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Originally published in What’s New in Publishing in November 2020. While some of the data points have evolved, the analysis and conclusion remain highly relevant.
In response to an initial coronavirus news bump, a number of outlets witnessed record traffic to their sites, as well as a growth in subscribers.
At the same time, however, they also had to contend with a major slump in advertising revenues as marketers shut their chequebooks.
This meant that despite some publishers benefiting from increased reader revenue, this income did not act as a like-for-like replacement for the revenue losses being felt from other income streams (such as advertising and events).
Moreover, as we shall see, the nature of modern-day advertising technology (Ad Tech) also further compounded the financial challenges that publishers were experiencing.
Here’s a quick overview of the key Ad Tech issues that publishers have had to contend with while navigating the COVID crisis, and seven potential solutions to them.
Challenge 1: Keyword Blacklisting
In March, BuzzFeed News’ Craig Silverman reported that Integral Ad Science, a digital ad verification company, had over 3,000 advertisers blocking the term “coronavirus.”
This double-whammy followed reduced ad spend in many categories, like travel, which had already hurt publishers’ revenue streams.
Moreover, as the team at Branded, a newsletter written by Claire Atkin (@catthekin) and Nandini Jammi (@nandoodles), reminded us:
“Blacklisting keywords without whitelisting legitimate news sites deprives news organizations of ad dollars. By doing this, we are keeping ads away from real eyeballs. Worse, where do those ads go? They are likely ending up on fake news sites that know to avoid the word “coronavirus.”
Research from IAB has reinforced this, finding that “news publishers are twice as likely to be blacklisted vs. others.”
“This extraordinary event is exposing how brand safety tech works — using stupid keyword lists — it is not happening more often, it is just more evident,” ad fraud researcher and consultant Augustine Fou told Digiday earlier this year.
“Previously it was not as visible how bad keyword blocking was for legit publishers,” he said.
Fou’s comments came in response to moves from some advertisers to ensure that their ads didn’t appear on websites mentioning “coronavirus.”
As a result of keyword blacklisting, publishers including Der Spiegel, the Guardian, The New York Times, The Wall Street Journal, as well as countless others, have all been impacted.
In the UK it is estimated that news publishers lost around £50m in online ad revenue between April and July due to this practice.
Challenge 2: Declining programmatic revenues
Globally, according to Zenith, more than two of every three display ad dollars are being spent programmatically, with the worldwide market for programmatic advertising predicted to be worth $98.2 billion (pre-COVID estimates) in 2020.
Put another way, around 68% of worldwide digital ad spend is now programmatic, up from 44% in 2015, a figure which rises in markets like the USA (84.5%) and the UK (88.9%).
COVID-19, however, has demonstrated some potential pitfalls for publishers who may be dependent on this advertising model.
In the United States, at least one major local news publisher witnessed sudden declines in per-view programmatic revenue as a result of the coronavirus and keyword blacklisting.
McClatchy’s Vice President of News Kristin Roberts told staff, in a memo to staff obtained by Axios, that “the money we get every time someone reads or watches an individual story (“programmatic” revenue) is declining, rapidly — that per-view rate of revenue has dropped more than 15% in a single week.”
It’s not easy to determine the impacts at other organisations, but other outlets may have seen similar numbers. Outside of the U.S., other markets and publishers have been similarly affected, but not necessarily to the same extent, given their reduced dependency on programmatic revenues.
As the President of the German Association for the Digital Economy (BVDW), Thomas Duhr, explains:
“One reason [for this] is that programmatic advertising is less advanced in Germany than in Anglo-American markets, thus the extent of automatic inclusion of brand safety technologies isn’t comparable yet.”
7 ways publishers responded to these challenges
In response to these twin challenges of reduced programmatic revenue and keyword blacklisting, publishers have explored a number of different options. Here are seven of them:
Solution 1: Doubling down on subscriptions
After initially dropping paywalls for COVID content, some publishers, like the U.S. newspaper group McClatchy reinstated them. The move to subscriptions and reader revenue is a long-term financial driver for many publishers. But, the need for this emphasis was reinforced by sudden declines in per-view programmatic revenue.
