Visualizing the COVID-19 Impact on Advertising Spend
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The COVID-19 Impact on Advertising Spend

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covid-19 spend

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.

covid-19 spend

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?

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Ranked: The Reputation of 100 Major Brands in the U.S.

What comes to mind when you think of a good or bad brand? This poll ranks the brand reputation of 100 major companies in America.

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Ranked: The Reputation of 100 Major Brands in the U.S.

Whether you’re a country or a company, brand reputation is crucial. For corporations trying to stand out amongst an array of competitors, name recognition can be make or break.

The Axios Harris Poll polled a nationally representative sample of nearly 43,000 Americans to find out which 100 companies emerge as top of mind—for better or for worse.

How is Brand Reputation Measured?

The polling process started by asking respondents which two companies they felt excelled or faltered in the U.S.—in other words, which companies were the most “visible” in their eyes.

The top 100 brands that emerged from this framework were then judged by poll respondents across seven dimensions, over three key pillars:

  • Character
    Includes a company’s culture, ethics, and citizenship (whether a consumer shares a company’s values or the company supports good causes)
  • Trajectory
    Includes a company’s growth prospects, vision for the future, and product and service offerings (whether they are innovative, and of high quality)
  • Trust
    Does a consumer trust the brand in the first place?

Once these dimensions are taken into account, the final scores portray how these “visible brands” rank in terms of their reputation among a representative sample of Americans:

  • Score range: 80.0 and above
    Reputation: Excellent
  • Score range: 75.0-79.9
    Reputation: Very Good
  • Score range: 70.0-74.9
    Reputation: Good
  • Score range: 65.0-69.9
    Reputation: Fair
  • Score range: 64.9 and below
    Reputation: Poor

Companies with a Very Poor reputation (a score below 50) didn’t make it into the list. Here’s how the 100 most visible companies stack up in terms of brand reputation:

2021 RankCompany2021 ScoreOverall Reputation
#1Patagonia82.7Excellent
#2Honda Motor Company81.6Excellent
#3Moderna81.3Excellent
#4Chick-fil-A81.1Excellent
#5SpaceX81.1Excellent
#6Chewy80.9Excellent
#7Pfizer80.2Excellent
#8Tesla Motors80.2Excellent
#9Costco80.1Excellent
#10Amazon.com80.0Excellent
#11REI79.9Very Good
#12USAA79.2Very Good
#13Wegmans79.2Very Good
#14Subaru79.2Very Good
#15Unilever79.2Very Good
#16Apple79.1Very Good
#17In-n-Out Burger78.7Very Good
#18Toyota Motor Corporation78.7Very Good
#19UPS78.6Very Good
#20PepsiCo78.5Very Good
#21IKEA78.4Very Good
#22Lowe's78.3Very Good
#23Publix Supermarkets78.2Very Good
#24CVS (CVS Health)78.2Very Good
#253M Company78.1Very Good
#26HP, Inc.78.1Very Good
#27Berkshire Hathaway78.0Very Good
#28Hulu77.9Very Good
#29Nestle77.7Very Good
#30The Kroger Company77.5Very Good
#31Samsung77.5Very Good
#32Paypal77.5Very Good
#33FedEx Corporation77.4Very Good
#34Sony77.3Very Good
#35Procter & Gamble Co.77.0Very Good
#36Microsoft76.8Very Good
#37The Walt Disney Company76.7Very Good
#38Netflix76.4Very Good
#39IBM76.3Very Good
#40General Electric76.1Very Good
#41Target76.0Very Good
#42Wayfair75.8Very Good
#43Citigroup75.7Very Good
#44American Express75.6Very Good
#45The Home Depot75.4Very Good
#46Walgreens75.3Very Good
#47Kaiser Permanente75.3Very Good
#48Best Buy75.2Very Good
#49Adidas75.1Very Good
#50Ford Motor Company75.1Very Good
#51Electronic Arts, Inc.74.7Good
#52State Farm Insurance74.7Good
#53Hobby Lobby74.5Good
#54JPMorgan Chase & Co.74.5Good
#55Kohl's74.4Good
#56T-Mobile74.3Good
#57Domino's Pizza73.7Good
#58The Coca-Cola Company73.7Good
#59Goya73.5Good
#60Google73.3Good
#61Verizon Communications73.2Good
#62Nike72.8Good
#63Nordstrom72.8Good
#64Macy's72.3Good
#65Starbucks Corporation72.3Good
#66eBay72.1Good
#67Wendy's72.1Good
#68General Motors72.0Good
#69Royal Dutch Shell71.6Good
#70Yum! Brands71.5Good
#71Dollar General71.4Good
#72Johnson & Johnson71.4Good
#73McDonald's71.1Good
#74Dollar Tree71.1Good
#75Fiat Chrysler Automobiles70.8Good
#76Chipotle70.8Good
#77Bank of America70.5Good
#78Reddit70.4Good
#79Robinhood70.4Good
#80ExxonMobil70.4Good
#81Delta Air Lines70.4Good
#82GameStop69.7Fair
#83Walmart69.7Fair
#84Burger King69.4Fair
#85BP68.2Fair
#86AT&T67.6Fair
#87United Airlines67.4Fair
#88Huawei Technologies67.1Fair
#89JCPenney66.3Fair
#90Uber66.2Fair
#91My Pillow66.0Fair
#92Comcast65.8Fair
#93Twitter63.4Poor
#94TikTok63.0Poor
#95Wells Fargo & Company63.0Poor
#96Sears Holdings Corporation61.2Poor
#97Wish.com60.7Poor
#98Facebook60.0Poor
#99Fox Corporation59.2Poor
#100The Trump Organization56.9Poor

While the ranking itself highlights well-respected and poorly-viewed brands overall, another perspective is to look at which brands shot up in the list, and which ones plummeted.

