Login
close
Login is restricted to DCN Publisher Members. If you are a DCN Member and don't have an account, register here.
Search

Digital Content Next logo

Menu

Category results for "Revenue"

Industry-Research | Revenue

Advertising’s return to “normal” following Covid-19

Nearly every industry has faced unprecedented changes and challenges due to Covid-19. As a result of shifts in the economy, sectors have had to adjust their advertising spend. Some have fared better than others throughout the past few months. But with the U.S. entering the path to reopening and businesses slowly beginning to return to “normal,” more changes are upon us. Advertising is now making its own comeback. 

Here at MediaRadar we took a deep dive into how the ad industry has fared throughout the pandemic and the sectors that are beginning to see a rebound. 

How the advertising industry has fared 

In January and February 2020, ad spend was up 8% YoY. When Covid-19 began impacting the U.S., ad spending plummeted. According to our data, the trough occurred the week of March 22, when spend was down -36% YoY. 

Now, every state in the U.S. has started reopening business in some capacity and the ad dollars are beginning to return to the market. While some industries will be slower to return to “normal” than others, many who saw steep declines early in the pandemic are beginning to advertise more regularly again.

Industries making a rebound 

Automotive

Amid the country’s reopening, spend from the auto industry is accelerating. Ad spend during the week of May 24 was nearly double where it was just three weeks earlier. Brands reviving their spend in recent weeks include Toyota, GM, Nissan, Subaru, and others. 

Total car sales also recovered somewhat in May. The annualized sales rate, although still down nearly one-third YoY, jumped 42% MoM in May. China, which is further along in recovery than the U.S., saw car sales increase 12% YoY in May. This marks the second consecutive month of YoY growth. In the U.S., many consumers who do not own cars are now considering buying one to avoid public transit and ride-sharing, and to enable road trips and travel closer to home.

Domestic & regional tourism 

Domestic tourism is beginning to pick up, as the pandemic eases across the U.S. The week of May 24 saw more than 3x the advertising spend than just one month prior, with more than 350 active local tourism bureaus buying.

YoY, spend during the week of May 24 still remains down 63%. However, this is a stark improvement over April, where spend was down 89% YoY. 

There are other positive signs for the industry. Airbnb, for example, is experiencing a surge in interest, with more U.S. bookings between May 17 and June 3 than during the same period last year, much of which is being driven by relatively nearby trips. American Airlines is also boosting its domestic flight schedule as they see increased domestic demand, specifically to places like Florida or mountains out west. According to The Economist, Google search data reveals that travelers are much more interested in domestic travel for the remainder of 2020, favoring smaller attractions over large tourist destinations. All of this is likely to lead to a further increase in domestic tourism advertising.

Hair care 

From March 8 through May 16, hair care ad spend was down 31% YoY. However, the last two weeks have both been up YoY, the first time since the beginning of March. 

In April, Unilever estimated that people were using personal care products eleven fewer times per week due to shelter-in-place orders. Unilever’s CFO specifically called out shampoo as an example of a product consumers are using less as they stay indoors. But with people beginning to go outside again, hair care ad spending has now picked back up to levels consistent with last year.

Real estate

Real estate advertising was hit hard amid Covid-19. It was down 55% in April when compared to the January through March average. But ad spend levels in mid-May were 34% higher than where they were in early April, showing an early sign of recovery. 

States that reopened earlier, like Texas and Florida, have seen real estate ad dollars return more quickly. The average weekly spend in April ($6.7M) was down by more than half, 55%, when compared to the average weekly spend in January – March ($14.9M).

New home sales also increased 21% YoY in May, according to a survey of 300 U.S. construction companies. And mortgage applications for the week of May 24 were up 17% YoY, their seventh consecutive week of increases, according to the Mortgage Bankers Association. Experts attribute the rise to pent-up demand, as well as a desire to move into a new home before a possible second wave in the fall.

Health & fitness services 

The reopening of gyms around the country has resulted in a strong bounceback for health and fitness brand advertising. Ad spend during the last week of May was at its highest point in 11 weeks, bringing the last three weeks up to YoY levels.

Normally in the summer these brands typically begin to taper off their ad spending. But this year, they are ramping up to get customers back. Many states such as Minnesota, Florida, California, Pennsylvania, and others have begun reopening gyms, However, visitors will find things different when they return – with spaced out equipment for social distancing, caps on capacity, stricter hygiene rules, and more.

The road to recovery 

While a full recovery is still far off, we can clearly see some segments beginning to reemerge and put ad dollars back into the market.  It will take more time, But data that shows early signs of recovery is certainly a great start. It helps show that industries feel confident and optimistic about the road ahead. 

Advertising | Revenue

The case for combined revenue models

Subscription models have increased in popularity among growing numbers of publishers who are shifting their focus away from ad sales – and this trend has gained even more ground over the course of the Covid-19 pandemic.

Advertising revenue has taken a substantial hit over the past few months. Just one example is The New York Times, which estimated a 55% drop in ad revenue. Media organizations have gotten creative with their business models in an attempt to make up for this shortfall, offering readers more flexible payment options to drive up subscriptions.

Companies like BuzzFeed News and The Daily Beast have seen huge upticks in membership as a result, according to Digiday. In addition, publishers such as Gannett, The Washington Post, Time Magazine, and The Philadelphia Inquirer have amassed large coronavirus newsletter audiences—in some cases, twice the size of their regular lists.

“We’ve proven to ourselves that we can be far more agile with this product line,” Kim Fox, a product director at the Philadelphia Inquirer, told Digiday.

Subscription models have been wildly successful across a broad range of sectors. Publishers who pair this powerful strategy with their advertising revenue strategies will be most likely to weather the next wave of uncertainty to hit the media industry.

The future of media: advertising and paid subscriptions

Thanks to the massive amounts of data-driven transactions that occur on a daily basis, publishers and advertisers alike are better informed than ever before about their audiences’ behaviors and preferences. They now have the ability to create highly relevant and targeted advertising campaigns that maximize their budgets as well as their brands’ reach.

While advertising will continue to serve as a crucial revenue stream for publishers, subscriptions have proved their ability to act as a powerful complement to the ad sales model with exclusive, creative offerings that strengthen brand loyalty.

The subscription model has already prompted publishers to think outside the box of traditional advertising and explore partnerships like reward programs with brands. For example, U.K. publisher The Times runs a program called Times+ that features exclusive arts, culture, entertainment, and travel rewards from various corporate partners.

Subscriptions offer a win-win for publishers and their audiences because they give consumers the ability to choose the content they pay for, whether their interest is in current affairs, arts and culture, sports, or entertainment.

A longstanding tradition: selling content and ads

The business model of selling content as well as advertising isn’t new to the media industry. Newspapers have always charged newsstand prices, although they looked drastically different more than 100 years ago. In 1851, The New York Times’ first year of existence, a copy of the newspaper sold for 1 cent. It took nearly a century for the price to reach 5 cents in 1950, and by 1974, the price had increased to 20 cents.

Decades later, when the internet rocked the media industry and gave readers unprecedented access to news, there was great debate about whether it signaled the death of print media. Many news organizations didn’t survive the disruption. However, now that the industry has wrapped its head around the paywall system, publishers have been able to reinforce the monetary value of high-quality journalism.

Media companies are seeing the benefits of charging for content once again. For example, in 2019, News Corp Australia’s publications reached 500,000 paid digital subscribers. In the U.S., The New York Times reached 3.5 million paid digital subscribers that year.

“It shows more and more people are willing to pay more for our trusted, quality journalism,” Michael Miller, News Corp Australia’s executive chairman for Australasia, told NewsMediaWorks. “Premium content that resonates with our expanding audiences…is what will drive our long-term success.”  

