It’s clear that, depending on industry vertical, COVID-19 is having a different impact on ad spend and performance. And everyone has a theory about which ones will come out ahead.
But in digital advertising, it’s never a good idea to base your strategy on hunches – you’ve got to look at the numbers. That’s why below we’re sharing an analysis based on data from 56,000 active campaigns inside the Acquisio platform.
Which industries are reducing their investment in advertising? How are the industry-specific shifts affecting impressions, clicks, CPCs, and CTRs? Read on to find out if the data backs up what experts are predicting.
Keep Calm And Campaign On
The following verticals were included in our analysis. We’ll take an especially detailed look at the automotive sector and local advertisers.
- Real Estate
- Legal Services
- Leisure & Recreation
- Education & Employment
- Travel & Tourism
- Automotive (broken down into dealerships, rental, repair, and parts businesses)
- Local Businesses (broken down into retailers and service providers of different types)
For those in the TL;DR club, here’s a short summary of our findings before we get into the weeds.
Our data backs up the idea that the hardest hit verticals are the ones you might expect: anything related to travel or physical locations. Consumer demand dropped so significantly that these industries opted to pause campaigns and cut ad spend dramatically.
On the other hand, we’re seeing that local grocery establishments that are still advertising are seeing great CPCs and high impressions and clicks. This is an opportunity for any agency serving local audiences to take note of.
Finally, there’s one very encouraging finding. When we look at the numbers many industries are hurt by COVID-19 but not to an irreparable extent. Despite alarming reports, from a digital advertising perspective, many verticals are continuing to invest for now.
That’s good news for marketers. And it makes sense. While it is tempting to cut back on marketing during a crisis, the reality is that you need to attract potential customers now more than ever.
There’s a light at the end of the tunnel. Many are predicting a strong economic bounce back as soon as social distancing ends. We just need to help our clients and our industries to make it through. We’re hoping the following analysis will equip you with the facts to do just that.
How the Study Was Conducted
Our analysis is based on data from 56,000 campaigns, created by 7,500 advertiser accounts inside the Acquisio platform from the beginning of 2020 until now. The data comes only from North American campaigns.
Each table shows a week-by-week analysis for each industry since the beginning of 2020. We pay special attention to weeks 11 to 17 of 2020 corresponding to the dates of March 9 to April 20, 2020.
This timeframe is crucial. March 11th, 2020 is the date that the World Health Organization officially declared COVID-19 as a worldwide pandemic. And March 16th, 2020 is the date President Donald Trump announced his support for 14 days of social distancing. This is also the period when we began seeing significant drops in global stocks.
Our study looks at medians rather than averages in order to prevent data from being skewed by outliers.
Industry by Industry Analysis
|Summary of COVID-19 Impact on Ad Spend & Performance|
|Minimally Impacted||Negatively Impacted||Positively Impacted|
For a while we were still seeing numerous ads for financial planning services. As jobless rates rise and businesses struggle, consumers are looking for financial assistance. The financial industry was not seeing significant drops in weeks 11 and 12 immediately following major developments.
But in week 13 (March 23–29) we are seeing drops in every metric: impressions, clicks, and ad spend. Starting April 6 (weeks 15-16), we start seeing impressions and clicks slowly crawl back up, though it is still low in a YoY comparison. We will monitor this trend closely to see if it continues in the following weeks.
Because of the particular effect that COVID-19 has on the health industry, we felt it wise to split our medical vertical data into alternative, elective, and non-elective.
In alternative medicine, which includes acupuncture and chiropractic clinics, impressions have been stable, but clicks saw a 43% drop in weeks 12 and 13. There was also a 36% drop in ad spend. This indicates that alternative medicine practitioners are likely to be pausing low-performing campaigns, which leads to lowered competition and a corresponding large jump in impressions and clicks in week 15.
Elective medical includes services such as cosmetic surgery, dermatologists, and nutritionists. During the first weeks of COVID-19, there was a drop in impressions and clicks for elective medical advertising while CPC and CTR held steady. In weeks 15-17, metrics are beginning to crawl upward. Time will tell if this trend holds. But we do know that many elective health services closed fully or partially during social distancing but some services may soon be allowed to re-open as more and more US states life lockdown requirements.
Now is a great time for elective medical to get back into the advertising game in anticipation of demand returning.
Non-elective medical advertising saw drops across all metrics in the first weeks of social distancing. In the week of April 20 (week 17) we are starting to see an uptick across the board. The initial drop may be explained by the reduction of hospital service offerings in order to conserve resources for potential COVID-19 patients.
The real estate sector is seeing a slight drop in both impressions and clicks starting weeks 10 to 12 but has remained quite steady since then.
The impact of social distancing on the real estate market has been immediate because of the challenge of conducting property visits and the reduced ability to afford mortgages. The National Association of Realtors predicts a slow spring. The coming weeks may show a change in trends.
The legal services is another industry where all metrics have been generally consistent since the beginning of 2020. There has been a slow decline in clicks and impressions in more recent weeks.
Some legal sectors such as employment law are predicted to grow in the face of nation-wide layoffs. But things like mergers & acquisitions are being paused. We continue tracking to determine if larger changes come.
Leisure & Recreation
Leisure & Recreation includes businesses like bowling alleys, spas, and movie theaters. In 2019, impressions and clicks for the first two weeks of March saw a boost. It is spring break after all!
So it’s especially notable that for the same timeframe in 2020 we are seeing instead a drop across all metrics. People are just not going outside their homes for recreational activities.
It’s worth mentioning that many of the businesses included in this vertical are related to physical locations, which could explain the negative impact. Virtual leisure activities like online gaming are seeing a spike right now.
