TV commercials have long been the surest bet on Madison Avenue. Suddenly, they’re looking more like a risky gambit.
One ad recently making the rounds in these uncertain days of coronavirus was a spot from Mint Mobile, a wireless carrier that aims for young customers and is partially owned by actor Ryan Reynolds. The commercial, viewed on CNN last week, showed people at a party eating from a bowl of dip with their bare hands, and then feeding it to each other the same way. At a time when officials are calling for social distancing, that hardly seems like the kind of behavior to show on television.
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“We understand the sensitivities and already asked all networks to pull [the spot] from their logs,” the company said in a statement. “Unfortunately, the traffic instructions weren’t executed as quickly as normal, given so many people now working from home.” A person familiar with the matter says the ad sales team at CNN parent WarnerMedia never heard from Mint Mobile representatives, and instead reached out to the company’s media agency after being contacted by Variety.
The nation’s biggest ad spenders have muscled through tough times like 9/11 and the recession of 2008-09. But the coronavirus pandemic has sparked a level of confusion the likes of which the media industry has never seen. Some advertisers are unsure whether their commercials, created not that long ago, suit the tone of the times. Others are seeing their lines of business crumble and need to yank their spots out of rotation. And perhaps most important, many who have invested millions to sponsor some of the most-watched sports events of the year — including the 2020 Tokyo Olympics, postponed on March 24 until 2021 — are left scrambling to figure out what they ought to do.
The inability to know what events might take place “is the biggest issue right now and it’s the big unknown,” says Catherine Sullivan, chief investment officer at Omnicom Media Group North America, one of the nation’s largest media buying firms. “That unknown is wreaking havoc, and it has a cascading impact on the rest of the marketplace.”
Oddly enough, the pandemic has given rise to conditions that might make it just the right time for some companies to get in front of consumers. Linear TV viewing is growing, with kids programs and cable news among the beneficiaries, along with primetime broadcast.
And so, some advertisers are jumping into the fray with commercials meant to reassure. Toyota has launched a spot that tells viewers, “We are here for you — now and in all the better days ahead.” Ford is telling consumers that its vehicles are “built to lend a hand.” Verizon has ads that say: “We’re here. And we are ready.” But others have spots that seem counterintuitive to the nation’s crisis. Progressive, for instance, is running commercials that show spokeswoman Flo in a singles bar with a friend who talks about insurance to would-be suitors.
“I think every marketer could take a lesson from Ford,” says Brian Sheehan, a professor of advertising at the SI Newhouse School of Public Communications at Syracuse University. “Other brands would be wise to follow.”
Not all of them can. Travel marketers are hard-pressed to keep commercials on the air urging consumers to book a flight or a hotel room; automakers, movie studios, retailers and restaurants may have little reason to lob ads at audiences when showrooms, theaters, stores and fast-food joints have been forced to close. Television networks have asked sponsors to consider running ads in other programs, or to consider pushing back the time frame when commercials air, according to media buyers. But they are also accepting order cancellations. “They will discuss all options, and full relief is one that we’re getting,” says one buyer.
What’s more, advertisers have fewer solid places to put their pitches. Live sports are off the grid for the time being, and delivering the same audience to a client that they might have snared with a March Madness basketball game is well nigh impossible. “There’s nothing that can replace the NCAA championships in terms of viewership,” says one buying executive. “You can’t really take your entire schedule and move it into a repeat of ‘Blue Bloods.’” Meanwhile, TV late-night shows have shut down production and are trying to keep things going with lo-fi efforts often created by the hosts as they hunker down at home.
There’s also some paralysis. Advertisers who have committed to the NBA Finals or the Summer Olympics could certainly change their plans. But doing so would mean having to renegotiate all over if they want to get back into those events when they become more definite — most likely at a new, higher price. “It’s a big puzzle,” says a media buyer.
At A+E Networks, executive vice president of ad sales Peter Olsen says his team is aiming for flexibility. “We are trying to take this two weeks at a time and be very accommodating for those categories that are feeling the most challenged right now,” he says. But he worries about the number of clients who can take money out now and come back later. “There are challenges,” he says. “You can’t take six months of inventory and shove it into four months.”
The pandemic hit just weeks before the industry was slated to start its annual upfront sales market, when U.S. TV networks try to sell the bulk of their ad inventory for the coming cycle. In 2019, the five English-language broadcast networks secured between $9.6 billion and $10.8 billion in ad commitments for primetime, according to Variety estimates — the fourth consecutive year the networks saw increasing volume for their primetime schedules.
If they match such levels this year, it would be quite an accomplishment. “Given the current situation, we’re now waiting to see how upfronts will be managed,” says Melissa Grady, the chief marketing officer of General Motors’ Cadillac. “We are staying flexible.”
All the networks canceled the glitzy booze- and sushi-filled parties they hold in May to celebrate the release of their coming programs. In their place will be showcases beamed out via streamed video. There’s growing concern, however, that the pandemic has pushed back TV production so much that the networks will have little to trumpet. “This is not my call, but anyone over the next six to eight weeks is going to find it very difficult to go into an upfront,” says Olsen. “Let’s get through the next three or four months and then deal with business.”
Any TV network that can offer some news about a programming favorite — a “This Is Us” or a “Walking Dead” — might find some short-term benefit, suggests John Hodulik, a media analyst with UBS. “Delayed production of new shows and movies is likely to impact the availability of new content for the general entertainment networks in coming quarters,” he wrote in a recent research note. “Ad inventory with large audiences is likely to be in short supply without live sports. This could drive pricing growth for broadcasters with marquee programs.”
Madison Avenue may want to latch on to what it can. “The entire advertising community is looking for some sort of better understanding of where we are going,” says Omnicom’s Sullivan. “If the networks are able to tell a story, I think they should.”
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