Although it’s a delicate balance, publishers can successfully sell both content and advertising by putting two important measures in place. First, publishers must ensure that ad placements don’t become too unwieldy, as to not alienate paid subscribers. They must also keep the cost of subscriptions reasonable to maintain substantial audience numbers worthy of attracting advertisers. 

How combined revenue models drive success

Publishers who combine advertising and subscription models carefully are well positioned to reap significant rewards. This is especially true as first-party data becomes an increasingly essential commodity within the media industry in the face of growing data privacy regulations. 

Subscriptions provide publishers with rich first-party audience data. That becomes an attractive selling point for advertisers seeking to maximize their investment in a contextually relevant and brand safe environment.

“Publishers need to focus on what they do really well, which is produce content. They can do native [advertising] and commercialize contextual targeting,” Bedir Aydemir of News UK said at Lineup Systems’ user conference last fall.

McClatchy CEO Craig Forman agrees that context is key to advertisers’ success in the future. And media organizations—particularly local publishers—can harness this trend to help brands reach audiences in meaningful ways.

“What often you can’t find in the world of digital advertising is the adjacency…that makes your advertising important in context,” Forman told Digiday. “And at this time where local is the success story of the emergence, McClatchy and others are doing everything we can to partner with local brands to show them that the trusted environment of local news is where they need to be.”

At The Washington Post, a new digital advertising tool is helping the media company evaluate “brand suitability” in various contexts.

“This particular display product utilizes the real-time messaging of a brand’s social posts and targets them to an audience in the right context. With a news environment that is changing so quickly, this allows brands to be more relevant with their voice,” chief revenue officer Joy Robins told The Drum.

As media organizations continue to innovate, combined revenue models that blend advertising and subscriptions will undoubtedly become even more powerful.

Advertising | Revenue

Rebound ready: Four ways to build digital revenue

We’re in the midst of what Nieman Lab is calling “a profound advertising crisis.” The advertising and media industries have been hit hard by coronavirus, due in part to the cancellation of live sports and the impact of lockdowns on retail brands. 

It’s hard to think about investing when things are so scary. However, there are investments you can make that have a good chance of paying off as we emerge from this downturn. 

Right now, people are willing to read and view online, and digital content is king. Many premier publications have been providing free access to some or all coronavirus coverage, meaning more views. Travel + Leisure found a savvy (and digital) way to boost its audience numbers. For example, its article about famous museums offering virtual tours generated more than 4 million views. And when it comes to streaming, we predict that those companies with more extensive inventory of content will have a better chance of gaining market share.

Trendwatching

At 3Pillar Global, where we develop digital products for clients in the media and entertainment industries (among others), we have seen firsthand how the transition to digital media and advertising has accelerated rapidly. Americans streamed 85% more video in March 2020 than in March 2019. Newsletter open rates are up, especially in arts, entertainment and fashion. We’ve been told by major publishers that they are seeing significant increases in subscriptions.

Media companies looking to survive the revenue losses of Covid-19 have a unique opportunity to leverage increased traffic to their digital content into lucrative relationships post pandemic. Here are four suggestions for media companies navigating a course forward in the current climate: 

1. Demonstrate brand trustworthiness. 

Brands like Bloomberg, The Wall Street Journal, and the Atlantic – which have dropped their paywalls for some coverage – have actually seen spikes in subscriptions. The key is to make sure that content is accurate, concise and thoughtful, in order to preserve brand quality and make a lasting positive impression.

However, surging traffic can cause problems with performance and page load time. Consider easing the deployment of new code to prevent embarrassing outages. For example, Zoom delayed all new features to focus on performance and security amid their privacy controversy. 

2. Understand and serve the unique needs of your new subscribers.

Media companies have a unique opportunity to drive subscriptions from those who have shied away from paying before. But in order to maximize opportunity, make sure you’re collecting the right data. Understand who these new customers are and what they’re looking for. 

With these insights, companies can create subscription models that offer a customizable experience. These might include micropayments for customers who can’t afford a subscription, or short-term subscriptions lasting a few months at a time. Topic-specific subscriptions may attract some new subscribers looking for particular information, and there may be opportunities to partner with other companies, à la ClassPass’s studio partnerships, to attract subscribers looking for variety. Creating value to solve for different needs can keep new customers from unsubscribing.

3. Expand targeted advertising efforts. 

Collect insights from your audience data and target your digital advertising efforts. Be creative in your advertising and your digital products. The New media platform Quibi used social media advertising to target millennial customers, and the platform had 1.7 million downloads in its first week. 

4. Develop virtual events with customer needs top of mind. 

Demand for virtual events is skyrocketing. Financial Times reported that “investors are betting that once people try the digital alternative, many will not want to go back to airless conference centers…” The direct losses from tech events alone have surpassed $1 billion. Even after lockdown eases up, companies will have lower budgets for events and travel, making virtual events more necessary. 

Virtual events have the potential to earn more revenue than in-person events, if done well. They have no physical space limitations, allowing more people to participate; top speakers may be more likely to participate virtually than in person; and you can offer in-conference purchases and products only available to participants. Companies like Bevy, Grip, and Bizly have already been thinking creatively about how to equip people and organizations to reach greater numbers, online. 

The key to virtual events is understanding customer needs. Some people, for example, don’t go to events for the content or speakers. Rather, they go to network, or for the status of being part of marquee events. A virtual event might not serve these audiences. So, if you still opt for virtual, you will have to get creative in status-boosting offerings. 

Conversely, there are customers who wouldn’t have made the cut for an in-person event that you can now serve. For example, TED was highly exclusive. So, the creation of TEDx made it possible to spread more ideas by increasing reach without damaging the brand. Access management platform Okta held a multi-day virtual tech conference that generated thousands more sales leads than its Las Vegas conference; 15,000 people watched the keynote, versus the 6,000 who would have been in attendance in person.  

Advertising revenue may be down, but companies do have many opportunities to build strong digital revenue channels. An investment in digital products now is a long-term, not a short-term investment. But its impact will far outlast the current crisis. 

About the author

Jessica Hall is the vice president of product strategy and design at 3Pillar Global.

Advertising | Innovation | Revenue

How to build the house of addressable TV

Houses are built differently across the globe, designed to local customs and to suit individual owners. But the basic structural elements are the same. Every house needs a foundation, a floor, walls and a roof. The same is true of addressable TV. It requires four essential building blocks, ideally assembled by the people with the knowledge and toolkit to create a sustainable structure.     

By making linear TV addressable, advertisers can enjoy the best of both the TV and digital worlds. They can combine the reach and high engagement levels of TV with the in-depth insights and targeting capabilities of digital. This enables them to deliver a relevant and engaging experience tailored to individual households. A five-year Sky Media study reveals the impact and resonance of addressable, finding it boosts TV ad engagement by more than a third and cuts channel switching by half.

But as these two worlds come together – the complex world of digital and the long-established world of TV – there will inevitably be challenges and complications to overcome. These challenges aren’t just technical, in fact ongoing technological innovation is continually making addressable inventory quicker and simpler to buy. Building the house of addressable TV requires something more sophisticated than a technical solution, it requires the following four building blocks, each with a theme of unification.      

Block one: Unified ecosystem

Collaboration across the entire ecosystem is vital to provide a sustainable structure for addressable TV. And everyone has their individual part to play. Broadcasters are the keepers of the user experience and the holders of the premium content brands are advertising around, while operators are the ones with the customer data to create and empower relevant targeting. Broadcasters and operators are already working together and getting ready for addressable. In the UK, for instance, Sky and Channel 4 formed a partnership last year enabling Channel 4 to use Sky’s AdSmart technology to deliver fully-targeted, addressable ads across its linear channels.

