interestingly, brands that are part of the smartphone ecosystem generally outperform brands that are not, and the ecosystem has only increased in strength during the pandemic. Moreover, brands that fall into the “devices” or “content/information” categories have higher intimacy scores, and are therefore more loved.
There has also been an increase in the performance of brands in the “access” category—such as Verizon and AT&T—which may be attributed to the value people are placing on communication during the pandemic.
It’s also worth noting that consumers have increased their usage of virtual conferencing brand Zoom more than any other brand in the study.
While hand sanitizer brand Purell did not make the list of most loved brands, it ranked in first place when it comes to the best response to the pandemic and is the brand consumers are most willing to pay 20% more for.
Overall, it is clear that COVID-19 has had a huge influence on the brands that consumers connect with most. With their preferences now leaning towards brands in the smartphone ecosystem, one has to wonder: will marketers of the future place more value on winning the hearts of consumers, or simply getting in their hands?
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