Houlihan Lokey is pleased to present an assessment of the impact of COVID-19 on the local media marketing industry.

Substantial disruption to business operations has occurred across all sectors of the economy, including the local media marketing industry. The general outlook of the local media marketing industry is varied, and uncertainty is likely to persist until the duration and overall impact of COVID-19 can be determined. However, there are key trends in the space that warrant attention:

1. The importance of SMBs to the U.S. economy, employment, and large advertising platforms has been clearly evidenced by the significant monetary support offered by the federal government and private businesses, such as Google. With the passage of an additional $484 billion of support, the federal government has made $766 billion available to small businesses, the vast majority of which is likely to be forgiven. Further, Google is providing $340 million of ad credits to SMBs worldwide while Facebook has offered $100 million in cash grants and ad credits to SMBs.
   
   

2. The COVID-19 pandemic is likely to accelerate the shift from traditional mediums to digital channels as local businesses seek to stay in touch with consumers who are staying home, either as a result of stay-at-home measures or out of caution. Despite significant increases in media consumption, this has been to the benefit of digital channels as traditional channels such as OOH are distinctly impacted from the lack of consumer interaction while linear television is increasingly losing out to OTT and a spate of streaming services, particularly as live sports have been canceled or indefinitely postponed.
   
   

3. The dramatic change in local businesses’ operating environment provides an opportunity for SMBs to build or improve their online presence and map out advertising strategies. As business slows for most local companies, business owners have a resource that is usually not afforded to them: time. A lack of time and resources is one of the primary reasons SMBs let marketing fall by the wayside, so the current pandemic offers a rare opportunity to focus on such “secondary” tasks.

At this point, it is impossible for us to predict how long the outbreak and shutdown will last, as well as the lingering effects on businesses, the economy, and the credit and M&A markets. While it is beginning to look like the pandemic is slowing and conditions are improving, we will continue to monitor this rapidly evolving situation and its impact on the local media marketing industry. We look forward to staying in touch with you.