Fastest Risers in Brand Reputation

Unwavering and bold commitments to the environment has helped Patagonia to top the charts as the #1 brand, rising 31 ranks since 2020. From funneling 1% of sales into environmental donations to ensuring ethical supply chains, Patagonia’s culture, ethics, and citizenship all align with its business model in consumers’ eyes.

With over 33 million COVID-19 vaccine doses administered daily around the world, Pfizer’s contribution to the ongoing immunization progress is undeniable. As a result, its overall ranking has swelled by 54 places since 2020.

Rank in 2021Brand2021 ScoreChange
#7Pfizer80.2+54
#1Patagonia82.7+31
#15Unilever79.2+20
#71Dollar General71.4+19
#43Citigroup75.7+17
#2Honda Motor Company81.6+14
#24CVS (CVS Health)78.2+13
#27Berkshire Hathaway78+13
#50Ford Motor Company75.1+13
#56T-Mobile74.3+13

Dollar General might seem like a surprising addition to this table, but in terms of sheer growth, discount stores are thriving. Across America, dollar stores are opening at a rate of three per day, faster than any Starbucks or McDonalds.

There’s a crucial reason for this: in many rural areas, millions rely on dollar stores for food and other essentials, as the nearest grocery store can be nearly an hour’s drive away.

Biggest Decliners in Brand Reputation

Despite steady revenue growth, Google is among a handful of Big Tech companies whose reputations are backsliding, dropping 36 places in the past year. The outsize power and influence these companies hold is increasingly coming under regulatory scrutiny.

Rank in 2021Brand2021 ScoreChange
#60Google73.3-36
#35Procter & Gamble Co.77-27
#81Delta Air Lines70.4-24
#30The Kroger Company77.5-21
#38Netflix76.4-21
#70Yum! Brands71.5-21
#23Publix Supermarkets78.2-19
#36Microsoft76.8-17
#58The Coca-Cola Company73.7-17
#67Wendy's72.1-17

Although Netflix pioneered the world of streaming, it is now facing stiff competition from emerging subscription services. Amazon’s latest acquisition of Metro-Goldwyn-Mayer (MGM Studios) will especially bolster the content catalog available on Prime Video.

Building a Brand Reputation Doesn’t Come Easy

Near the bottom of the 100 companies leaderboard, the struggles of mainstream media and modern information dissemination are strongly reflected. Despite their diverse audiences and established histories, brand reputations of both Facebook and Fox News have eroded in recent years.

This example highlights how the nature of a brand’s reputation can evolve over time. Building a strong and reputable brand may be subjective, but its effects on consumer loyalty are powerful.

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Demographics

How Media Consumption Evolved Throughout COVID-19

This infographic examines trends in each generation’s media consumption to see how Americans adapted during the pandemic.

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How Media Consumption Evolved Throughout COVID-19

View the full size version of this infographic by clicking here

Media consumption spiked in the early days of the COVID-19 outbreak as Americans actively sought information and entertainment while at home. Whether this changed over the course of 2020 remains unclear, however.

To dive deeper into the issue, this infographic explores each generation’s shifts in media consumption habits as the pandemic wore on.

Further below, we’ll also examine which media sources Americans deemed to be the most trustworthy, and why consumption habits may have changed for good.

Changes in American Media Consumption, by Generation

The data in this infographic comes from two surveys conducted by Global Web Index (GWI). The first was completed in April 2020 (N=2,337) and asked participants a series of questions regarding media consumption during COVID-19.

To see how consumption had changed by the end of the year, the John S. and James L. Knight Foundation commissioned GWI to complete a follow-up survey in December 2020 (N=2,014). The following tables provide a summary of the results.

Gen Z

Unsurprisingly, a significant percentage of Gen Z reported an increase in digital media consumption in April 2020 in comparison to pre-pandemic habits. This bump was driven by higher use of online videos, video games, and online TV/streaming films.

By December 2020, these media categories became even more popular with this cohort. Most notably, podcasts saw the highest increase, jumping almost 15% by the end of the year.

