Q3 is starting: Here’s what publishers can expect
Q2 is wrapping up strong for CafeMedia publishers In June, we've seen a consistent upward trend in advertiser spending in all categories When we started the second quarter (April–June), it was at a moment of deep uncertainty for the US...
Q2 is wrapping up strong for CafeMedia publishers
In June, we’ve seen a consistent upward trend in advertiser spending in all categories
When we started the second quarter (April–June), it was at a moment of deep uncertainty for the US and the world at large. Advertiser spending had been trending down for weeks as the economy felt the impact of COVID-19.
We knew Q2 ad spending would be off to a rocky start. April confirmed our expectations, although some publishers saw traffic surges to counterbalance RPM declines. May brought some slight signs of positive momentum, particularly in the second half of the month.
We switched to cautious optimism in anticipation of June, but we weren’t quite ready for the month’s evolution. June started off strong and has exceeded expectations with nearly every passing day. Advertisers are feeling more confident, and that’s good for publishers. Compared to May, we’ve seen strong advertiser spend increases in nearly all major categories in June.
A number of categories that were hit particularly hard in the midst of the pandemic are seeing strong growth now:
- Automotive advertising is up significantly.
- Travel spending is up as well, although the types of Travel advertisers are changing, with more focus on local/regional travel than international destinations.
- Consumer Packaged Goods (CPG), which includes home care products like paper towels and cleaning supplies, and personal care products like deodorant and shampoo, is seeing very strong growth also. Since CPG brands are among the largest advertisers of all, growth in this category is particularly important.
- While Entertainment as a category is still somewhat struggling, there are significant launches happening from different brands, like HBO Max, driving revenue across CafeMedia sites.
Our network’s growth means good things for advertiser spending on CafeMedia sites
With May numbers finalized, CafeMedia publishers hit a new record in Comscore, now occupying the #11 spot!
This time last year (May 2019), our community occupied the #19 spot. Now, we’re almost in the top 10 list, where you’ll find industry giants like Apple, Hearst, CBS, and Comcast.
Advertisers rely on Comscore to make informed spending decisions, and the CafeMedia community’s rapid growth solidifies our publishers’ place in recovering advertiser budgets.
Q3 starting next week: here’s what to expect
While the beginning of the year is the lowest point in advertiser spending, the beginning of the third quarter is a close second. Many large companies run their financial year from July 1 to June 30, so for those companies, July effectively begins a new year — their 2021 fiscal year.
When advertisers start a new fiscal year, they reset all budgets, restart all campaigns, and change many of their strategies. That means that the first few weeks of July always have significantly diminished spending compared to the last few weeks of June.
The first few days of July are usually higher-than-normal. Advertisers with a big Fourth of July focus spend a lot on the holiday, offsetting the overall decline in ad spending from those resetting their budgets. After Fourth of July spending fades, prepare for a soft few weeks.
July and August will see increased spending from back-to-school oriented advertisers, which may look different this year depending on how school and college openings go, and as the kind of supplies needed may change.
And we must keep in mind the pandemic. Just like the beginning of Q2, Q3 is beginning with more large outbreaks of COVID-19. While advertisers have a much better understanding now of how to respond, no one likes uncertainty. If we see continued significant growth in cases and fear of a “second wave”, that could put a damper on advertiser spending and cause them to pull back and wait.
Overall, we’re cautiously optimistic for Q3, but we’re also prepared if advertiser spending trends back downwards again, following economic and pandemic movement.