The Fitness category includes businesses offering dance classes, gym memberships, yoga lessons, and more. So far, there is no indication of a positive or negative impact from COVID-19.
This is surprising given that the fitness industry is experiencing an across the board drop in revenue. Though many are pivoting to a virtual offering, the competition is fierce so they could certainly benefit from a bit of assistance from digital advertising. Indeed, there is possibly an increased need for at-home fitness as quarantines force many into a more sedentary mode of life. This likely explains the continued increase in CPC, impressions, and clicks in April (weeks 15-17).
Education & Employment
COVID-19 has precipitated worldwide school closures at every level of education. But despite this, the metrics reflect no drastic changes in this industry’s advertising practices. We will be keeping a close eye on this.
While it is predicted that enrollment from international applicants will fall, there is also a possibility of an increase in local enrollment. One effect most seem to agree on is that competition will be even fiercer when it comes to finding potential applicants. A strong, digital-focused advertising strategy will be needed.
Travel & Tourism
Tourism is one of the most affected sectors due to travel restrictions and many airports being shut down. Unsurprisingly, we see a drop in both impressions and clicks in travel advertising since COVID-19 began to have a more serious impact on daily life in North America.
Compared to the same time period in 2019, clicks and impressions should be rising as consumers book their spring break vacations. Instead, in March 2020 ad spend cratered, dropping by 74%.
In April, median impressions and clicks almost dropped to zero. Ad spend has continued its nosedive, dropping by 95% YoY. CPC is rising while CTR going down slightly.
Some reports do not expect a full recovery for years. But we get an idea of how that could begin happening sooner rather than later by looking at Singapore where COVID-19 cases are beginning to stabilize. There, as social distancing requirements lift, there has been an increase in domestic bookings. Experts predict the same is likely to happen in North America down the line, with an increase in domestic road trips and staycations.
COVID-19 has slowed both car sales and manufacturing in the US. As few in the industry are yet to shift over to a digital retailing strategy, showroom visits are still a must for most dealers. So social distancing is absolutely taking its toll.
But the automotive industry is a strong and resilient one. Already, we are seeing pivots towards payment plans better suited for the COVID-19 economic reality. And NADA was successful at lobbying the Trump administration to classify automotive services as essential because of their role in ensuring mobility for frontline workers and the general public.
For a deeper analysis of the impact of COVID-19 on the automotive industry, check out this article.
For our purposes, we’ll focus on how the automotive industry is reacting on the digital advertising front. The automotive industry comprises both auto dealerships and related industries like automotive rentals, parts, and repairs. Thus, our analysis is broken down into:
- Luxury Dealerships
- Mass Market Dealerships
Of those verticals, the ones that have been most negatively impacted by COVID-19 are the rental industry and dealerships.
Automotive repair and parts, also seem to be seeing some negative effects in terms of impressions, clicks, and CTR. But the drastic changes highlighted in the graphs may be attributed to the pausing of lower-performing accounts.
The car rental industry has seen a significant drop in both impressions and clicks. This mirrors what we see in the Leisure & Recreation and Travel & Tourism verticals where we noted an increase during the spring break period in 2019. Ad spend is also down for car rental businesses by 37%. On the other hand, CPC, and CTR remain stable.
For both luxury and mass-market dealerships, impressions have been slowly dropping since January, although the same trend was present in 2019 though less marked. So there may be a link to seasonality.
One notable difference is that from the beginning of March we began to see a more significant drop in clicks and impressions.
Ad spend has also been dropping across dealerships, but time will tell whether the trend will continue. We are not seeing a difference in ad spend or performance between luxury and mass-market dealerships and both are seeing an increase in CTR.
Local businesses lack the deep pockets of large corporations to have a financial buffer through COVID-19. Additionally, many rely substantially on foot traffic. Without a doubt, local advertisers have been one of the most seriously impacted, especially if they happen to fall into a category qualified as “non-essential” in government guidelines.
Luckily, both governments and large corporations are offering measures to support local business. Facebook and Google have both made ad credits available to small businesses. Plus, community organizations are stepping up to spread the word on the importance of supporting local business networks.
Times are tough, but opportunities exist. The businesses that continue to be smart in how they can maintain consumer interest will bounce back the fastest. With that said, let’s dive into some local PPC data.
Our analysis of local advertisers can be broken down into Retailers and Service Providers, which are then further broken down into subcategories:
- Electronics & Appliances
- Service Providers
Advertising seems to be continuing for some local businesses. Local retailers related to the home and electronics & appliances and local service providers both general and contractors have been stable. That being said, the CPC of electronics & appliances is slowly ramping up.
Median impressions, clicks, and ad spend have been steadily dropping for local hobby retailers compared to an increase in the same period last year. Local hobby retailers includes clothing stores, collectibles stores, pet stores and various businesses of that type.
Local grocery retailers are unsurprisingly seeing an increase in impressions and CPC. As restaurants struggle and people stock up their fridges and cook more of their own meals.
We’ll Be Updating This Page with the Latest Data
Without a crystal ball to predict what the next development in the pandemic will be and when things will stabilize, the next best thing is to keep a close eye on week-by-week industry shifts.
That’s why we’ll be updating this blog post with the latest vertical-specific developments in ad performance and spend. With this initiative we hope to support the digital advertising community in forming data-backed strategies.
Special thanks to Acquisio’s Lead Research Scientist, Tamas Frajka, for gathering the data, supporting our analysis, and generally being a mensch.
Featured image: Unsplash / Sylvia Yang
All graphics: Marie-Michelle Ouellet