In a memo to staff, McClatchy’s Vice President of News Kristin Roberts explained:
“Since our coronavirus coverage began, 13% of views were by people who would have been stopped by the paywall if it had been up. If we converted even a tiny fraction of those people, we would have generated more in subscription revenue than we are earning on the per-pageview (“programmatic”) revenue.”
In response, Axios reported the company allowed local editors to determine which stories would be in front of the paywall, and which ones would be behind it.
This decision, which other publishers will also have wrestled with, saw the company trying to balance the provision of public health information with an imperative to drive subscriptions in a bid to meet shortfalls from advertising and other revenue streams.
Solution 2: Getting more creative
Although the coronavirus crisis had a positive impact on website traffic for many news publishers, they were not necessarily able to monetise it through digital advertising in the way that they would have liked.
As a result, this has encouraged some publishers to think differently about the ways in which they can work with advertisers; and perhaps emphasised the need to avoid going “all in” with Ad Tech solutions like programmatic.
The Interactive Advertising Bureau (IAB) highlighted some of these opportunities in a report at the end of April, which included sponsorship and other content adjacent opportunities, as well as lower rates and pushing campaigns back to later in the year.
Elsewhere, in a webinar moderated by Dan Rua, CEO, Admiral, and Christian Hendricks, President, LMC (Local Media Consortium), publishers offered their thoughts on additional strategies and approaches.
Mike Orren, at The Dallas Morning News, for example recommended that publishers “carve out some of the premium inventory and offer it to local/premium advertisers for free to create goodwill.”
Solution 3: Working with Big Tech
Recognising the challenging economics that many publishers faced (and the pressure they were under to help), platforms stepped in to offer funding and other forms of support for publishers.
The Google News Initiative, for example, distributed funding to more than 5,300 local publications via their Journalism Emergency Relief Fund.
They also agreed to an ad-serving fee waiver on Google Ad Manager.
“Many news publishers around the world use Google Ad Manager to support their digital businesses with advertising,” Jason Washing, Managing Director, Global Partnerships – News wrote in a blog post.
Acknowledging the impact of the pandemic on the global economy, he announced in April that Google had “decided to waive ad serving fees for news publishers globally on Ad Manager for five months.” These cost-savings, although only temporary, were no doubt welcome for publishers given the overnight impact of COVID-19 on their finances.
Nonetheless, there were understandable calls for the tech sector to do more. One such advocate, Jason Kint, President and CEO of Digital Content Next, argued that:
At the same time newsrooms have necessarily shifted coverage towards informing the public on this global pandemic, immature tech platforms are blocking the funding of this journalism.
We repeat our call for the advertising technology and verification platforms, including Google and Oracle, which have a strong history of reducing friction, to dedicate urgent resources towards solutions here, including exempting or encouraging trusted news organizations as a default.
Solution 4: Encouraging advertisers to be advocates for acts of journalism
In response to the level of keyword blocking that publishers were seeing, David Cohen, President of the Interactive Advertising Bureau (IAB), offered some stark words for “brands, agencies, ad verification firms, and other companies in the digital advertising supply chain.”
“Please immediately instruct your brand and agency teams to update your programmatic and all other media buying to enable advertising surrounded by topics you would have previously avoided, including “crisis,” “COVID-19,” “coronavirus,” etc.” he argued. “The faster you do this, the more lives you will save.”
“Every dollar you spend on credible news sites helps save lives,” Cohen said, identifying three key benefits:
- “It ensures that credible news organizations can afford the staff required to provide critically vital information.
- It ensures that reckless disinformation efforts will be blunted by news that is accurate, fact-checked, and reliable.
- It ensures that the public at large — the people who buy your products — stay alive and well.”
In a joint statement, the News Media Alliance and Digital Content Next made a similar call. Alliance President & CEO David Chavern stressed the important life-saving work that news outlets were producing. “Keyword blocking serves to punish publishers for this very same coverage, with potentially catastrophic effects,” he said.
