Initial projections show a US$26 billion drop in advertising

Initial projections handled by analysts in the US forecast a US$26 billion loss or drop in the income, equivalent to 10.6%, said Julio Rumbaut, a media company advisor. “But, as we have seen with the unemployment figures, estimates come short,” he added.

Rumbaut feels the main effect is in the decrease in ad income. “Any business that is closed or has lost most of its
clientele, as no benefit advertising. So retailers, agencies and automotive plants, entertainment establishments, restaurants, actually, any business, product, and service that consumers have ceased to sponsor. This is the case with local, national, and global advertisers. The income of the few companies that have invested in institutional image ads or those who can increase their business due to the virus and the quarantine, for example, companies that deliver food, liquor, among others, do not compensate for the huge loss”.

He highlights that getting used to remote work “and/or with more efficiency” will lead to change in the way we work. “Moreover, investments in salary payrolls may well go down thanks to being able to operate in a different reality. Therefore, many companies will see the opportunity to cut down their expenses”.

He comments that the need to inform and entertain as a public service and to maintain their audiences, brands, and media identity, forces these companies to be more obliged to maintain expenses. “Those media that don`t have a cash reserve or access to credit will probably disappear, and more so if this continues for several months,” sentenced Rumbaut.