Coronavirus and digital media industry trends: 3/20/20
The Coronavirus pandemic is impacting nearly all aspects of our daily lives - digital advertising included. Here’s an update on trends we’re seeing across our network and in the industry right now. Advertisers are currently cutting back on spend Our...
The Coronavirus pandemic is impacting nearly all aspects of our daily lives – digital advertising included. Here’s an update on trends we’re seeing across our network and in the industry right now.
Advertisers are currently cutting back on spend
Our ad sales team works directly with advertisers to negotiate unique deals for CAM publishers, and they’ve been touching base with our partners over the last week. Many advertisers are cutting back on spend right now for several reasons:
- Some don’t have products/services to sell at the moment. Either stores are out of stock of their products, or the stores that sell their products are closed. Or for retailers/restaurants/travel companies, their stores/hotels/airlines are closed or closing for the time being. With event cancellations happening across sports, concerts, and entertainment, they are also struggling to determine where to focus their traditional spend.
- Some don’t need to advertise to sell products right now. Their products are in such high demand that advertising would drive demand that they can’t fulfill.
- Some are trying to avoid Coronavirus-related content. They don’t want to be seen as capitalizing on a crisis. They’re also trying to figure out the right places and ways to advertise on this sort of content, but it takes time for them to figure this out.
Product shortages and coronavirus advertising strategies will hopefully be addressed relatively quickly, so we expect those advertisers will be back in the short term. It will be longer before stores reopen and some industries recover and those advertisers will take longer to come back to market.
What we’re doing
We’re staying in close contact with brands and advertisers and working to help them understand how readers are behaving on your sites. We’re also educating them on how to spend safely (and why not all pages with Coronavirus keywords are risky to advertise on) with the hope that this encourages creative ways to regain momentum.
RPMs are volatile
RPMs are seeing swings from one day to the next that vary widely across different websites as reader behavior becomes increasingly unpredictable.
Three major RPM components
RPM is essentially driven by three primary factors:
- Advertiser spending (CPM)
- Reader behavior
- The ad layout and formats running on the page
Advertiser spending is declining
This week, we are seeing advertiser spending drop. In some cases, CPMs are decreasing by 20% from the beginning of the week. Part of that is driven by advertisers reducing their spending, and part of that is being driven by more time spent on site — the more time a user spends on a site, the more ads they see, and later ads in a session earn less than earlier ones.
We’re also seeing more significant advertiser spending drops on content with the keywords “Coronavirus” and “COVID”. RPM on content with those keywords decreases by 30% or more, although increased traffic based on those keywords may bring up net revenue for that content.
Reader behavior is different
Pageviews are up, in general, across many verticals, but reader interest is shifting and evolving as world events unfold.
Time on page is up significantly for many websites, and more time on the page leads to more ad impressions per pageview.
This means that net revenue may be a more meaningful metric to look at than RPM right now.
Ad layout and formats
Video content is performing exceptionally well right now. Video is seeing less negative impact from recent changes than display ads. As readers spend more time on the page, capturing their interest with video content is especially valuable for overall earnings.
Because of increased traffic, decreased advertiser spend, and rapid shifts in readers’ online behavior, publishers may be seeing volatile RPMs and decreased (or flat) overall revenue.
The situation is changing very rapidly, and it’s likely that the industry sees more declines in the next few weeks before any improvements. As always, we’re monitoring this closely – with both our publishers and advertisers – and will keep the updates coming!