Online sales and pre-orders are booming during the coronavirus pandemic. How can that be?
Demand for advertising is down.
For many companies, COVID-19 is causing a sense of universal uncertainty, even panic. A lot of information is being dished out, and much of it is contradictory. As a result, many companies are holding off launching new products that have been in the pipeline.
Production runs have been thrown off schedule. While some companies continue to receive inventory, many supply chains have been disrupted, resulting in a lack of inventory available for sale. Without inventory to sell, some companies are pulling back on advertising spend.
Some product categories, such as automotive or travel-related products are experiencing steep declines in sales and are pulling back on advertising spend as a result.
Supply of advertising impressions is up.
People are inside much more than is usual for this time of year, and on average, when people are indoors more, they spend more time online. More time online = more online sales. This is predictable, as we see this annually during the winter months when colder weather and shorter increase the likelihood of people staying indoors.
Indiegogo recently reported that traffic is up 14% year over year, and daily funds raised in March is up 24% over last year.
Our friends over at Kickstarter have noted that “no significant drop in campaign support” and that “Backers have been understanding and supportive” for campaigns that communicate regularly.
Demand for advertising is down, supply is up, and therefore the average cost per click is down.
Throughout March and April, some of our largest eCommerce clients are enjoying returns on advertising investment several times better than what we would expect during a normal March or April.