But broadcasters and operators on their own aren’t enough. Tech partners are crucial, from data management partners and measurement providers to ad servers. No amount of endpoints will bring the sophistication needed in ad decisioning without the right technology to underpin the process. To build a solid structure for addressable all parties must commit to relevant partnerships and share knowledge, rather than prioritizing competitive advantage.

Measurement is undoubtedly a big challenge when it comes to the broader adoption of addressable solutions by the TV networks. Addressable impressions are allocated from TV’s overall audience and additional value derived from selling an addressable campaign is linked to the ability to “adjust” the underlying linear rating.

To solve this, third-party measurement firms will be needed to build fair methodology for addressable endpoints. They will also need the operators and technology firms that enable these ad insertions to provide them access to addressable ad impressions.

Block two: Unified view

The second building block in the house of addressable TV is a unified audience view. Addressable allows transactions to cross the border between linear and digital with ease. Ultimately advertisers won’t buy linear or digital inventory, they’ll just buy great TV content across a single, converged and integrated platform. And it doesn’t stop at TV; insight across TV, mobile, and all connected devices will help advertisers gain a more granular and strategic understanding when reaching audiences. 

This sounds like an idyllic situation, with a single view meaning unified audiences and easier decision-making that will improve campaign performance and simplify everyday processes. But changing the model in this way is a big shift for the entire industry, and agencies, advertisers, broadcasters and operators each need time to prepare for this currency change. The industry will need to establish standardized values for touchpoints across digital and TV, meaning that everyone needs to be onboard to make a unified view successful.

Block three: Unified reach

The next component of a successful addressable TV framework is unified reach. Targeting linear TV audiences today is well-refined guesswork, but with addressable there is no need to guess anymore, and probabilities become a thing of the past. Data-led decisioning ensures ads are delivered to the right audiences while they are watching the TV screen, regardless of programming or time of day. Addressable will become a powerful complement to the existing mass distribution approach of linear TV, as it can be delivered alongside traditional ads within the multiple slots of each commercial break.

Advertisers who do embrace addressable should apply caution around over targeting. Just because brands know who they’re advertising to doesn’t mean they should target that individual with the same ad over and over again. Advertisers must be shrewd with addressability. They need to go beyond a generic message with nationwide appeal but avoid the over targeting trap digital display occasionally falls into. Brands should use unified reach with creativity, becoming storytellers to their audiences.        

Block four: Unified reporting

Last but not least, the house of addressable TV needs unified reporting. From broadcasters and operators to agencies and advertisers, all parties need to be saying the same thing and singing from the same song sheet. The other building blocks are less effective if the ecosystem doesn’t report in a standardised and transparent format. 

Reporting has been one of the biggest successes of linear TV. Ratings provide a gold standard that everyone understands, so addressable advertising needs to embrace that standard, marrying the qualities of linear and digital and the granularity of data from both worlds. There will inevitably be debate around collection methods but the most important thing is everyone reports in the same way. Standardised, transparent post-campaign reporting for each audience segment will help to drive adoption of addressable.

Addressable TV advertising has many benefits. But making it work for everyone – regardless of the design of their house – requires more than just a technical solution. By putting in place the four vital building blocks of unified ecosystem, unified view, unified reach and unified reporting, the industry can embrace the best of linear and digital, and assemble a strong, sustainable structure for addressable TV.     

Featured Post | Perspectives | Revenue

The media is failing to communicate journalism’s value to the public

It’s important to celebrate the little victories right now. It’s how we stay sane.

Even in the face of a crisis that threatens the continued existence of newspapers at all levels, small wins are vital. Whether that’s the boost in subscriptions at local titles or the bucking of the conventional wisdom around who can provide good coverage. It’s there if you look hard enough.

Despite that, it’s undeniable that the focus isn’t on expansion at newspapers. It’s about survival, and will be for the foreseeable future. There isn’t a media company in the world that hasn’t been touched by this. Even if some countries provide bailouts to their media, we won’t get through it without the public’s aid.

Which is why it’s very frustrating that some journalists are so terrible at communicating with that public about their publications’ paywalls.

In it together

As much as this is a crisis for the media, it’s as acute for the public. There is understandable panic and confusion. Misinformation – potentially deadly – is everywhere. It follows then that the public – not ‘our readers’ (not yet) – are looking to trusted newsbrands to provide that information. It’s just as understandable, then, that they should feel frustrated when that information is gated. And really, can we blame them for becoming habituated to free digital news over the past decade or more?

The public has not, for the most part, been privy to internal discussions about newspapers’ finances, or falling CPMs, or ad blacklists. Instead, most of the messaging around paywalls over the past few years has been predicated on the idea that you have to pay for quality, which has worked for some.

Despite that, the public by-and-large still do not choose to pay for online news. That’s especially true in comparison to entertainment products – even multiple entertainment subscriptions. So when they hit the paywall, they frequently push back. That’s understandable.

Shouting and shaming

What isn’t understandable is the furious reaction that journalists have to being asked to answer for their paywalls (i.e., explain why content is gated to content consumers). I won’t link to any examples. There are plenty out there, and I suspect you’ve seen them: hectoring replies about why you wouldn’t ask other people to provide work for free (although you might if your life depended on it), or about that fact that it costs good money to produce journalism. But really, this approach doesn’t seem to shame many people to pay as a result.

Given that it’s Twitter, it’s probable that much of that spitting, hissing reaction from journalists is performative, for other journalists’ benefit. But even if we’re aren’t in the middle of a Covid-19 intensified trust crisis as some have suggested, the reality is that journalists (or the media writ large) are still often untrusted and unloved. Blaming the public for not paying to support us isn’t going to help that.

For people who are paid to communicate, we communicate the need for public support very badly. It’s an oddity that newspapers’ pitch to brands is that we know our audiences and have a relationship with them. But yet, in large part, we aren’t making a convincing case that newspapers are vital.

Free to fee

Worse, it misses the point. It might well be the mandate at some publications that paywalls are the only way to make money and, therefore, fiercely defended like some ancient rampart. But if the current crisis has shown us anything, it’s that some information should be free. And in fact, it can materially benefit the publication by being so.

It is demonstrable that some publications are benefiting from publishing Covid-19 coverage for free to the public. The Guardian, of course, is a staunch advocate of the idea of publishing content for free. That said, the media company recently reported significant growth in the number of people who choose to support it. Some of that is, of course, based on other factors like its Crosswords app etc, but the messaging around the need to provide access to free news in the face of coronavirus appears to have landed. Its editor-in-chief Kath Viner said:

“Readership and financial support from readers have grown at record rates during the past two months of the coronavirus.”

The Guardian is also (probably not coincidentally) ranked as the best British paper for coronavirus content according to a University of Oxford study. You can only trust what you can see, after all.

The Atlantic has seen a huge rise in subscriptions, which in part has been attributed to its decision to put its coronavirus coverage outside the paywall. On the latest episode of the Media Voices podcast, its international editor Prashant Rao told us:

“I think there are a couple things that seem to be happening. One is… I think people come to The Atlantic and they read, for example, Ed Yong on science, and they’re just blown away because he is just such a high quality writer and reporter, and somebody who synthesises such complex things, and he’s such a great communicator. But then if it was just Ed, I think a lot of those readers would just come for Ed and leave, and they wouldn’t hit the five story metred limit.”

A similar pattern is evident at The Daily Beast. The decision to put more of its Covid-19 content outside the paywall is considered a factor in its almost 100% growth in sign-ups comparing January to March 15th, and March 15th to now. Crucially, during that time its messaging has gone from one of extolling the benefits of membership to one of survival. Quid pro quo. We provide you with vital information, and you help us to provide it to other people too.

