A veteran digital advertising executive has predicted that the coronavirus pandemic will devastate ad spending this year more severely than the 2008 financial crisis or the recession following 9/11.
Tim Armstrong, a former AOL CEO, said that despite record engagement in content as more people are glued to their TVs and streaming online as the coronavirus outbreak keeps them indoors, he expects advertising spend to slump.
“For the first time in history, you’re probably going to have the highest point of media usage in the history of the United States and the lowest point of advertising in the U.S.,” Armstrong told The Information.
The coronavirus pandemic has caused a decline in advertising rates since the start of the year but not as negative as initially anticipated by ad rate tracking site Ezoic.
“I think the shock wave that has hit advertising is broad and is deep. The latest thing I saw was that people are expecting a 30 to 40 percent drop in advertising overall,” he said in an interview with The Information.
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“The large-scale digital players, most obviously the FANG companies [Facebook, Amazon, Google] are going to benefit greatly from this. There will be a faster replacement cycle for brands that were probably declining.”