CategoryApril 2020December 2020Change (percentage points)
Podcasts10.9%25.8%+14.9%
Video Games29.9%42.1%+12.2%
Music Streaming28.0%34.6%+6.6%
Broadcast TV24.1%17.0%-7.1%
Online TV / streaming films36.8%39%+2.2%
Online Videos (Youtube/TikTok/etc.)51.4%59.1%+7.7%
Livestreams17.4%19.5%+2.1%
Books / literature17.1%20.1%+3.0%
Online Press19.9%17.0%-2.9%
Physical Press8.9%6.3%-2.6%
Radio17.8%10.7%-7.1%
None9.0%13.8%+4.8%

The popularity of traditional outlets like broadcast TV and radio declined from their April 2020 highs, though they are still up relative to pre-pandemic levels for Gen Z survey respondents.

Millennials

Results from the December 2020 survey show that Millennials trimmed their media consumption from earlier in the year. This was most apparent in news outlets (online and physical press), which saw double digit declines in popularity relative to April.

CategoryApril 2020December 2020Change (percentage points)
Podcasts20.9%26.3%+5.4%
Video Games32.1%29.6%-2.5%
Music Streaming37.4%30.2%-7.2%
Broadcast TV35.7%24.6%-11.1
Online TV / streaming films42.2%39.2%-3.0
Online Videos (Youtube/TikTok/etc.)44.9%42.5%-2.4%
Livestreams32.9%15.6%-17.3%
Books / literature20.4%24%+3.6%
Online Press37.0%16.5%-20.5%
Physical Press20.3%8.0%-12.3%
Radio27.2%17.9%-9.3%
None9.1%20.3%+11.2%

Books and podcasts were the only two categories to capture more interest from Millennials over the time period. It’s also worth noting that the percentage of respondents who said “none” for media consumption rose to 20.3%, up significantly from 9.1% in April.

Possible factors for the increase in “none” responses include easing government restrictions and a return to more normal work schedules.

Gen X

The media consumption habits of Gen X developed similarly to Millennials over the year.

CategoryApril 2020December 2020Change (percentage points)
Podcasts11.1%13.3%+2.2%
Video Games20.4%16.8%-3.6%
Music Streaming29.6%21.7%-7.9%
Broadcast TV46.4%29.8%-16.6%
Online TV / streaming films40.8%29.9%-10.9%
Online Videos (Youtube/TikTok/etc.)38.5%23.6%-14.9%
Livestreams23.4%8.4%-15.0%
Books / literature22.2%22.6%+0.4%
Online Press32.7%14.3%-18.4%
Physical Press7.6%4.6%-3.0%
Radio23.5%16.6%-6.9%
None16.0%28.9%+12.9%

Broadcast TV and online press saw the largest declines over the time period, while once again, podcasts and books were the only two categories to capture more interest relative to April. The percentage of respondents reporting “none” rose to 28.9%—a slightly higher share than that of Millennials.

Boomers

Media consumption trends among Baby Boomers were mixed, with some categories increasing and others decreasing since April. Broadcast TV saw the biggest decline in usage of all media types, but remained the most popular category for this cohort.

CategoryApril 2020December 2020Change (percentage points)
Podcasts4.4%7.9%+3.5%
Video Games10.5%9.5%-1.0%
Music Streaming13.7%14.4%+0.7%
Broadcast TV42.3%36.7%-5.6%
Online TV / streaming films22.5%22.0%-0.5%
Online videos (Youtube/TikTok/etc.)11.6%18.2%+6.6%
Livestreams8.8%6.5%-2.3%
Books / literature13.7%17.4%+3.7%
Online Press13.8%11.4%-2.4%
Physical Press7.1%4.6%-2.5%
Radio15.3%15.5%+0.2%
None23.0%31.0%+8.0%

Boomers also had the largest share of “none” respondents in both studies (23.0% in April and 31.0% in December).

Where do Americans Go For Trustworthy News?

To learn more about American media consumption—particularly when it came to staying updated on the pandemic—survey respondents were asked to confirm which of the following sources they found trustworthy.

Knight Foundation Trustworthy Sources

The deviations between each generation don’t appear to be too drastic, but there are some key takeaways from this data.

For starters, Gen Z appears to be more skeptical of mainstream news channels like CNN, with only 28.9% believing them to be trustworthy. This contrasts the most with Gen X, which saw 40.1% of its respondents give news channels the thumbs up.

This story is flipped when we turn to the World Health Organization (WHO). Gen Z demonstrated the highest levels of trust in information published by WHO, at 50.3% of respondents. Only 39.0% of Gen X could say the same.

By far the least trustworthy source was foreign governments’ websites. This category had the lowest average approval rating across the four generations, and scored especially poor with Boomers.

The Lasting Effects of the Pandemic

Habits that were picked up during 2020 are likely to linger, even as life finally returns to normal. To find out what’s changed, respondents were asked which categories of media they expected to continue consuming in elevated amounts.

The chart below shows each generation’s top three responses.

media consumption after COVID

Note that the top three for both Gen Z and Millennials are all digital and online categories (video games can be played offline, but the majority of popular titles are online). This contrasts with the preferences of Gen X and Boomers, who appear to be sticking with more traditional outlets in broadcast TV and books.

With consumption habits of younger and older Americans moving in opposite directions, advertisers and media companies will likely need a clear understanding of their target audiences in order to be successful.

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