The Financial Times – practically the poster child for subscription success – also made its coronavirus coverage freely accessible. The New York Times placed its coverage of the pandemic outside its paywall and at the same time racked up the highest number of paid subscriptions in a quarter in its history.

Habit forming

There are very many excellent reasons for newspapers not to make their content available for free, even now. It could habituate people to expect it for free (again). It potentially lessens the prestige of the articles for those publications that rely on selling it based on exclusivity. You potentially miss conversions from the fly-by-night readers who bounce in and out of your site.

https://twitter.com/ferrifrump/status/1254831100607807491?ref_src=twsrc%5Etfw

However, there are equally strong arguments to be made that now is exactly the time to make information about the coronavirus – information that could save lives – universally free to access. There are financial benefits, as at the Guardian, Daily Beast, and others above. There is an opportunity to invest in the future by proving to a doubting public that we have their best interests at heart, and aren’t hoarding life-saving information to dole out piecemeal to those who can afford it.

And, can we really say that newspapers are delivering upon the ideals of journalism if we don’t use news as a tool to protect the public? And if the time to do that isn’t now, then when is it?

People say these are uncertain times. One thing that is absolutely, irrefutably true, however, is that it is not the public’s fault if we cannot convince them to support us. We are communicators and this is a critical message that must be delivered along with the news.

Advertising | Perspectives | Revenue

Catch me if you can: Malvertising thrives in high-volume, low-CPM environment

It’s scary out there. Next quarter’s 34% projected contraction for the U.S. economy doesn’t bode well for our industry. The effects of scrutinized marketing budgets and throttled—if not eliminated—advertising spend are already rippling throughout the digital advertising ecosystem. While engagement is on the rise (great), publishers are hindered from capitalizing on this boon due not only to brand safety concerns but also a surge in malvertising and scam ads. Clearly, getting a handle on these bad ads and isolating the serving partner is critical to future growth.

Bad ads threaten publisher recovery

The unfortunate byproduct of today’s troubled economy is the downside pressure exerted on ad spend, which depresses CPMs, effectively lowering the barrier to entry for bad actors. The reality of the situation is apparent; the average number of incidents in a 24-hour period actively managed by The Media Trust’s 24×7 Digital Security & Operations team is up an average 22% month-over-month (April vs. March)—even more alarming when viewed year-over-year, with volumes 35% greater than usual (April ’20 vs ’19).

The composition of the malware threats is also changing. The rapid increase in personal data scams erodes the long-standing dominance of fake installs and uploads.Covid-19 or coronavirus-related scams drive the category. In parallel, while still a relatively small percentage, brand fraud/hijack ads are something to track especially when put into the context of a significantly larger malvertising environment.

Malvertisers are taking advantage of the current environment to steal user data and propagate misinformation around products and services by making it difficult to discern legitimate advertisements from scams. Increased sensitivity to keyword blocking further challenges publishers and their approach to legitimate advertising campaigns. It’s important to remember that an advertiser’s opportunistic campaign, or poor creative, doesn’t mean it’s a scam.

Which are the scams? *

Which poses the question: What is a scam ad?

Slippery slope between a scam and malware

Scam ads contain creative and/or domains that purposefully attempt to mislead and/or extort consumers for financial gain. Criteria for evaluating a scam could be subjective. However, experience provides guidance for activity that could potentially harm publisher reputations and revenue. (For these reasons, our malware taxonomy includes a scam/fraud type).

That said, there is a high correlation between coronavirus-related ad campaigns and scams. In fact, analysis of thousands of these campaigns confirms that approximately 60% of these sketchy campaigns do contain scam content. (Don’t worry, these overt scans are reported to federal authorities to supplement their investigations.) However, it’s a nuanced challenge that requires a thoughtful approach by Ad/Rev Ops teams.

Scam or no scam: Is that the question?

Various initiatives aim to shut down fraudsters—especially in the US and UK. But with thousands of ads and associated domains cropping up on a weekly basis, the scope is large. And, we continue to see abnormally high amounts of web-based attacks. Coronavirus-related ads run the gamut from normal medical equipment supplies to outright predatory shams.

The challenge is simultaneously removing the subjectivity from the process so publishers can serve brand-appropriate content and keep their revenue channels open, at scale. And, flexibility must exist as one’s poorly-designed creative is another’s prohibited bad ad.

To assess your approach to scam ads you need to:

  1. Determine the acceptable, foundational experience (UX) for your audience
  2. Review the percentage of Coronavirus ads trafficking through your environment
  3. Calculate revenue impacts for both campaign termination versus limited/restricted runs
  4. Develop policy and communicate to upstream partners. Policy should cover threshold for Coronavirus ads, examples in increasing restriction:
    1. Allowed, no special treatment
    2. Allowed-bounded, block scams
    3. Limited, only allow ads from designated partners
    4. Restricted, no coronavirus or COVID-19 referenced ads
  5. Monitor and enforce policy compliance via ad quality and security tools
  6. Identify poorly performing vendors and remove from your ecosystem

Knowing your partners makes it easier to catch, isolate and stop bad actors from taking advantage of your users. With an eye to maintaining a positive user experience, premium publishers will block campaigns classified as scam/fraud. Disabling the ability to defraud consumers is a critical step to building a healthier—and more rewarding—digital ecosystem.

In the immortal words of Frank Abagnale, Jr. “Stop chasing me!”. But, like Detective Carl Hanratty, we can’t stop: “It’s my job.”

*(Answer: 1 & 4)
Advertising | Perspectives | Revenue

Revenue or readers: Which one should you choose?

There’s a saying that what’s good for the scorpion is bad for the frog. For a long time in digital publishing, the same was true about advertising. What was good for advertising was bad for the reader.

By flashing auto-play ads, full interstitials, and full-screen scroll over ads, publishers could earn big revenue from ads that demand all of the reader’s attention. But we know that readers hate them. These ad types were also named and shamed in the Better Ads Standards “least preferred ad experiences.”

These ads don’t come without a price. Users may see the ads and they may even get duped into clicking them. However, the power of consumer choice kicks in later down the line. Unhappy users will simply leave these sites and find content elsewhere. By prioritizing pennies in the short term, a lot of publishers cost themselves dollars in reader loyalty and longer-term ad revenue.

The final straw

Either knowingly or not, publishers found the tipping point where the success of a short-term strategy has a worse effect on their long-term prospects. The cost is readers for revenue.

We have measured the effect of this “tipping point” for years. In order to get the balance right between the user experience and monetization, our platform measured 275M sessions over 23 publishers to land on a UI/UX specialized and optimized for digital content. We found that, by analyzing user behavior, you can find the exact point where mobile publishers’ monetization and engagement strategies start to damage your bottom line, even if your superficial metrics, such as CPMs, are going up.

There’s a simple philosophy that works. It’s better that a user reads two stories and sees two ads, rather than reads one story with two ads. This approach increases long-term user engagement as well as loyalty. We’ve distilled some of the tactics from our Publisher’s guide to ad-supported UX design to help media leaders balance readership and revenue in order to fine tune their individual strategies.

If users hate all ads, they really hate mobile ads

First and foremost, we need to understand that no reader likes mobile ads. A Blockthrough report shows us that readers block twice as many ads on mobile as on desktop. Hubspot research says that users find mobile ads annoying or intrusive, and that they slow the page down and disrupt the reader experience.

We know from years of print media, TV, and online content that users will accept ads. When done right, they even love them (wassssup?). This is all because these mediums found the method and message that consumers will accept when it comes to balancing an experience with adverts. For mobile publishers to monetize for long term growth, they need to find the optimum point where users consider their experience a worthy trade-off for the advertising they serve.

