COVID-19 Marketing Through Crisis READ MORE
Quick Take

Programmatic Pricing and COVID-19

With life in lockdown because of COVID-19, digital consumption patterns across the U.S. are changing rapidly. What does this mean for the programmatic marketplace?

With life in lockdown because of COVID-19, digital consumption patterns across the U.S. are changing rapidly. Decreased activity outside of the home is driving web traffic to peak rates, while audiences engage with content with greater volume and frequency.

At the same time, many advertisers are cutting their ad dollars for a variety of reasons, including sensitivity to appearing near COVID related content, and recouping financial setbacks tied to the rapidly declining economy. Publishers are expected to lose billions of dollars as the demand for ad inventory decreases. This combination of increased website traffic and fewer ad dollars is creating a surplus in ad inventory.

Over-Supply of Content, with Little Advertiser Demand

COVID-19 content continues to not only dominate the news cycle, butis ubiquitous in articles and videos across the internet. From blog posts touting DIY hand sanitizer to YouTube videos promoting calming meditation for COVID anxiety, COVID keywords are everywhere and they come with their own challenges for media buying and planning. This influx in content is up against advertisers’ hesitation to run alongside any COVID related content. In turn, advertisers have chosen to enable pre-bid keyword filters to prevent their content from showing up with COVID content. This is exacerbating an already waning ad market.

What Does This Mean for Advertisers?

Without enough paid ads to match inventory, CPMs are falling across the board. Digiday is reporting that programmatic ad rates are down 30%; Facebook and Google are reporting similar numbers with Facebook seeing anywhere from a 35 to a 50% decline in pricing. Advertisers willing to re-engage in programmatic advertising, regardless of the potential to run beside COVID-related content, are benefitting from reduced competition and pricing — and potentially higher engagement and ROAS across display and paid social.

Our Recommendation

Melissa Wisehart, our SVP of Programmatic media, puts it in perspective: "With such an unprecedented surge in content with little demand to meet it, it can be a strong advantage for re-entering the marketplace. But we know that how brands handle themselves in times of crisis can have long-lasting effects on consumer preference — both positive and negative. Make sure your message is going to resonate in this moment. The brands that do will have incredible short-term performance results and positive brand equity for the long term — which will be key to coming out of COVID in a strong position."

Advertisers who are willing to maintain their programmatic buys or re-enter the market can benefit from the efficiencies that the current landscape presents, particularly in the realm of programmatic or biddable advertising. Real-time bidding offers the greatest opportunity for flexibility with ad spend while optimizing toward efficient KPIs. Layering on pre-bid ad filtering allows advertisers to take advantage of the surplus market while remaining brand safe and avoiding COVID related content.

For advertisers currently in-market, expect to see CPM efficiencies in current campaigns run in biddable platforms. If possible, consider shifting or testing campaigns in biddable platforms to compare efficiencies against flat-rate or managed service buys where CPMs are not dynamic.

Do good things.

Undoubtedly, the challenges associated with COVID-19 require time, attention, and a commitment to public health and safety. As humans, we must all do our part to help others. As business people, we must also recognize that this is a passing moment and keep an eye on our resilience. Our consumers, our employees, and our businesses rely on us to serve them both in times of crisis and times of confidence.

Our motto at 22squared is "Do good things." Our commitment to our client community has never been stronger. As you sort through the implications to your business, please reach out to us for a conversation and thought partnership.

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