Direct publishers hit harder by coronavirus than programmatic specialists, study finds

Dive Brief:

  • Nearly all (98%) media sellers, a category that includes publishers, media platforms and programmatic companies, believe ad sales for 2020 will be lower than their initial projections for the year as the coronavirus pandemic continues to affect revenue, according to a new study that the Interactive Advertising Bureau (IAB) shared with Marketing Dive. More than two-thirds (69%) of sell-side companies are already reforecasting their revenue for the March-June period.
  • Direct publishers are feeling a harsher near-term impact than programmatic specialists, with 77% of publishers saying that clients have asked to cancel campaigns versus 49% of programmatic specialists that said the same. Eighty-two percent of direct publishers said buyers have asked to pause their advertising, compared to 60% of programmatic specialists that said the same.
  • Among publishers, hard news providers are faring worse than non-news ones, with the former twice as likely to see coronavirus content blacklisted by advertisers. Eighty-eight percent of news publishers have seen clients ask to cancel campaigns during the pandemic, while 70% of non-news publishers have experienced the same.

Dive Insight:

The IAB’s latest report, titled “Coronavirus: Ad Revenue Impact on Publishers & Other Sellers,” illustrates the immense strain the pandemic is putting on media publishers, even as their traffic soars. Consumers remain highly interested in information about the coronavirus and staying up to date on a fast-moving story with global implications. Visits to news sites reached a 2020 peak of 523 million the week of March 9, up 30.9% from a week in January, according to Comscore charts cited by the IAB[1].

Yet advertisers, either due to cutting back on budgets or out of an abundance of caution, are canceling or pausing spending at a wide scale, meaning much of that traffic isn’t monetized. Subsequently, many news publishers that were already under strain prior to the pandemic are taking drastic measures to stay afloat. The Los Angeles Times on Tuesday, for example, announced a round of furloughs and pay cuts as the paper has seen ad revenue “nearly eliminated[2]” during the pandemic, Variety reported.

The programmatic sector encompassing supply-side platforms, ad exchanges and ad networks appears to be faring slightly better due to its flexibility and focus on automation, with only about half of companies surveyed reporting clients have asked to outright cancel campaigns. Digital media is generally expected to take less of a revenue blow than traditional media, per the IAB.

Still, sellers across the board could be rocked over the long term and as clients continue to tighten their belts. The IAB in a separate study recently surveyed media buyers — ​namely, brands and agencies — ​and found 73% of respondents said the coronavirus will affect their 2020-21 upfront spend commitments[3]. Roughly a quarter (24%) said they had paused all advertising spend for the remainder of Q1 and for Q2, while nearly half reported having adjusted their ad spend for the period.

Sellers in some ways still seem more optimistic than buyers. The majority of surveyed sellers have not reforecast their Q3 or Q4 revenue, the IAB found. Only 30% plan to reforecast for Q3 and 22% said the same for Q4. However, the IAB noted that the optimism could be due to a lag in information coming from the buy side. It might be offset if economic anxieties around the coronavirus persist further into the year.

Meanwhile, the outlook from buyers has grown increasingly gloomy. Publicis Groupe CEO Arthur Sadoun earlier this week warned that the effects of the pandemic on ad spending will be “unprecedented[4]” and said that the fallout will be far worse than the 2008 financial crisis.

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