More content is the best way to serve more ads

If you take away one thing from this article, it should be that the reader, not the advertiser, comes first. Happy, engaged readers read more content. And they’re more receptive to the ads that accompany that content. Over-exposed bombarded readers are not forced to stay: they can leave the page, find alternative content, or simply block the ads. 

By optimizing your ad density, lazy loading ad impressions, and sticking to approved ad formats, advertising won’t overshadow the content. Adding recirculation and re-engagement features such as swipe navigation and push notifications will guide your users onto more content. By looking at metrics such as recurrency, scroll depth, and page views per user, rather than ad request volume, you can isolate techniques that keep your readers engaged.

Don’t ruin a good story with a terrible ad

There’s a good reason premium magazines get away with so many ad pages, even before the content begins. The ads form part of the experience. These top publishers incorporate the highest quality creatives and hyper-target them to their audience.

The same needs to be true of mobile publishers. It may seem intuitive to use as many ad networks as possible and prioritize high-volume networks that deliver inventory. However, publishers that want to keep their readership should stick to premium networks.

Don’t let bad creatives pull your reader out of the story and drag your brand reputation down by featuring low-quality products or services. By appearing in your publications, ads get a tacit endorsement from you. By limiting this to premium networks, you keep your reader immersed in a high-quality environment. You won’t turn them away for the sake of a higher volume of impressions. Measuring the Average Revenue Per User (ARPU), rather than just page CPMs will show the effect a more premium  ad experience has on your long term revenue.

Every action you take as a publisher has an effect on your readers and your revenue. Adapting best practices and using new metrics to see the effects of individual changes helps publishers walk the most profitable line between readers and revenue. 

Advertising | Featured Post | Policy | Revenue

The dominance and obstinance of big tech platforms

Earlier this month, the French competition authority ruled that Google must negotiate in “good faith” with news publishers to pay them for using news snippets in Google’s News and search products. This is the first European country to enforce the European Copyright Directive, which seeks to ensure that there is a more balanced relationship between content creators and platform aggregators.

The issue at hand is the ability of these aggregators to monetize content that they did not create, to the detriment of those who created the content – often at significant cost. The original value proposition was the delivery of a click/consumer to the content creator’s site. However, over time, aggregators have taken great liberties with the quantity of content they display, often negating the need for consumers to visit the content creator’s site at all.

Snipping snippets

The directive was specifically intended to extend copyright protection to news ledes and snippets. In response to French law that memorialized the Directive, Google announced that it would flaunt the new law altogether by removing from Google News and Google Search the snippet descriptions, news organization brand, and photographs associated with the news articles.

Instead, Google would only display the headline and URL putting the content at a disadvantage to other results. Aggressively but maybe not surprisingly, Google said it would reinsert the snippet description, news organization brand and any photographs if the publishers would give a free license. The French authority ruled that this constituted an abuse by Google of its dominant position.

Coming off the heels of the French ruling, Australia’s Competition and Consumer Commission reached a similar boiling point with big tech platforms. For months the Commission has been negotiating with Google and Facebook on a voluntary code to ensure a fairer balance between news publishers and platform aggregators. And, for months Google and Facebook had been reportedly stonewalling.

Revenue matters

On Monday, Australian Treasurer Josh Frydenberg pulled the plug on talks and announced that the Commission will release mandatory rules in July to compel platforms such as Google and Facebook to, among other things, fairly compensate news publishers for the use of their content. The move could not come at a more important time as over 50 news publishers in Australia have recently closed shop. Meanwhile, Google rakes in approximately 47% and Facebook approximately 24% of digital advertising revenue in Australia.

The impact could be profound, particularly if the platforms respond as Google did in France. Imagine Google search results, news, or your Facebook feed without any reputable media sources. Clearly, quality news content is valuable to the big tech platforms, just as the ability to reach new audiences is valuable to publishers. As the Commission recognized, the current value exchange is not a fair balance of interests.

Big tech, big flex

Of course, these countries’ frustrations with big tech platforms should not be surprising to anyone. Google has a particularly long track record of using strong-arm tactics to achieve and maintain its dominance. A recent example occurred when the European Union was preparing to enforce the General Data Protection Regulation (GDPR), the sweeping data privacy and security regulation.

While GDPR is intended to give consumers greater control over the collection of their data, Google used it as a land-grab opportunity. Just weeks before enforcement began in May 2018, Google announced to industry (and only after journalists were prepared to break the news) their non-negotiable terms for publishers and advertising in complying with the GDPR. Any company which used any Google service or product would 1) need to get express, affirmative consent from consumers for Google to collect consumer data; 2) would not be told how Google would use or secure the data (which would render any consent invalid); and 3) would be liable for any GDPR violation by Google.

Along with several other trade associations representing publishers, we detailed our concerns directly to Google. Of course, it’s not surprising that Google would attempt to deflect as much legal risk as possible. Liability is often a major point of negotiation in any contract. However, Google is so dominant, that this is not a real negotiation.

Perhaps more surprising is that Google did not even entertain the possibility of restraining its massive data surveillance regime. Under the GDPR, companies that collect and use data only on behalf of the website or app (and do not use the data for an unexpected secondary purpose) are considered “processors” of data. Typically, processors are not required to get consumer consent, instead they can rely on other legal bases such as “legitimate interest.”

Reverting to the role of a processor would have placed Google more in line with consumer expectations and it would have made for a much better user experience (e.g. no messy pop-ups asking for vague consent). Instead, Google dictated its “take it or leave it” terms to the industry and consumers. And it’s data profiling would continue uninterrupted. Sounds familiar.

Titanics do sink

The French and Australian rulings could have huge implications going forward. And they are likely only the tip of the iceberg. Many other regulators in Europe and the U.S. are actively looking at the anticompetitive behaviors of big tech platforms. As we noted above, this couldn’t come at a more important time.

As the Covid-19 crisis continues to impact the world, news organizations are redirecting significant resources and personnel to cover the health and economic impact, separate fact from fiction, and hold public officials accountable. More broadly, entertainment companies are working overtime to create and distribute content to audiences “staying at home.” Yet, these content creators are often swimming up-stream to generate sufficient revenue to fund the news and entertainment that consumers love and need because the digital distribution channels are dominated by the big tech platforms.

We’re glad to see public officials pushing back on the anticompetitive behavior of big tech platforms and helping ensure a more equitable balance of interests. As the current crisis has clearly demonstrated: We need quality, reputable, trusted content more than ever.

Featured Post | Revenue

In the battered news industry, are nonprofits best equipped to survive?

Over the past decade, the nonprofit news model has offered some hope while traditional news outlets struggled to keep afloat. Without the need to rely on advertisers and instead making money through fundraising and memberships, nonprofit news outlets have proliferated.

But recently, that hope has flickered. The worldwide Covid-19 pandemic, or coronavirus, triggered a tsunami to batter an already troubled industry. With advertisers losing money and pulling ads from news outlets, media companies are furloughing and laying off workers. And, in some cases, publications are being shut down temporarily or entirely.  

How will nonprofit news outlets fare in the face of this pandemic and the economic downturn that follows? Perhaps better than traditional news outlets. New York Times columnist Ben Smith went so far as to advocate letting the for-profit model fail while supporting nonprofits instead. However, even with booming readership and engagement, nonprofits are concerned about how an economic recession will affect donations and fundraising, and ultimately, their future.

