The Standard Media Index (SMI) has recognized Amazon as the only major publisher in Canada to report ad revenue growth during COVID-19.
The company has experienced a year-over-year increase of 43 per cent. Moreover, in May and June, Amazon was the lone Top Ten media owner to actually grow ad revenue by eight per cent. All other media owners experienced a decline in ad revenue in June.
In June alone, Amazon saw an increase in revenue to nearly 25 per cent. The strength of Amazon can be attributed to the necessity of e-commerce during the pandemic and shifting consumer behaviours, according to SMI. All other media owners experienced a decline in ad revenue in June. Microsoft at -14 per cent and Jim Pattison Group at -69 per cent, experienced the largest drop.
“Not surprisingly, the vast majority of publishers have experienced significant decreases in revenues due to COVID-19. Bucking this trend was Amazon and Pinterest, both actually reporting growth in June 2020, when compared to June 2019. Amazon had an increase in ad revenue from national brands of +24 per cent and Pinterest had more than doubled their revenues, albeit off a low base. With shopping behaviour shifting from in-store to online, these results aren’t too surprising,” James Fennessy, global chief executive officer of SMI, stated in a recent press release.
Moreover, the technology category is the only product category that experienced growth in ad spend in June, SMI’s data suggests.
Technology, which includes telecommunication, consumer electronics, and software and internet products experienced a year-over-year increase of five per cent in June.
In Canada alone, the advertising industry makes up CAD$14.7 billion dollars in annual ad revenue, according to Statista. However, as a result of the many complexities and uncertainties being caused by the ongoing pandemic, many brands in the country and around the world have been forced to pivot millions of dollars in allocated advertising spend. Brands, agencies, and publishers found themselves quickly shifting content and programming in significant ways.
“This global pandemic is having an impact on advertising markets which is far more severe than what we ever reported during the 2008/9 global financial crisis when the size of the year-on-year declines being reported each month never reached more than 16%,’’ James Fennessy, global chief executive officer of SMI, said in a separate report. “So this has been an unfortunately unique experience given the sheer size of the ad spend declines being reported. The fact the average decline is an extraordinary 28.2 per cent really highlights the level of devastation wrought on some of the media markets where we track ad spend.’’
SMI also revealed earlier last month that digital media is seeing the strongest recovery month-over-month in Canada as lockdown measures across the country start to lift.
Digital media seeing some upward momentum, but recover remains slow
“Over the past three months, we have seen the enormous impact COVID-19 has had across most facets of our lives. For the media and advertising industry specifically, we saw media investment in April drop to less than half of last year’s,” said Fennessy. “Although, in May, we began to see some slight recovery in the market, not surprisingly, Television and Out of Home continue to struggle, with the suspension of sports programming and live events. Digital is the one area that has shown early signs of picking up, which we expect to accelerate in the coming months. E-commerce has helped to fuel this pick up in Digital, as more shoppers shifted to online purchases. We will be keeping a close eye on trending across media type and category in the coming weeks and months as we look to help all players in the Canadian media ecosystem understand where the best opportunities for growth lie.”