Our internal data suggested that demand had begun an uneven rebound by mid-April, with varying impacts for different industries. According to one eMarketer analysis, even as the initial demand shock wore off, advertiser spend tracked well below YoY projections, leading CPMs to fall between 20% and 50%.

Get Ready for a Road Trip

While the pandemic (and subsequent economic fallout) initially materialized in just days, the consensus is that the road to recovery will be far more drawn out. The U.S. is in the midst of a piecemeal reopening, with certain counties and states already having pulled back restrictions while others remain on lockdown. Further, it is still unclear to what extent these policy changes will impact the behavior of the public – storefronts have begun to reopen, but it remains to be seen to what extent their customers will return.

Cruise Control Speed

In polling our account managers, we’re now seeing:

• 75% of accounts reported "better than normal" or "much better than normal" performance. This is up from 56% shared this time last month.
• 15% of accounts reported "worse than normal" performance. This is up slightly from the 12% reported this time last month.
• For those reporting “worse than normal” performance, the overwhelming majority are either coming off of a sale or experiencing continued struggles with fulfillment and out of stock issues.

Looking ahead, we should expect to see this incremental recovery reflected in digital advertising trends for Q2 and beyond. CPMs have already shown signs of a rebound, back to within 15% of their pre-COVID peak thanks to a resurgent May. Platform usage rates have remained high, which has boosted inventory and helped extend the discount on impressions even as advertisers scale back up. While demand trends have stabilized since bottoming out in late-March, we anticipate lower than normal demand at least through Q2 and possibly extending into H2 2020, while certain poorly positioned industries like travel remain on the decline for the foreseeable future.

Take the Scenic Route to Your Destination

While the long labor of recovery is still ahead of us, there are a few bright spots for opportunistic advertisers:

• Discounted CPMs make this an ideal time to invest in brand equity on social platforms.
• While consumers may still be hesitant to open their wallets, this is a unique chance to win mindshare and begin filling the top of the funnel.
• Unusually high usage rates also make this a great time to test into new channels. TikTok, in particular, comes to mind as a channel that has been especially ascendant amid social distancing. Better start learning those dances!

Have you been seeing similar trends in your industry or have any comments/questions about our observations? Let’s start the conversation!