Media and advertising share prices have continued to plummet over the weekend as countries around the world have tightened the measures they’re taking to help slow the spread of COVID-19. Whilst uncertainty prevails and it remains unclear how long social distancing measures and border closures will last, it’s becoming increasingly clear that almost all sectors of the global economy will be severely affected.
There is a fear that media and advertising companies can find themselves particularly exposed in these difficult times, as advertisers pull back ad spend in an effort to shore up their own finances. There are also many who point to increased TV and online media consumption and it seems likely that many brands will be seeking to drive ecommerce sales, which might help to offset at least some of the losses. Here’s how the various sectors have been affected in the past few days:
Agency Holding Groups
The agency holding groups, already facing numerous challenges to their business models, have been hit hard by coronavirus, as clients pull back ad spend, and business becomes more difficult to conduct due to travel restrictions. WPP and Omnicom have both started to allow staff to work from home globally, while others have begun conducting more business remotely and restricting non-essential travel.
All of the ‘big four’ holding groups (WPP, Omnicom, IPG and Publicis Groupe) have seen their share price slide as the virus has spread, but they had mixed fortunes over the weekend. WPP and Publicis Groupe both fell over the weekend (down 12 percent and 16 percent respectively since the start of Friday), while Omincom and IPG both rallied – Omnicom is up by nearly six percent since the start of Friday, while IPG is up by five percent.
Big Tech Companies
The likes of Google, Facebook and Amazon, with their sprawling businesses, have faced a mix of impacts from the spread of COVID-19. Any decline in ad spend will hurt all three (though Amazon less so than the other too, since advertising is a smaller part of its business). But at the same time, with more people stuck indoors, each stands to potentially benefit from consumers spending more time online, on their platforms.
The overall picture has been negative though, with all three having seen their share price fall substantially over the past month – Amazon is down by 17, Google is down by 20 percent, Facebook is down by 30 percent. And while all three had seen upturns just before the weekend, all three fell when markets opened. Amazon and Google are down seven percent since Friday morning, while Facebook has fallen by over ten percent.
Broadcasters and Publishers
Like the big tech companies, TV broadcasters and publishers are likely to see users spend more time on their channels and websites as they’re stuck indoors, but will find it harder to monetise these audiences as advertisers reign in their spending. ITV said earlier this month that it’s seeing ad revenues impacted by coronavirus, and its share price continued to fall this weekend, down 15 percent since Friday morning. Other broadcasters around the world have similarly fallen – since Friday morning, at the time of writing ProSiebenSat.1 is down 17 percent, RTL Group is down eight percent, TF1 is down eleven percent, Atresmedia is down 13 percent, and Mediaset is down four percent.
Broadcasters reliant on sports will be hit particularly hard, as major sports leagues including the NBA, English Premier League, and UEFA Champions League have been temporarily halted. But for many of these, it’s hard to trace the impact of these suspension on their share price, since they sit within larger companies (ESPN for example is owned by Disney, while Sky is owned by Comcast).
Publishing groups have also seen themselves hit by the weekend’s developments. The Daily Mail & General Trust is down by over nine percent since Friday morning and News Corp is down by 4.5 percent.
Ad tech obviously finds itself very exposed to any cuts in ad spend, and ad tech companies have also seen their share prices fall after the weekend’s developments. The Trade Desk, for years one of the best performing public ad tech companies, is down 18 percent since Friday morning. French retargeting specialist Criteo meanwhile is down by over 11 percent, measurement company Nielsen is down by over six percent, Rubicon Project is down by over 18 percent and Telaria (soon to be merged with Rubicon) is down 21 percent.