Big brands are telling TV networks they might not be buying as many ads as planned
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It’s hard to buy TV advertising if you don’t know if the sporting events will happen or the shows can actually be made.
Some prominent brands are reportedly cutting back on some of the advertising they had promised to buy on TV networks. The Wall Street Journal is mentioning names like Pepsi and General Motors among the companies that are saying, essentially, “Yeah, not as much as we had first signed up for.”
It’s about the inability to predict the future in this COVID-19 economy. We’re stuck at home with more time to watch TV than planned, so it’s not an audience thing. Instead, it’s that advertisers are having their own troubles and want to cut costs.
“There’s very little visibility right now, of course, not only for their own businesses — they don’t know how they’re going to be operating in a couple of months, so they’re looking to cut costs,” said Jeanine Poggi, a senior editor at Ad Age who is also seeing signs of a pullback in ad spending. “But then also from the TV perspective: Yes, absolutely, people are at home. They’re watching more content than ever, but come the fall, it’s unclear right now what content will even be able to be produced.”
Poggi also points out there’s a huge gap in the TV ecosystem with no live sports.
Can advertisers just do this, though? Say, “Sorry, we were committed to this, but now we’re not going to pay you as much”?
Poggi says yes, there is some flexibility in these ad deals. “Companies have the option to cancel up to 50% of their third-quarter ad spending, and that sort of went into effect — May 1 was the first time that they could pull out of some of these commitments,” she said.
It could be as much as $1.5 billion in advertising that is pulled back, The Wall Street Journal reports.
Click the audio player above to hear the full interview.
COVID-19 Economy FAQs
New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?
Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
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