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The Reported Side Effects of Coronavirus on the Ad Industry

November 30, 2023

March 9, 2020

Written By:

Parker Weber

"Its not wether you get knocked down"

Name

If you could be anyone you wanted to be, who would you be? How exciting is it to think that you could start a new chapter in your life in a whole new world? Without the limitations of the physical world and human constructs that have been created around you?

Well that’s where the Metaverse comes in. There are whole new worlds being created out there that will remove the physical limitations of life and allow you to chase your dreams and be who you want to be.

Sounds pretty exciting right? Let’s dig in a little more to understand what this might look like.

SO, WHAT IS THE METAVERSE?

Simply put, the Metaverse is the convergence of all the digital things you do online into one virtual experience.

In a sense, it already exists. We sit on Zoom calls, research on the web, talk on social media, buy things on Amazon, watch streaming events and online video, and play games. The Metaverse is already here.

But think of tying all of it together and removing some of the limitations that still exist in your physical life when you access the web.

But how is this all of the sudden now possible?

When I told my parents I was going to major in digital art, my decision was met with echoing questions:

“What even is that?”

“How are you going to make a living?”

Now 10 years out of college and as the Senior Digital Art Director at Karsh Hagan, I understand that these questions aren’t far from what we hear from prospects and clients on a daily basis.

“What is digital art, and how can it help our brand’s advertising strategy?” Let’s start from the top.

What is Digital Art?

Digital art is an artistic work or practice that uses digital technology as part of the creative or presentation process.

Digital art is all around us. It’s everywhere we look. From movies like Pixar’s ‘Toy Story’ to apps like Instagram, digital art has introduced modes of storytelling that were once impossible, making it a valuable and limitless tool for advertising.

Why is Digital Art a Successful Marketing Tactic?

Now, more than ever, we’re a visually driven society. It’s no coincidence that we’re naturally drawn to images, when you consider that 90% of the information processed by the brain is visual, and that our brain processes images 60,000 times faster than text. The brain’s preference for images even impacts how memory is formed as 80% of people remember what they see, compared to 20 percent of what they read. That makes digital art an especially important tactic for brands looking to create a campaign that’s as efficient as it is impactful.

What is the Difference Between Digital Art and Traditional Art?

When it comes to advertising, the difference between digital art and traditional art is simple. There are no gatekeepers. Anyone with a phone in their pocket and a little bit of creativity can create and share their art. Unlike the billboards or magazines of the past, online apps allow artists to instantly publish their work for free for all to see.

The success of digital art within that context comes down to ROI. Delivering the highest return on your investment requires the ability to measure, analyze, and adapt your strategy – it requires the ability to learn. Digital art is iterative and efficient – allowing us to easily track engagement rates that let us fail fast, tweak, and refine. We can then use that information to employ data-proven digital art across all marketing channels, ultimately delivering a product that best serves your brand and your audience.

How You Can Use Digital Art In Brand Advertising

At Karsh Hagan, we have used our understanding to create beautiful and effective marketing campaigns for our clients. For VISIT DENVER we created an immersive world that targeted convention planners all over the country. We created three unique videos, using 2.5D animation. These videos were seen by over 462,610 people and counting! Check out the work here:

At Karsh Hagan, we have used our understanding to create beautiful and effective marketing campaigns for our clients. For VISIT DENVER we created an immersive world that targeted convention planners all over the country. We created three unique videos, using 2.5D animation. These videos were seen by over 462,610 people and counting! Check out the work here:

WHAT WE KNOW: THE GOOD, THE BAD, AND THE UGLY

The good: Clorox, Lysol, and Purell are in high demand, short supply, and so their shares are on the rise. Good for P&G, Reckitt Benckiser, and Pfizer.

The bad: Elsewhere, in the non-disinfectant product sectors, many industries are already seeing declines, which have contributed to the stock market’s recent slide. According to Vox’s Matthew Yglesias, “COVID-19 doesn’t have to get significantly worse in the US to impede the economy. If people start going out less or if the government encourages ‘social distancing’ to reduce the likelihood of an outbreak, that’s going to hurt companies across many sectors”—from travel and tourism, to entertainment, to the alcohol industry. Not to mention the yet-unrealized effects on the global supply chain that could impact many consumer packaged goods.

The ugly: Recent “social distancing” policy has already begun to make a major impact on industry gatherings, cultural events, festivals, conferences, and subsequently many local economies who rely on those events to drive spending. With the cancellation of SXSW announced on Friday, the event organizers issued a press release stating "The 2019 event delivered the greatest economic impact to Austin, Texas's business and residents in its 33-year history. SXSW's 2019 impact on the Austin economy totaled $335.9 million."

WHAT WE DON’T KNOW: HOW MUCH, HOW LONG

For how long and to what extent will the viral threat continue domestically and abroad? For how long will it dominate the 24-hour news cycle, social media, and dinner conversations?

According to a new analysis of 62 marketing and media categories from The Myers Report, coronavirus fears could potentially reduce total U.S. 2020 marketing communications investments by anywhere from $1 billion to $11 billion. On the high side, an $11 billion marketing reduction would equate to approximately a $3.1 billion reduction in media spend nationally.

WHAT WE PREDICT: SOME UNEXPECTED WINNERS

Beneficiaries of the shift in media investments, The Myers Report says, will be broadcast network television (excluding potential Olympics and major event losses), local newspaper advertising, content marketing, and public relations. As people opt to isolate in the safety of their own homes, media channels that serve the “homebody economy,” will thrive. While the broader market is tumbling, stocks for the homebody economy—which include the video-conferencing service Zoom, the fitness equipment maker Peloton, and technology companies like Netflix and Amazon—are rising, as reported by Yahoo Finance.

According to AdWeek, the consensus from TV ad-sales professionals contacted by the publication was a combination of optimism—fueled by a belief that a rating increase between the 2020 elections and coronavirus coverage should translate to an increase in ad revenue—and “it’s too early to tell.”

The TV industry traditionally sees rating spikes when major events like bad weather keep people indoors for extended periods, but those could be less noticeable now as TV viewing has become so fragmented. “I think we’ll see an increase in time spent with video, but that will happen across live, delayed, VOD and streaming, so the impact will be tough to measure solely by Nielsen ratings,” said David Campanelli, co-chief investment officer of Horizon Media.

Still, “any time people are at home, there’s a chance their video consumption is going to go up,” said Steve Nason, a research director at Parks Associates, a firm that specializes in entertainment and content services. “So in a way, it could actually boost viewership numbers for a lot of these companies, a lot of these video-on-demand services or even services like Xumo or Pluto that lend themselves to continuous play.”

THE BOTTOM LINE

The coronavirus picture changes day by day, hour by hour. It’s developing at a rapid pace and it can be a full-time job to stay on top of the latest news. There are still many unknowns, most of all, how widespread COVID-19 infection will be, what government response will look like, and for how long the virus will continue to be viewed as a major threat. But, we believe, when it does pass (and it will), people will emerge from their homes with a desire to experience life... and spend money on things other than hand sanitizer and toilet paper.

For our clients—across a diverse group of industries—we are recommending a measured, prudent response that in most cases, means that we stay-the-course. For the past 43 years, Karsh Hagan has supported and led our clients from travel and tourism, healthcare, financial, and retail sectors, among others, through natural disasters and financial challenges. And we will continue to lend our expertise to adjust to this particular situation. We will keep you informed as we learn more and remain committed to helping all of our clients get through this uncertain time. Of course, we share in the concerns about the impact of the virus but we will keep doing what we do best: providing data-based recommendations and strategies.

Sources: AdWeek, Vox, MediaVillage, Digiday, Skift
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