For advertising, 2020 was a year full of difficulties and trials. The world economy has become unpredictable due to the coronavirus epidemic. The problems caused by the epidemic in Armenia were compounded by the aftermath of the Second Artsakh War.
Last year, quite a small amount of money entered the advertising market, many companies reduced their money due to the coronavirus epidemic, which gives experts hope that the money will be transferred and spent in 2021.
We summed up the 2020 advertising market with the media director of “Media Systems” advertising company, Yana Yanikyan, to talk about the challenges expected in the future.
Advertising market trends in 2020 point by point
- The impact of Covid-19 on the advertising market was gradual. It seemed that the crisis was over in the summer months, then the second stage began, which continues today.
- Extreme unpredictability has affected the market more than the fact that the coronavirus itself. Businesses did not know how to react to the situation, there were expectant moods in many branches of economic activity.
- Advertising companies in Armenia quickly adapted to the situation by offering mobile solutions to their customers.
- Much of the advertising money went to social media as there was a need for effective advertising in the market with little money. The money spent on the Internet has not even been estimated yet.
- Many banners have been preserved in outdoor advertising, as in the current situation, their dismantling them would be too expensive and it is not urgent for the agency operating them.
- Some TV and radio commercials have been retained, mainly at the expense of flexible discounts.
- The Artsakh war affected all directions of the economy. And if in the case of Covid-19 it was possible to work with special solutions, then in the days of the war most of the advertisers completely stopped the promotion of goods and services.
- The new post-war reality has changed the behavior of people and companies. They think there is no need to have advertising, even though there are already companies that feel the result that not advertising is having on their sales.
- Advertising investments of international companies are concerning at the moment. The situation in Armenia is doubly complicated and there is a fear that those investments will not be justified.
- There were several legislative changes in 2020, which seriously affected the volume of advertising. As a result of gambling and anti-tobacco laws, traditional platforms, such as television and radio, as well as outdoor advertising, suffered particularly badly.
- At the end of the year, currency fluctuations began to affect the already weakened market. Local organizations place advertisements in foreign currency on social networks. To avoid price increases, companies do not increase prices to keep customers, but they cannot work at a loss for a long time in the conditions of such fluctuations.
- Despite the problems, all these shifts have made the market more flexible. Individual work with clients was done during the coronavirus and in many cases, mutually beneficial solutions were found.
- In the conditions of falling demand, the companies providing advertising services started working on a quality offer, offering several products at the same time.
- In terms of saving resources, it became a goal to spend each dram on a specific target. New technical tools were used, successfully enabling double contact.
- Television had the biggest losses. During the war, they removed entertaining and comedy programs from their list, and advertising mainly works successfully in those programs. They had losses for several months, the situation is still worrying.
- There were also problems with the new season, which was supposed to start in September. The war changed the nature of the programs.
- The online field remained mostly stable, with no major financial losses. The technical solutions were evolving very quickly, which contributed to the successful start of solutions. Constant innovation in this platform always helps to interest, motivate and surprise businesses.
What is the forecast for 2021?
Due to the situation at the end of the year, a difficult period is expected for the first quarter of 2021. After the second half of the year, there will be a gradual stabilization, and starting from the third quarter, all the opportunities missed in 2020 will begin to be realized. This being true if any new force majeure situations are not created.
The companies will bring their saved money to the field, which will activate the market.
In general, 2021 will be a year of depletion of resources. Only if the quality of the offer should be improved.
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