Hi and welcome back to Advertising and Media Insider, your weekly industry news roundup. I’m Lucia Moses, deputy editor here.
First: We’re getting ready to publish our annual list of the world’s most innovative CMOs. Read about it and submit your nominations here.
CEOs mull advertising’s future
For a newsroom-wide project, we asked CEOs of some of the biggest advertising and media companies, from WPP and Edelman to Barstool and Vice Media how their businesses and the industry will change, from creating more opportunities to entertain people while they’re at home to speeding up the adoption of technology to get work done. Read their full responses here:
- The CEOs of WPP, Publicis, Edelman and more explain how the pandemic will change advertising, from shrinking office space to improving creative output
- CEOs from ViacomCBS, Vice, Complex, and more explain how the pandemic will fundamentally change the media business
Weber Shandwick’s reckoning
For now, though, the news this past week illustrates the double-sided nature of the economic downturn for the ad business.
On the one hand is the steady drumbeat of cost cuts across agencies that depend on ad spending, as PR giant Weber Shandwick started laying off and furloughing staff. Days before, ad holding company Publicis started layoffs across many of its agencies.
- Top PR firm Weber Shandwick started furloughs and layoffs as clients like Royal Caribbean and AB InBev cut spending. Read the CEO’s internal memo
- Ad giant Publicis Groupe and data firm Epsilon cut staff in the US as clients like Disney and L’Oreal slash their marketing budgets
The cuts are a response to big clients slashing spending (Publicis has Disney and L’Oreal while Weber has Royal Caribbean, whose industries have been crushed by the pandemic) and new business drying up as companies halt for new assignments and agency searches, Weber said in a memo.
Fewer ad dollars sloshing around means less money for ad tech companies that enable online advertising, which were already facing consolidation pressures before the pandemic struck.
But for others, the pandemic is an opportunity. Online learning startup MasterClass spent more on advertising in March and April 2020 than all of 2019, when it spent a little over $US6 million, according to estimates, to go after people who are looking for diversions while stuck at home.
Read more: Online education startup MasterClass is launching an ad blitz to capitalise on people staying home during the pandemic
Now that the cost of buying pricey TV spots just got more affordable, it will be interesting to see if more direct-to-consumer startups that have mostly stuck to performance-based advertising take the plunge.
But it will take a lot of MasterClasses to make up for the $US100 million or so Royal Caribbean is estimated to have spent on advertising in 2019.
TV’s death spiral
The numbers are coming in: People are watching more TV while they’re stuck at home, but cutting the cord in bigger numbers than ever. Ashley Rodriguez breaks down how pay TV isn’t giving sports fans their fix, and those seeking entertainment can find it on demand for less on Netflix and Hulu. And there’s good reason to think pay TV won’t come back.
Read the rest here: A new wave of cord-cutters is leaving cable and satellite TV for good and experts say it’s sending the pay-TV bundle into a ‘death spiral’
Don’t write off influencers
A lot of people are writing the influencer obit. The aspirational life many of them sell seems at odds with a time when many people are just trying to muddle through. Many marketers are cutting influencers from their budgets to avoid sounding tone-deaf.
But as Amanda Perelli and Dan Whateley write, some influencers are finding other ways to make money, like selling merchandise, creating subscription-based memberships, and more.
Those who succeed in developing other ways of making money might find they don’t need the mighty YouTube or Instagram for advertising as much when those deals and rates do come back.
Read more: 8 ways YouTube and Instagram influencers are earning money besides advertising, as brand sponsorships stall
Here are other great reads from around media and advertising:
- Barstool Sports’ CEO explains why she’s betting on TikTok and Instagram Live and how the pandemic is shaping the future of sports media
- Greycroft cofounder Ian Sigalow predicts Uber will make another acquisition and reveals how he’s investing during the pandemic
- The New York Times head of advertising says layoffs are ‘likely’ due to a decline in ad revenue – read the internal memo
- Meet 22 top public relations pros who are expert at spinning bad news, managing the press – and are on the market
- A TikTok talent group and esports team are betting that gaming will be the app’s next break-out category. Here’s their plan to connect video game brands with TikTok’s Gen-Z audience.
- A top Alibaba exec reveals how the Chinese giant is trying to court US businesses threatened by the coronavirus and fend off Amazon
- Complex Networks is profitable, has diversified revenue, and wants to compete with the entertainment giants – here’s its pitch deck
That’s it for this week. Thanks for reading, and if you’re getting this email forwarded, sign up for your own and share it with others by clicking here.