The promise of nonprofit news

Traditional news outlets began wrestling with declining revenues long before coronavirus spread throughout the world this winter. Although digital traffic has either increased or leveled off, advertising revenue continues to fall. Pew Research Center’s most recent State of the News Media Report found that ad revenue dropped by 13% from 2017 to 2018, continuing a trend that began in the early 2000s. 

Further, the number of newsroom employees in the newspaper sector was essentially cut in half from 2006 to 2018. The number of newsroom jobs dropped by 36,510, according to the Pew report.  

But nonprofit news organizations sketched a different picture of the future, offering the news industry a sense of hope. “It may be one way to start to repair the loss of trust in and public engagement with journalism in North America,” wrote University of British Columbia associate professors Alfred Hermida and Mary Lynn Young in Nieman’s predictions for journalism in 2020. 

Journalism philanthropy quadrupled over the past decade, according to a 2019 Media Impact Founders report. Today, more than 230 nonprofit media organizations are members of Institute for Nonprofit News (INN), an organization that began with 27 members in 2009. Over two-thirds of INN’s members have launched in the past 12 years. INN’s members also employ about 3,000 staff, including 2,000 journalists, according to the organization’s 2019 Index. 

Nonprofit strategies

These nonprofit outlets have provided necessary and often resource-heavy journalism that newspapers with dwindling funds might struggle to take on, especially watchdog and investigative reporting. Many nonprofit organizations cater to local audiences or report on niche topics, such as gun control, the environment, or education. 

Certainly, many nonprofit news outlets earn some revenue from advertising and corporate sponsorships. However, these organizations rely most heavily on memberships and donations from individuals, families, and foundations. In the past, foundations provided the majority of the funding for nonprofits. However, the 2019 INN Index found that individuals and families contribute now about 40% of nonprofit funding. That same year, foundation funding dropped below 50% for the first time. 

Even some for-profit news organizations have integrated strategies from the nonprofit model. The Guardian made an operating profit in 2019 for the first time in two decades after pulling off a financial turnaround strategy. This was, in large part, thanks to donations from more than one million readers.

And, faced with furloughs and possible layoffs, Vox Media is trying its hand at soliciting support from its audience. Emphasizing its wish to eschew the subscription model and keep its journalism freely accessible, particularly at this time, the company is turning to readers for support.

Of course, nonprofit outlets have not been the deus ex machina to single-handedly save the news industry. Journalism scholars have pointed out the shortcomings of a nonprofit business model. These include the risk of catering to elite donors rather than publishing stories for a wider audience. Larger nonprofits also tend to fare better than smaller organizations, which may struggle to raise enough funding. 

Enter the pandemic

When coronavirus spread — first to Asia, then Europe, and then the U.S. — it dealt a serious shock to the news industry. Digital traffic to news websites increased significantly, with anxious visitors reading about the growing number of coronavirus cases, troubles with virus testing, and best practices for health and safety. 

Despite this boost in page views, advertisers faced with their own losses have hit the brakes on many ad campaigns. They’ve also intentionally reduced the number of ads on digital news websites due to concerns about appearing next to coronavirus news. Buzzfeed News found that advertisers stopped over two million ads from showing up on news sites in the first three weeks of March. 

As a result, Gannett is furloughing journalists at local newspapers across the country. Euclid Media Group announced layoffs at its seven publications. Some alt weeklies have shuttered entirely. And with economists predicting a global recession, the long-lasting repercussions of the pandemic look dire. 

Traffic climbs

Nonprofits have faced consequences too, although they haven’t been so catastrophic. 

High Country News — an independent magazine based in Colorado has maintained its nonprofit status for decades. Like many other news sites, it has seen a considerable increase in online readership of late.

Although the magazine normally publishes articles on issues relating to the western U.S., HCN assigned a team of about 10 journalists to focus on COVID-19. Stories shared details about the dangers of self-isolating on public lands, how to ethically get outdoors, and how rural doctors face the virus. 

“Every story that we’re putting out on COVID-19 has just blown up. There just seems to be a huge appetite for those stories,” said Paige Blank, associate editor at HCN who is now leading the coronavirus coverage at the organization. 

The number of users in March rose about 48% compared to the same time last year, and the number of new users also increased by nearly 53%. Plus, visitors are not just reading stories, but also becoming more engaged. 

“The tip form has been getting a ton of responses from our readers,” Blank said. “We’re actually able to gauge what people are worried about right now. And we’re using those tips to tailor our coverage for our readers.” 

But will revenue follow?

But whether that traffic and engagement can translate to sustainable revenue is unclear. So far, HCN hasn’t seen an uptick in donations in March. The magazine hopes to harness the traffic by launching an online fundraising campaign in late April, said Laurie Milford, development director at HCN. 

Still, the magazine delayed a 50th anniversary campaign which it expected to raise $10 million this year. (The campaign gala is now scheduled for June 2021.) Overall, HCN expects to see a 25% reduction in general fund receipts in 2020. 

HCN’s predicament is pretty representative of what most nonprofit organizations will be grappling with in the coming months, according to Sue Cross, INN executive director and CEO.  

“It’s a mixed picture, she says. However, the situation “appears quite a bit better than the situation for for-profits,” Cross said. “(I’m) hearing of really significant increases in individual donor support. But some others that had a lot of events/sponsorship revenue or advertising income are hurting… For most, their community position and funding are up now, but uncertainty remains about future grant funding.”

Not all bad news

When it comes to for-profit news outlets like the Guardian, which also largely rely on reader donations, reader contributions could potentially act as a sort of cushion, softening the pandemic’s severe financial blow. However, thus far, it’s unclear how much of a difference reader donations will make.

In March, the Guardian received about  2.17 billion page views, far bypassing its previous record of 750 million pageviews last October. And the increased traffic appears to be increasing financial support from its online readers, according to editor-in-chief Katharine Viner. However, mid-March the Guardian announced a projected a loss of £20 million over the next six months from declining advertising and newspaper sales, which has led to furloughs and pay cuts.

Indeed, many news organizations hope that readers will see the value of their coverage during the coronavirus crisis and, despite the economic uncertainty, donate. Case in point: Chalkbeat, a nonprofit that focuses on education news in cities like Chicago and Detroit, gained $1,700 in just one week after an appeal for financial contributions

Chalkbeat has focused its reporting over the past month on how schools are dealing with the pandemic. Traffic tripled in March, according to figures from editor-in-chief Bene Cipolla. Like at HCN, Chalkbeat readers have been involved in spurring content; by the end of March, Chalkbeat had published 20 stories based on the responses to callouts asking for reader questions. 

Instead of running its annual spring campaign, the organization is treating the COVID-19 crisis as a campaign unto itself. This means sending out weekly appeals, which resulted in significant donations and 21 new members after one week, according to Kary Perez, senior marketing manager. 

Community engagement

In addition, “we have also been approached by lots of people asking us to come to their communities,” said CRO Maria Archangelo. “When they see the kinds of information that we are able to deliver to Detroit and Memphis, they realize what their communities are lacking.”

The future is less certain when it comes to Chalkbeat’s philanthropy partners and major donors, who are dealing with the pandemic consequences on their own terms. Archangelo hopes that donors and funders will realize the importance of Chalkbeat’s coverage once the pandemic has passed, and will continue to provide funding. 

For Chalkbeat, HCN, and all other nonprofit news organizations, it’s difficult to calibrate the full impact of COVID-19. But for now, compared to the rest of the news industry, nonprofits seemed to have maintained a level of resilience in the wake of coronavirus’ brutal blow.

Advertising | Industry-Research | Revenue

Q2 ad rates are at a historic low: This is how publishers should address it

The coronavirus pandemic has caused ad rates to fall to a historic low. On April 3rd, an index score of 37 was recorded, as compared with an index score of 56 at the same time the previous year. The index looks at ad rates publishers are being paid for their ad inventory across the web, normalizes them, and then models the data on a scale from 1 to 100. 