“America needs a vibrant, ad-supported news industry, and it has never needed it more,” IAB’s Cohen added. “Open the floodgates of advertising dollars to support credible news sources. Don’t debate. Don’t delay. Do it now. The stakes are too high to do anything less.”
Solution 5: Whitelisting and Ad Blocking recovery
According to the 2020 PageFair Adblock Report, by the end of 2019 763 million devices around the world were blocking ads. This includes 527 million mobile devices, as ad-blocking becomes platform agnostic.
COVID-19 has once again identified the need for publishers to address this situation, by encouraging whitelisting, Adblock recovery (whitelisting + ad-reinsertion), as well as the need to serve better ads.
This is particularly important given the paradox whereby audiences were spending more time with media, yet publisher revenues (especially from advertising) appeared – in some cases – to be in freefall.
Against this backdrop, publishers can ill afford to miss out on potential income as a result of unserved ads.
“We’ve been engaging adblock users for almost a year now,” David Rowley at Advanced Local told an industry forum, “and we’ve seen our adblock rates significantly reduced over time. I’m very grateful in the sense we did this before this pandemic and now we can monetize almost every user that comes to our sites.”
It should not have taken a pandemic for other publishers to also embrace this need, but in some cases COVID-19 has acted as a catalyst for reviewing these issues.
Solution 6: Showing the impact of your ads
At the same time as addressing these issues, publishers arguably also need to make a better case for the impact that ads on their sites are having.
“Ads placed next to coronavirus content are getting more attention than they would normally,” Mike Follett, managing director of the London-based Lumen Research, told German media giant DW.
Brands are shooting themselves in the foot by blacklisting around keywords associated with the coronavirus Follett said.
Eye-tracking research conducted by his company revealed that two-thirds of digital ads were being noticed, compared just over half six months prior to the pandemic.
New research suggests the global eye tracking market will grow at a CAGR of 24.5% from 2020 to 2025, to become a $1 billion industry by 2025 from $368 million in 2020, with APAC expected to be the fastest-growing region for the technology.
Solution 7: Next Gen Programmatic
Finally, another technological advancement is also worth noting. As ad tech evolves, AI and semantic understanding look to set to offer potential solutions that will benefit publishers and enable advertisers to move away from crude one-size-fits-all blocking lists. In its place comes contextual targeting, whereby ad tech recognises that words can mean different things in different settings.
One example of this in action is Mantis, which IBM describes as “an AI-powered screening tool that understands the context of articles and images to help publishers unlock more ad-safe inventory.”
Created by Reach plc, the UK’s largest commercial news publisher, the platform harnesses IBM Watson Natural Language Understanding and Watson Visual Recognition on the IBM Cloud. In testing for coronavirus and COVID-19 related stories, Mantis reduced adblocking between 70-75%, the company said in a press release.
Moreover, customers are seemingly more open to this technology, according to new data from DoubleVerify’s 2020 Global Insights Report.
“The message is clear,” Michael Feeley writes for The Drum. “If your brand safety strategy is still based predominately on a keyword blocking strategy, it’s time to talk to technology platforms about the other sophisticated options and tools they can offer.”
“The COVID-19 pandemic shook the world, but it also helped bring many of the flaws in our advertising to the surface,” says IBM Watson Advertising’s Jeremy Hlavacek.
For publishers, this may have reiterated the need to deploy a wide range of strategies to improve the delivery of digital ads, as well as the creative relationships they have with advertisers.
Alongside this, the pandemic has shown how publishers can be advocates for change both in terms of reshaping the supply chain of digital ads, as well as getting marketers and agencies to think differently about their relationship with content and the adjacency of their respective brands.
When it comes to advertising strategies and their relationship with ad tech, COVID-19 – as it has with engagement and subscription strategies – may be another instance where the coronavirus crisis acts as a catalyst for publishers to do things differently or reinforce the importance of existing strategies.
As Hlavacek advises, “It’s now up to us to make sure we’re flexible and ready for anything else that may come our way.”
This article is adapted from our free to download report, The Publisher’s Guide to Navigating COVID-19.
