Coronavirus, also known as COVID-19, is rapidly spreading around the world. Its effects can be felt in every industry and digital advertising is certainly not immune. This post covers the impacts we’re seeing on digital advertising and trends we’re seeing media owners take to mitigate the impact on their business.
Surge of supply
To stop the spread of this deadly virus social distancing and shelter in place regulations are recommended, if not mandated. This is helping prevent the spread of COVID-19, the number one priority, but as an unintended side effect, it has led to a spike in viewership as people spend more time at home streaming and surfing the internet. For the week of March 19, we saw a 16% increase in video ad inventory across SpotX’s global marketplace, compared to the prior week. We expect to continue seeing a surge in supply for the foreseeable future.
Demand is shifting
At the same time as we’re seeing an increase in supply, we’re seeing a decrease in spend. Brands in some cases have stopped spending altogether, while others have merely postponed. According to a recent IAB survey, nearly a quarter (24%) of buy-side respondents have paused all advertising spend for Q2 2020.
Across SpotX’s global marketplace we’ve also noticed a shift in where spend is coming from. While many ad categories are seeing a decrease in spend, in the past week (3/26-4/1) compared to the week prior (3/19-3/25) we’ve noticed an increase in spend from arts and entertainment, family and parenting, hobbies and interests, political, religion and spirituality, retail, and tobacco.
What should media owners do?
Unfortunately, there is no one-size-fits-all solution for media owners to handle this unprecedented situation. As supply rises and spend drops, here are some of the strategies we’ve seen media owners adopt in an attempt to maximize demand:
Creating unique inventory packages to match buyer demand
We’ve seen some media owners have success organizing their supply into unique inventory packages across various genres or specific categories. For example, with many live sporting events canceled, buyers are looking to relocate their dollars to other live events that offer the same lean-in experience as sports, and other content with similar demographics (i.e. male-skewing content).
Enticing buyers with more information about where their ads will play
We’ve heard from media owners and the buy side that providing more insights about the content ads will play within highlights the value and relevance of inventory, thus increasing demand. Media owners are utilizing key value pairs to allow targeting and post-campaign reporting on things like specific programs, episodes, genres, and live vs. on-demand environments.
Stepping back into the open market
To maximize demand competing for inventory, we’ve noticed premium media owners offering their supply up on the SpotX Open Marketplace. Enabling the SpotX Open Marketplace opens your supply up to a huge pool of buyers who access this inventory through our 60+ DSP connections. SpotX provides media owners complete control over their inventory in the Open Marketplace. Pricing, participation, and commercial terms can be closely monitored and managed so as not to devalue inventory.
Harnessing the power of audience data
According to the same IAB survey mentioned above, 38% of advertisers are increasingly using audience targeting as a tactic. With the SpotX Audience Management Engine (AME) you can target campaigns using first- or third-party audience data segments directly from the SpotX platform. First- and third-party audience targeting enables you to boost performance of advertisers’ KPIs, increasing CPMs for programmatic campaigns.
SpotX’s direct DMP integrations open the door to a broader pool of premium advertisers who are eager to pay a higher CPM to reach more niche audiences. Currently, AME supports the following DMPs for first-party data: Lotame, Salesforce DMP (f.k.a. Krux), Adobe DMP, Oracle Data Cloud, LiveRamp, and CXense. In addition to proprietary first-party data, you can also layer third-party audience data through Tru Optik, Oracle Data Cloud, Neustar, and Nielsen Marketing Cloud.
Modifying setup to maximize demand
Depending on your setup, a couple of changes could help increase demand:
- Extend timeouts to allow for more demand to compete in the auction. This change is not recommended if you are submitting bids from SpotX into an upstream auction.
- Increase ad duration to allow creatives of all lengths to compete in the auction. Many media owners restrict the ad duration in certain ad units to enhance user experience. However, this could mean you’re leaving potential revenue on the table. For example, pharmaceutical advertisers regularly require supply that can support their 60-second advertisements.
Offering temporary discounts to advertisers
With the volatility of the market, advertisers are reevaluating spend. Temporarily lowering floor prices can unlock advertiser spend and encourage buyers to try new supply sources. Some SpotX media owners have reported seeing positive results offering 10-20% discounts to entice demand.
We are still in the early days of understanding the impact of this global health crisis on the digital advertising ecosystem. Stay tuned as we learn more. In the meantime, contact your SpotX Account Team for more information and to learn if any of these strategies are right for your account.