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
When does the expanded COVID-19 unemployment insurance run out?
The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.
Which states are reopening?
Many states have started to relax the restrictions put in place in order to slow the spread of COVID-19. Although social-distancing measures still hold virtually everywhere in the country, more than half of states have started to phase out stay-at-home orders and phase in business reopenings. Others, like New York, are on slower timelines.
Is it worth applying for a job right now?
It never hurts to look, but as unemployment reaches levels last seen during the Great Depression and most available jobs are in places that carry risks like the supermarket or warehouses, it isn’t a bad idea to sit tight either, if you can.
You can find answers to more questions here.
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