Economic uncertainty and inflation have affected digital advertising demand. A new report shares how EPC and CPM rates stand in comparison to previous years, and suggests strategies for publishers to maximize Q4 yield.
Global economic uncertainty continues to impact the demand for digital advertising, according to the Q3 Digital Advertising Insights report from Sovrn. The report, based on data from Sovrn Signal—a publisher data tool to capture viewability, CPM, engaged time, and click rates details the extent of the impact. It also features tips to help publishers maximize their Q4 yield.
Understanding how much buyers will pay for your ads or affiliate links — and how rates are affected by industry trends and economic factors — puts you in the driver’s seat.Sovrn
84% consumers say inflation has affected overall spending
Programmatic ad rates and earnings-per-click (EPC) from affiliate marketing channels were down globally across the board in Q3. CPMs in the US were down by 15-20% in Q3, while the decrease in UK CPMs was more pronounced, at just one-third of year-over-year revenues.
Affiliate conversion rates were down just over 25% compared to last year and a full 50% lower than in 2020. This was due to both inflation and consumers returning to brick-and-mortar stores after the worst of the pandemic was over.
84% of consumers say inflation has affected their overall spending, a 9% increase from three months ago, shoppers are buying less causing still lower year-over-year Q3 conversion rates.Q3 Digital Advertising Insights
“Usual patterns of seasonality”
Sovrn’s earlier Advertising Performance Benchmark report covering advertising performance through the last quarter of 2021 and the first half of 2022 showed a seasonal increase in CPMs towards the end of 2021. It highlighted a return to seasonality in CPM factors.
“CPM seems to have returned to the usual patterns of seasonality in the latter half of H1 2022 while still flatter overall than what we would expect to see,” it noted. “For the second half of 2022, there remains a significant amount of uncertainty impacting global ad spend, driven by macroeconomic concerns and a softening of consumer spending, plus lingering effects of the Covid-19 pandemic and the ongoing war in Ukraine.”
Looking ahead, Q3 Digital Advertising Insights report expects the usual inter-seasonal trends with demand peaking between late November through early December.
With ad spend rates down across programmatic and affiliate commerce, publishers need to optimize for visitor attention to capture every possible opportunity to drive revenue.Q3 Digital Advertising Insights
Start early to capture the best affiliate revenue opportunities
The report offers the following suggestions for publishers to maximize their Q4 yield:
- Optimize pricing strategy by understanding the factors buyers use to modify their bids for your inventory.
- Refrain from diluting ad quality by more units to the page, or employing aggressive refresh practices.
- Start early to capture the best affiliate revenue opportunities, that’s the first week of November. Retail sales achieved 25% YoY growth in the first week of November last year—the highest one-week growth of the entire shopping season.
- Focus on everyday items as they will be a better bet than niche or limited products.
- Keep testing new content strategies like varying link placement, use of real product photos, or content length to find what resonates most with consumers.
The full report can be downloaded from Sovrn:
Q3 Digital Advertising Insights
Disclosure: What’s New in Publishing is wholly owned by Sovrn Holdings, Inc.