Advertising Guest Columns
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Making sense of ads in uncertain times

OPINION

COVID-19 uncertainty has resulted in a muddled picture on what’s next for the digital media scape. Predictions that online giants such as Facebook may lose up to $44 billion in global ad revenue are at odds with reports of increased brand investment in social media campaigns. Meanwhile, marketers are split down the middle on the question of budgets; with 48% anticipating an imminent drop, and 46% expecting business to continue as usual. 

At the centre of this are digital publishers, grappling to make sense of how the confusion will translate for them.

Digital advertising spend usually follows movements in the wider economy. While this might seem like cold comfort in a volatile climate, this situation is slightly different to previous recent economic downturns, with a largely housebound public turning online for news and connection with the outside world. Monitoring ongoing fluctuations will give publishers a better idea of how to ride out these uncertain times and keep revenue on track. 

The digital publishing picture 

According to Comscore’s latest UK data, recent engagement with all content categories has soared in comparison to January 2020; especially news sites (+54%) and social media (+39%). This spike in time spent online is positive news for publishers; as consumers seek online information and entertainment. Big increases in gaming, esports and streaming services are already reflecting this, and many publishers can expect a jump in traffic and dwell time, as well as more desktop visits; speedy optimisation for larger screens will be a wise move. 

A closer look at ad spend 

Topline analysis of performance across the PubGalaxy platform shows that, although overall March 2020 did bring a fall in ad revenue — down 4.18% against February — this is similar to normal close of quarter dips that come as budget commitments end. 

While we could see more major changes later in Q2, the current advertising picture is mostly one of readjustment. Unsurprisingly, daily publisher ad revenue for sectors associated with outdoor activities and events is plunging, with ad spend in travel and tourism hardest hit, at 48% less in March. On the flip side, brands providing products that can be enjoyed at home — such as electronics and beauty items, and internet services — are ramping up their ad spend. 

The market is rebalancing itself to align with the new normal, and it’s likely there will be more buying loops ahead as the COVID-19 situation evolves. For publishers, success is going to depend on their ability to keep adapting their advertising offerings to meet shifting needs. 

Search for successes in supply and demand

Some channels, such as Google AdWords, perform well in times of crisis, likely because the platform works around results-based marketing and is viewed as a safer bet for maximising buyer returns. Smart publishers can harness this persistent appeal by fine-tuning their supply to match demand-side trends. For example, that may include revisiting technical features like ad refreshing for key ad placements to ensure they have access to such buyers. Or, with AdWords largely operating on a click-centric basis, it can also serve publishers well to track which ad types drive the best results over time and increase on-page availability.

Of course, there are important factors to bear in mind. Publishers must keep a close watch on how far ad space options are extended to ensure ad content is still suitable for pages and audiences. It’s also vital to keep close watch on viewability, as studies show that an ad needs to be viewable for an average of 14 seconds before actually being seen, and consequently, clicked on. But with buyers increasingly keen to make their spend go further, leveraging performance-focused platforms and exchanges will be a shrewder choice than sticking purely with your traditional cookie-cutter setup.

To drop or not?

In a bid to maintain competitiveness, revenue and fill rates amid COVID-19 strain, many publishers are slashing prices. But others tempted to follow in their footsteps should resist the urge. 

In the short-term, cutting price floors might fuel a marginal increase in yield. In the long-term, ad quality and publisher reputation will suffer. As costs drop dramatically, creative standards also plummet — with the gates open for poor quality and fraudulent ads — and association with bad ads can seriously harm audience relationships. Additionally, reductions in price don’t go unnoticed by ad buying algorithms; once they have detected that inventory is available for less, they will immediately adjust their bidding strategy accordingly. Trying to drive prices back up in future is usually much more difficult than dropping them because these adjustments won’t simply revert back once things settle down. 

Keeping up connections 

Direct deals offer buyers access to the choicest inventory, so it follows that they command a high price tag. When economic turbulence hits, however, their justifiably expensive nature tends to work against them; frequently the first advertiser cost to be considered for the axe. Generally, this is more of a concern for programmatic buyers than contractual partnerships, where buyers have agreed to fixed terms and a set time span. But it would be short-sighted to dismiss automated direct deals as a no-go for the COVID-19 duration. 

Publishers should be keeping up constant communication with advertisers to highlight the value of straight dealing and exploring opportunities to enhance partnerships; looking into how they can extend offerings, creating more affordable packages with limited inventory, and focusing on consistent performance optimisation to sustain existing bonds. 

It looks like concerns about the immediate effects of COVID-19 on digital media could be more nuanced than expected, the best current plan for publishers is using analysis to make sense of buyer needs, adapting supply for maximum appeal, and considering the long game. Whatever the temporary rewards of cutting prices or pausing partnerships, it’s unlikely they will be worth the future pain of rebuilding audience trust and re-educating algorithms on inventory value. Publishers that prioritise continuous quality and connections will be the ones that emerge strongest and ready to shine when the storm passes.

Ivan Ivanov
COO, PubGalaxy

About: PubGalaxy is a publisher-centric monetization platform that leverages the capabilities of the entire RTB ecosystem and traditional demand to help premium publishers drive consistent uplift in ad revenue, ensure superior ad quality and deliver exceptional user experience. Now with over 100 employees and offices in central Europe, London and New York, it is the trusted monetization partner to more than 100 of the world’s premium publishers including Dealmoon, Gsmarena, Fotor, Xda-developers, Programiz, Photopea, ChinaGate, Wccftech, and Fontsquirrel.

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