Weekly Roundup: COVID-19 Trends, GAM Market Share, Adtech Tax, and More.

COVID-19 Trends and Dealing with the Crisis

Ever since the COVID-19 crisis has started, we are keeping you informed about every development taking place in the industry. Our updates are aimed to help you stay ahead of the curve so that you can deal with the crisis before it is too late. Here are the updates for this week:

Government Aids

Many governments in the world are either planning or have already begun their work towards providing aids to the local news industry. The Government of Canada is planning a $30M ad buy as well as tax incentives for news publishers. The UK government has launched a campaign for three months which worths $44M. The US government has already passed a $2T package that includes some news companies and further measures are being sought by the industry advocates. The publishers in Australia and Ireland are trying to convince the government to tax the tech giants and use the money to save the publishers.

Ads are performing better on Coronavirus content

Reach started acting on keyword blacklisting months before the COVID-19 crisis started. Now the efforts are reaping the benefits. Reap experimented by running two different campaigns. In one campaign all the articles with coronavirus related keywords were blocked. On the other campaign, it used AI to decide whether the content with coronavirus related keyword is brand safe or not. If the AI found the article to be brand-safe, ads were delivered on content with the coronavirus related keywords.

While comparing the two cases it was found that the “in-view” time increased by 48% in the case of coronavirus related brand-safe content. CTR also saw an increase of 26%. 

If brands start accepting the high engagement on brand-safe content, then such solutions can prove to be useful to fight the inefficiencies of blunt keyword blacklisting. 

Moving towards subscriptions

YouTube is trying to enable publishers to earn money by selling subscriptions. It will allow publishers to store content behind a paywall. Only the users with the monthly subscription would be able to access the exclusive content behind the paywall. The move aims to support the news industry amid falling revenues.

Users are adapting to the subscription culture and the publishers are leveraging the changing preferences. Due to the shifting preferences, the NYT has managed to pull 5,87,000 new subscribers in the Q1 of 2020. In 2011, the company took 18 months to reach a similar number (566,000). It shows how users are ready to pay for the news if the source is trustworthy.

Pulling out inventory to save future revenues

In an unconventional move, some publishers are pulling out their inventory from the programmatic market to safeguard their future revenues. There is a fear that if the prices keep going down then they can sink so low that it won’t be possible to bring them back to the normal level even after the pandemic is gone. 

Another argument behind the action is that if the prices will be in the rock bottom then undesirable advertisers will start surfacing, it will create difficulty in on-boarding premium advertisers in the future. BuzzFeed is removing inventory with low viewability. Other publishers are removing the ad slots or filling them with in-house ads. Our suggestion is to don’t pull out anything if you rely on it. 

Some publishers will have the privilege to stop programmatic ads and leverage paying subscribers to run the business. Assess your strengths and act accordingly. 

Advertisers are reluctant to spend on ads

A recent survey by Digiday shows that 63% of brands are reducing their ad spend due to the pandemic. Additionally, almost 40% of advertisers are not ready to show ads around coronavirus content.

Another study by Digiday analyses the world’s biggest advertisers to gauge the future implications of the current situation. The findings were not decisive. Advertisers like P&G and NBCUniversal that deal in essentials and digital products respectively can be seen increasing their ad spends. Amazon says it will spend more in the essentials category. 

Other advertisers who are not very optimistic about the future are decreasing the spending. These advertisers are L’Oréal, Renault Nissan Mitsubishi alliance, Coca-Cola, and Volkswagen.

Avoiding the C-word

As the reluctance of advertisers is evident, publishers are trying to avoid using coronavirus related keywords in their content.  The people responsible for handling the revenue are requesting the editorial team members to not to use such keywords until it is necessary. 

Over the past three weeks, the incidence of the term “coronavirus” has begun to slide down. “Amid coronavirus” has given way to “With everybody staying at home,” or “in this moment,” or the still-vaguer “right now.”

– Digiday

Takeaway:

This surely is a difficult time for publishers. But the industry is finding its way to come out of it. The government’s help will provide the necessary support, the publishers should take the required actions to make sure the relief packages reach them.

If the adoption of brand-safety solutions picks up the pace then a little relief can be expected from keyword blacklisting. Revenue diversification through subscriptions is yet another way of mitigating the losses. You can try avoiding the C-word in your content, it will not be required for a long time as the interest in the topic will decline soon. As time will pass, you will start seeing normal engagement in your non-coronavirus content too.

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How Google is Ruling the SSP Space

A few months back, Google switched to the first-party auctions. Advertiser Perceptions recently conducted a survey to see its impact on the publishers. The survey not only shows how the earnings of the publishers are changing but it also manifests the stronghold of Google Ad Manager in the SSP market.

Revenue: 

The sample size of the survey was 150 and it contained ad sales and operations professionals at sites with more than 3 million monthly visitors. Only 4% of the 150 publishers saw a negative impact of the switch to first-party auctions. 43% of them saw no change in the revenue whereas 47% saw an increased revenue.

GAM’s Market Share: 

81% of the publishers use Google Ad Manager, 46% of the total uses Amazon Publisher Services, and the remaining top 14 SSPs work with 35% to 11% of the total publishers.

60% of the publishers say that GAM is their preferred partner whereas only 12% preferred Amazon Publisher Services as their top partner. Other SSPs like OpenX, SpotX, and Verizon were preferred by 3%-6% of the publishers.

Takeaway:

Google’s top position can not only be attributed to its services but also to its 360-degree integration. It is not only present on the supply side but also on the demand side as well as in the middle of both sides. It connects with the publishers from day one, brings demand for them, and retains them throughout their journey.

Adtech Tax: Publishers Get Only 51% of Advertiser Spend

It is no secret that the ad tech industry is in the need of Supply Path Optimization. From duplicate bidding to unwanted overhead cost, inefficient supply paths hurt DSPs (and so the advertisers). It is clear that the unoptimized supply path causes loss. now a new study published by ISBA demonstrates the magnitude of these losses.

The study says:

• “publishers receive 51% of advertiser spend on average; and
• taking other visible costs such as DSP/SSP fees and other technology costs, 15% of advertiser spend – an “unknown delta”, representing around one-third of supply chain costs – could not be attributed.”

These findings are alarming. The publisher receives only half of the ad spend, 15% goes to the fees and nobody knows where the remaining 34% goes? Apart from this, if we factor out ad frauds, the publisher will be left with less than 50% of the total ad spend. 

The study was conducted on the impressions traded between 15 advertisers, eight agencies, five demand-side platforms, six supply-side platforms, and 12 publishers from the Association of Online Publishers from Jan. 1 to 20. March. Data collection was done by PwC.

Takeaway: 

These findings expose the dire need for a better and more transparent supply path. In the long term, it will hurt publishers the most. If the advertisers will keep losing money on their ad spends, they will seek alternatives, and the demand from the open auctions will keep decreasing. It is the responsibility of each and every party in the industry to work for SPO. It will bring more money to the publishers, save the money of advertisers, and weed out the bad players. 

5/x The most controversial finding will likely be a mysterious 15% of spend that could not be accounted for, even after reviewing both buy- and sell-side logs. Let’s spend a couple of tweets digging into that… pic.twitter.com/e4ULPQite9

— Ari Paparo (@aripap) May 6, 2020

Moments that Matter

• ICO statement on Adtech work – ICO
• What We Learned About the State of Display Advertising from April Earnings Calls – eMarketer
• Publishers guard against ad tech vendors failing – Digiday
• FTC Seeks Ad Tech Pros To Bone Up On The ‘Opaque’ Business Of Digital Advertising – Ad Exchanger