Finding Some Oases Amid Ad Drought

The advertising gods giveth, and they taketh away, particularly these days.

Take the case of Elizabeth Michael, the Little Rock marketing communications pro and co-owner of the Bark Bar.

She works for cannabis companies, which have been euphoric over sales during the coronavirus pandemic, and for the hospitality industry, which the virus eviscerated.

“One set [restaurants, bars and hotels] is constantly changing to meet regulations and safely open, and the other set is ‘essential’ and posting record sales,” said Michael, whose Bud Agency, serving the medical marijuana space, is a partnership with Martin Thoma of Thoma Thoma. “It’s been a roller coaster.”

Her parents own Paul Michael Co., the furnishings powerhouse in Lake Village, and her husband, Dan Roda, is co-founder and CEO of Abaca, which offers financial services to the cannabis industry.

One of Michael’s hospitality clients is another Roda investment, the $25 million, 114-room AC Hotel in downtown Little Rock.

“Our clients have mostly switched to digital, but we had some that used radio and billboards in creative ways,” Michael said, speaking of media trends. “Also, many radio shows are streamed now and the stations do a good job of incorporating ads into their digital presence.”

Myron Jackson, CEO of The Design Group in Little Rock, also reported a mixed bag. “Our public health work obviously has increased, so we’ve benefited, unfortunately, on the need to educate the public about COVID-19,” said Jackson, whose agency has been working with the Arkansas Department of Health on outreach messaging. “Some of our other industries have pretty much flatlined. We’ve been in a marginally safe space because of the diversity in our client portfolio. It has allowed us to survive.”

It has been a difficult few months for advertising, with ad revenue off 40% and more at the Arkansas Democrat-Gazette during the spring and early summer, according to Publisher Walter Hussman Jr. National TV ad sales this year are projected to be down 15% despite an unprecedented $5 billion in spending for the presidential election, a 24% increase from four years ago.

But since Arkansas isn’t a presidential battleground, Biden for President has spent only about $25,000 in the state so far, and the Trump campaign has laid out only about $60,000 here, according to Advertising Analytics LLC, which tracks political spending. The most contested down-ballot race, the 2nd District congressional battle between U.S. Rep. French Hill, a Republican, and state Sen. Joyce Elliott, a Democrat, has seen far more spending. The challenger, who had spent less than $50,000 total on advertising through June, had ad buys of $22,343 in July and $216,358 in August, Advertising Analytics told Arkansas Business. Hill slated $114,662 for ads in August, $243,000 in September and a whopping $346,643 in October.

Bloomberg Intelligence reported last week that domestic TV ad sales are projected to fall by $14 billion, or 23%, by 2024, as cable subscribers continue to cut the cord and streaming video sets usage records. New consumer research from Parks Associates of Dallas found that just 62% of U.S. broadband households now get traditional pay TV through cable or satellite providers, down from nearly 70% in the first quarter of 2019. This cord-cutting shift coincides with record use of streaming video as more pay-TV offerings shift online.

Meanwhile, commercial and public radio have seen audiences shrink as commuters who listened in their cars started staying home and tuning out.

Pam Jones of Culturally Connected Communications in Little Rock put it simply: “If you’re going to advertise and you don’t have a big budget, social media is the way to go.” As for her own shop, she said lean operations are paying off. “I’ve always been frugal, and that’s helped us endure.”

Jones said broadcast advertising is challenged now, and “not just because companies don’t have the money to conduct big-budget, paid media campaigns like they used to.” It’s hard to even film TV commercials now because of COVID.

“I mean, with all the stipulations and the fear and the social distancing, these companies are having to be creative,” Jones said.

So what’s the next big thing?

“With everyone sitting at home and streaming, something very huge and cool happened,” Michael said. “Hulu rolled out a self-service platform that means pretty much anyone can place an ad” on the streaming service. “The previous minimum was $50,000 and now it’s $500.

“As long as you can get an ad put together, you should be able to get in front of Hulu streamers, and that’s an exciting possibility.”