Coronavirus and digital media industry trends: 4/24/20
This week’s update dives into what we’re seeing across ad trends and how companies are trying to make sense of marketing during the pandemic. What we’re seeing with ad trends We’re finally seeing some improvements in ad spending after a...
This week’s update dives into what we’re seeing across ad trends and how companies are trying to make sense of marketing during the pandemic.
What we’re seeing with ad trends
We’re finally seeing some improvements in ad spending after a few flat weeks at the start of Q2. It’s still very early, but we’re seeing a measurable increase in average network-wide RPMs this week. Not every site in our network is experiencing RPM increases, but we’re optimistic that in the next few weeks we will see more growth.
Some advertisers are coming back to market
Some of this growth can be attributed to advertisers coming back to the market. Many advertisers left the market in mid-March through the beginning of Q2, for many reasons, including:
- Reduced demand for their products and services — for example, travel and live events.
- Lack of product supply — toilet paper, paper towels, and even some fresh foods were having difficulty getting to market.
- Market saturation – for example, Netflix had a record quarter for new subscriber signups.
- Concerns around consumer perception brands wanted to make sure their advertising was respectful of these complicated times that we’re living in.
Group 1: Advertisers in this group are going to come back slowly and unevenly. It’s anyone’s guess as to when the travel industry will rebound, although there’s one notable exception. Hilton’s Doubletree launched a big ad campaign around their release of their secret chocolate chip cookie recipe — almost doubling travel advertising spend across our network in the last week.
Savvy advertisers know it’s critical to stay in touch with their consumers so when the market comes back, those consumers will flock back to their brand. We’re hopeful that more travel advertisers will try smart campaigns like this to stay relevant.
Group 2: Advertisers in the second group are coming back to market as supply issues get fixed. While toilet paper is still really hard to find in many parts of the US, other products are getting to market more easily, and therefore advertising is slowly coming back. There are future risks of other supply chain issues that could cause more bumps in the road and potential impact to ad spend.
Group 3: Advertisers in this group are still dealing with unprecedented demand. Until they need to advertise to attract customers, they are unlikely to spend much on advertising — more on this later in the article.
Group 4: The fourth group is probably the largest of all. It’s the group that is unsure how to advertise correctly in this market.
A few weeks ago we mentioned Nike’s “Play Inside” campaign and others that are tailored to this time-and-place. More advertisers are launching campaigns like this, and others are becoming more comfortable with the idea that advertising can be okay and even a benefit in these times.
This is the group where we’re seeing the most growth and leads to some of our optimism.
Focusing on technical efficiency and incremental revenue
CafeMedia’s engineering team has been hard at work with continued updates to our technical systems’ efficiency. In the last two weeks, we’ve made a number of changes to increase revenue across the network, and we have a large number of other changes coming over the next few weeks and months to keep driving incremental revenue.
Are the companies that are really benefiting right now spending more on ads?
There have been some surprise “big winners” in these strange times, as the unforeseen and sudden quarantine and stay home orders left many people scrambling to adapt to new lives at home 24/7.
They began stocking up on things like pantry goods, home exercise equipment, resources for home education and childcare, technology (from computer monitors to Zoom meeting software) needed to work remotely.
Some products saw huge drops in demand (people were no longer booking cruises, were spending less on fashion, car sales plummeted), making lower advertiser spending make sense. But the high demand for other products understandably has publishers wondering if those companies that are doing well right now are spending more on ads.
The answer to that question is: It’s mixed — some are and some aren’t.
In some cases, companies are doubling down on their success. Even though adapting to work from home has made many tech and telecom companies household names, they’re still spending on advertising. We’re seeing some of these types of brands spend anywhere from 66% to over 1000% more than a typical week in February.
Just because a company is doing well right now, this doesn’t mean they’re increasing their marketing budget. Whether because of more orders than they can keep up with or fill, or simply massive interest and word-of-mouth advertising, many of these companies that are doing well right now don’t want or need to spend money on digital advertising.
We will continue to bring you weekly updates on industry trends as the market changes. In the meantime, please check out our previous Coronavirus blog updates here.