The industry is experiencing the lowest ad rates seen since Thursday, May 12, 2016. That was the last time the index was this low. 

What we’ve seen throughout the last few years is ad rates having a linear improvement pretty much across the board. Ad rates go up and then drop down at the first of the month. Additionally, this oscillating pattern of ad rates occurs month-to-month, quarterly, and annually. This is due to the way marketers run their advertising budgets.

That’s why the rises and drops in ad rates are fairly predictable. They drop at the beginning of every quarter. Then they spike heavily on Black Friday, which is usually when the records are set. Q4 is consistently one of the highest-earning time for publishers across most verticals. 

Looking at 2019 vs 2020 for ad rates, 2020 is a bit lower to begin with. In the second week of March, when the crisis started expanding into North America, advertisers adjusted their budgets and ad rates have continued to decline. 

The impact on programmatic bidding

The industry as a whole is experiencing many advertisers having to hunker down, with whole industries asking for government bailouts. And this is resulting in the lower overall competition.

Example: Around March 13, a major hotel brand decreased its advertising spend on their ad campaign.

Yes, advertisers spending less. But this downtrend in ad rates is also impacting the competitiveness of the programmatic auctions on publishers’ sites. 

These auctions are based on historical bidding data. This means the decrease in ad rates the industry is experiencing might get worse as more advertisers drop out of the mix and competition gets lower and lower.

This decline is compounded by platforms like Google Ad Manager because they will continue to help advertisers understand where they can bid lower and buy ad inventory more cheaply.

Supply and demand are critical factors

For many publishers, supply is at an all-time high. This is particularly true for news publishers that are writing about the coronavirus. In fact, they’re providing more and more ad impressions than they ever provided before. Additionally, other publishers are experiencing more traffic or trying to create more content than they have in the past due to the demands of consumers with more free time or to try to offset decreases in revenue.

This increase in supply is diluting demand even further. There is more available ad space with fewer advertisers bidding. The more ad space available, the lower advertisers will bid. This effect is compounding the negative effect falling ad rates have on publisher revenues.

Ideally what a publisher wants is a limited number of ad space with many advertisers competing for that space. What we are witnessing in the case of the coronavirus pandemic is the exact opposite.

One thing publishers need to be very cautious about right now is increasing their ad impressions (or the ads on the page) to better monetize their sites. By not testing different sizes and locations right now to provide the best competition, publishers are missing out on a strategy that can really turn the tables for them financially during these uncertain times. 

Websites that are leaving the same number of ads, or increasing the number of ads, without testing sizes and locations will likely be the ones most negatively affected as we move through Q2 into Q3.

What will happen next?

As the pandemic gets worse, advertisers will try to stockpile as much cash as possible. Once people go back to work, Q2 is likely to start to improve. Traditionally, the end of Q2 has performed pretty well. So if advertisers are confident that things are going to start to improve, the ad spend will increase, and demand will start to go up.

Until then, publishers really need to be focusing on optimizing the number of ads on the page, their sizes, and locations. Ultimately, this is the only leverage they have to restrict the supply as the demand continues to diminish. This is especially true of sites that are in travel or other niches whose advertisers are most drastically impacted. 

We look forward to economic and advertising recovery in the future. However, it is critical that publishers optimize their revenue in the meantime. And to do so, they need to think very carefully about creating the right ad placements and optimal number of impressions. 

Advertising | Industry-Research | Perspectives | Revenue

An analysis of the spend amidst Covid-19: threats and opportunities

As we approach Q2, we know that advertising spend is going to look dramatically different than it did in 2019.  In large part, this will be part of the aftermath of the novel coronavirus pandemic, which includes nationwide shutdowns and disruptions to businesses. Here at MediaRadar we dug into our most recent advertising spend insights, as well as an analysis of Q2 2019, to better understand what is happening – and what is at stake in the coming months. 

Our deep dive revealed that some industries under duress will likely adjust their advertising spend, or have already begun to do so. Others, however, are seeing their businesses flourish and are marketing aggressively to take advantage.

Industries “at risk”

While all types of businesses are being impacted by the Covid-19 pandemic, some industries are certainly getting the short end of the stick. Last year, in Q2 alone, more than $31B was spent on advertising across all media formats, and over 205k unique brands ran ads. When looking at industries that appear to be the most “at-risk” due to the impact of Covid-19 (restaurants and bars, films, lodging, US tourism, cruises, airlines, auto dealerships, foreign tourism and movie theaters) we saw that last year, these industries had about 12.5k brands advertising, collectively spending just over $2.6B on advertising in Q2 2019.

Restaurants and bars

The largest category in that group, in terms of advertising spend, is restaurants and bars. Last year in Q2 over 4.5K brands advertised, spending about $1.2B on advertising. The majority of this spend (91%) came from major chains, such as McDonald’s, Taco Bell, and Burger King. Now, as dine-in restaurants and bars are being ordered to close or shift to take-out/delivery only across the US, this industry is facing hardship. This crisis will not only change how restaurants do business, but how they promote products, too. 

McDonald’s has already closed its dining rooms and moved all of its services to takeout. Other major chains have done the same. These businesses are not immune to the impact of coronavirus. However, they are also not at risk of going under like smaller local eateries. Instead, Charley Grant at the Wall Street Journal predicts they’re likely to take up even more of the market share after this is over as they will have the ability to rebound in a less-saturated market. 

We have not yet seen any shifts in advertising spend from these large chains, although we are seeing the first wave of brands shifting their messaging. We’ve seen Outback Steakhouse and Panera Bread are promoting their delivery capabilities, while Dunkin has shifted its marketing to support their line of home-products like Dunkin K-Cups, Creamers, Coffee Grounds, etc.

Travel and tourism 

While restaurants can temporarily pivot to take-out and delivery, the travel industry, including lodging, US tourism, cruises and airlines, are facing true hardships. In Q2 of 2019, the advertising spend of these categories was about $850M, combined. 

In terms of companies withdrawing advertising spend, we will be keeping an eye on airlines, in particular. During Q2 of last year, 72% of their budgets were spent on digital advertising, a format that is bought – and canceled – on the shortest of notice. So far, the travel industry has reduced its advertising spend with spending cuts starting mid-February of 2020. Comparing the first week of February 2020 to the first week of March 2020, we saw the travel industry decrease advertising spend by 30%. 

Ads on the rise

While there are certainly businesses suffering due to the changes Covid-19 has brought to our economy, others will benefit from millions of Americans staying home for weeks on end. We analyzed a few of them to see how their marketing has changed in recent weeks.

Streaming services

Subscription streaming services have already seen how quarantines abroad have impacted their business. For example, during the first week of quarantine in Italy, downloads of Amazon Prime Video increased over 2x when compared to the week prior. Meanwhile, Netflix downloads saw a 60% increase in the same time period. 

Armed with that knowledge, streaming services were quick to adjust their marketing strategies once Covid-19 began impacting daily life in the US. According to our analysis, streaming services increased their own ad spend by 155% WoW during the first week of March. Looking at the first week of March YoY, it was a 34% increase in ad spending.  Two advertisers during this surge, Amazon Prime Video and Hulu, spent $29M in advertising in just the first half of March 2020. That is 16% more than they spent during the entire month of February.

eCommerce

The eCommerce industry is also fully aware that many Americans will be spending much more of their disposable income online in the coming weeks. Based on our data, in just one month, eCommerce sites have doubled ad spend, jumping from $4.8M during the week of February 17th to $9.6M in the week of March 9th. 

