We’re now in our fourth month of lockdown, and many media owners are starting to report that spend is beginning to pick up and markets are firming up again. But is this really the case or are they just talking the market up? To make sure for ourselves, we’ve done some digging around in the Nielsen market data to see how the numbers match the rhetoric.
If we start with the overall spend across newspapers, we’ve compared the monthly changes against a starting point of January. Clearly, there was a good start to the year, with spends increasing in February and up year-on-year (YoY).
However, the first signs of a slowdown started in March, where instead of the expected increase, that we saw last year, advertisers began to worry about the effects of coronavirus and started to hold back on spend. April was when it really hit, with revenue down 40% versus March and down 46% YoY.
But by May, this rapid decline started to slow, and we saw better than normal increases with spend up 15% against April. However, to put that into context, despite May and June seeing a positive uplift in spend, this is still down considerably YoY and equates to roughly £25m a month being lost.
Looking at the numbers, as it did for everyone, they took a big hit in April, down 50% against March. But May saw a much faster improvement (up 55% month-on-month) while June has seen a further increase, so much so that it’s almost back to where it was in March, only down about £1m across all papers. Ironically, in a tough market for press, the start of the year had been very good for the papers, maintaining flat YoY spends. However, as the months ticked over it seems to have settled around 40% down, or £5m a month.
Looking at these numbers, it’s fair to say that classified has had a relatively reasonable time of it and that as other spend increases elsewhere that are indeed being squeezed. As such, they will likely be pushing to move away from the super cheap deals that have been available recently, so for clients we are looking to lock down any deals quickly, especially if you can get them to run over a longer period.
Turning to the much larger display sector, we see a similar picture forming. Overall, Q2 is down 34% on Q1, but as with classified, there are now signs of growth, albeit at slower rates. However, this drop translates to on average £15m a month, which puts a significant dent in the paper’s revenues.
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