Companies with e-commerce sites should be aggressive in the market right now, as it’s not only good for business but, more importantly, it’s good for the economy. For example, on Amazon roughly 50% of all sales are from third party sellers, many of which are small businesses. Furthermore, the company has announced they will hire an additional 100,000 employees, explicitly inviting those who were recently let go in the retail and food service industries to apply for one of its open jobs.

Conclusion 

Everyday there are heavy developments and news surrounding the Covid-19 crisis and its wide-ranging impact across nearly every industry. And, as the country grapples with the realities of the pandemic, brands are faced with the question of whether or not they should increase ad spend due to larger audiences spending more time at home, or decrease spending as a way to cut their own costs. Our study underscores that there is not one answer, and brands are moving in both directions as the pandemic continues to affect life across the country.

Advertising | Featured Post | Innovation | Revenue

Quick reflexes and hard news: The media industry’s new reality

The onset of the coronavirus pandemic has galvanized the media industry into action. Even as audience numbers have “skyrocketed,” the advertising revenue that sustains much of the media ecosystem has taken a sharp hit. And this, even as a new batch of advertisers seek to reach a newly minted niche of stay-at-homers, big spenders in retail and luxury markets are suspending buying activity. According to chief executive of G/O Media Jim Spanfeller, the situation feels similar to that following 9/11.

For some publications that are dependent on local advertising – those in local and regional media and freesheets/ alt weeklies – the situation is acute. There have already been some high-profile newspaper closures. Some publishers are already making cuts, and taking drastic measures to keep costs down, while continuing to pump out the news people need.  

Fiscal responsibility

Even some incredibly well-known media brands are being forced to reappraise models that have seemed sustainable in the past, with the Evening Standard freesheet in London cutting its circulation to manage costs as advertisers pull out. Its chief executive Mike Soutar noted that “in the context of currently lower advertising volumes, it makes good economic sense.”

Unfortunately, overzealous, often blunt, keyword blocking, and avoidance have long been an issue around news content, particularly as automation and advertising exchanges delivering “blind programmatic” have taken off. Of late, the situation has only grown more dire. In response, many have called for brands, agencies, ad verification firms, and other companies in the digital advertising supply chain not to block the news.

However, for every publication like Playboy – which is cancelling all print issues for 2020 – there are other media companies launching endeavors in the light of what seems likely to be “the new normal.” Given the uncertainty about whether the advertisers that have decamped will return, coronavirus has effectively pressed fast-forward on trends that have been ongoing for years, forcing publications to adapt quickly rather than relying on a slow tail of dwindling print advertising, news avoidance, and limited growth in subscription revenue.

Rapid digitalization

Jokes about Zoom being responsible for the outbreak aside, the pandemic has demonstrated the extent to which media businesses with events-based portfolios are exposed to mass shutdowns. Even with government support, some events-oriented media businesses are looking at furloughing employees, making redundancies, or shuttering entirely.

It’s been gratifying, then, to watch the speed which publishers large and small have transitioned to digital-only events. UK-based news start-up Tortoise, for instance, used its ‘ThinkIn’s (intimate events for members) as one of its key selling points in the first few months of its existence. Within a week of the (inadequate) UK government advice, it had transitioned to hosting Digital ThinkIns instead.

By doing so it is continuing to provide for its core audience, delivering on what its cofounder Katie Vanneck-Smith has described as a club-like mentality model of membership: “I think people will pay for what they value, and really brilliant businesses and brands have always built their businesses based on consumer insight, understanding what customers want, and then super-serving it.

“But I think, particularly in my industry, if you’re a newspaper – we’ve always had an arms-length relationship with the consumer, and that physical manifestation of the relationship we had actually became in many ways a cultural manifestation. And I think we lost that relationship. We forgot that ultimately we’re there at the service of our reader.”

Meanwhile, UK magazine The Big Issue is primarily there at the service of the seller. The magazine’s content is excellent. However, it is better known for the revenue-share model it operates with its street vendors, in order to lift them out of poverty. Noting that it – and therefore the vendors – will be hit hardest by a lack of footfall in cities, it has prioritized its digital subscriptions. While it is yet unclear about how the revenue share will work in the meantime, it has brought attention to the existence of the digital subscription offer at a time when readers are becoming habituated to paying in that way.

In the states, Gannett, which publishes about 100 local papers and 1,000 local weeklies, is trying its hand at supporting the local businesses that, in turn, are the lifeblood of its advertising. The media company launched a new website, Support Local, which encourages users to support local businesses in their community by buying gift cards for use at a later time.

Subscription trials

There is a separate debate to be had about whether news publishers should make their coronavirus coverage free to access. Many already have. What is undeniable, however, is that a raft of media companies have loosened or dropped their paywalls for the foreseeable future.

While many are motivated by a mandate to keep the public informed during this pandemic, some are doing so because event cancellations mean that they effectively have no product to sell. As sporting events are postponed or outright deleted from schedules, broadcasters with tentpole sports channels have transitioned to retention strategies. In the US, for instance, both the NFL and the NBA have offered free access to their sporting archives in lieu of new content. What this means for The Athletic, which has recently been on a hiring spree, is less clear.

Some brands have spotted the opportunity of opening the vaults to fitness apps and services. Popsugar bumped up the launch of its fitness service Active. While there are still plans to monetize it further down the line, for now the service will remain free in order to act as a lightning rod for audiences seeking at-home fitness classes. Digiday’s Kayleigh Barber reports that Active’s general manager Angelica Marden said: “We’re happy to introduce the people to this platform in this weird time and hope that they will come back to us.”

By doing so, the hope of many is that a newly captive audience will develop a habit. Whether that’s because of appreciation for a service when they needed it, or because they got a taste of the quality that exists behind the paywall, it doesn’t really matter. Once something approaching normality has resumed, the hope is that those habits linger.

Step up

For newspapers the ambition is greater still. Trust in a title is the measure by which audiences choose which outlets to subscribe to. In an age where perhaps only ten international English-language news brands can sustain themselves through subscriptions, this is a golden opportunity for papers to demonstrate their worth.

Even brands that haven’t historically been known for their hard-hitting coverage are stepping up. LadBible, the youth-oriented social publisher best known for its “lads lads lads” school of content curation, was praised by the World Health Organisation for its ‘Cutting Through’ COVID-19 campaign.

For subscription-focused publications, the coronavirus has acted as a Trump Bump or Brexit Bounce in fast-forward (COVID Crunch?), pushing audiences to well-known brands in order to find out the facts about the spread of the pandemic. Bloomberg and The Atlantic have seen spikes in subscriptions. Given that they are among the titles that have dropped the paywall for coronavirus coverage it suggests that audiences are either altruistically supporting titles they believe are fighting the good fight, or that vital news coverage has a halo effect on subscriptions.

The inevitable tide

That said, some of these moves were not entirely unforeseen. Playboy, for instance, was already several steps down the path to repositioning as a “luxury bookazine,” while membership-based journalism projects like Tortoise were already looking to build digital audiences through online events.

Membership schemes were already on the rise. However, coronavirus is providing publishers with a clarion call to which supporters can rally. Even the sports broadcasters were already looking at their stock of past broadcasts in an effort to set themselves apart from competitors.

While there have been a few entirely novel projects – like a mooted magazine about self-isolation – publishers are still playing catch-up with the pandemic, particularly as they scramble to set up remote working and reel from the health impact on their own staff. There will undoubtedly be new business and journalistic opportunities launched over the coming months as the new reality becomes apparent. For now, however the dreadful treadmill of survival is setting an unforgiving pace, and an industry that was already perilously close to the edge is now forced to sprint to keep up.

©2024 Digital Content Next. All Rights Reserved.