On 11th March, 2020, the World Health Organization officially announced Coronavirus (COVID-19) to have reached pandemic status.
Though the direct effects of the disease pertain to people’s health and well-being, industries across the world are experiencing a remarkable decrease in revenue and consumer participation. Contributing factors for this include general paranoia amongst consumers and the rate at which the disease has spread worldwide.
The ad tech industry is also hit by COVID-19 in several ways and will continue to reel from the impact in the upcoming months.
For instance, after Rudy Goldbert, NBA athlete playing for the Utah Jazz tested positive for COVID-19, the NBA season was suspended immediately.
Similarly, many sporting events are being cancelled or postponed, resulting in called-off sponsorships between advertisers and marketers.
Visible Disruption To Publisher Revenue
Some publishers have begun to experience the negative impact of coronavirus in unprecedented ways. Even if not impacted still, the general consensus amongst publishers remains that COVID-19 will result in eventual advertising revenue decline.
On March 2nd, 2020, Mark Thompson, President and Chief Executive Officer of The New York Times Company spoke at the Morgan Stanley Technology, Media, and Telecom Conference. The subject matter related to the New York Times possibly experiencing a decline in revenue in the upcoming months. In the conference, he spoke the following:
“We’ve seen no adverse impact on subscription growth, or on the expected rise in subscription revenue, which remains strong and consistent with the guidance we gave in our most recent earnings call. However, we are seeing a slowdown in international and domestic advertising bookings, which we associate with uncertainty and anxiety about the virus. We therefore now expect total advertising revenues to decline in the mid-teens in the current quarter, with digital advertising revenues expected to decline 10%.”
COVID-19 Impacting Ad Tech Giants
Coronavirus’s negative effects have only added to the list of issues that the ad tech industry is dealing with right now. While the industry had only begun to understand how to survive in a cookie-free environment, a newer and unexpected challenge in the form of coronavirus has rendered them confused.
For example, Alphabet, Google’s parent company is expected to suffer from major advertising revenue loss. Loop Capital Markets analyst Rob Sanderson predicted a 15% year-on-year decline in Google’s travel ad revenue due to COVID-19.
To put this into perspective, let’s look at a few numbers.
In 2019, eMarketer predicted digital ad spending on travel to grow by 19.3% in 2020, reaching $13 billion.
Also, according to Laura Martin, analyst at Needham, travel ads accounted for approximately 10% of all search ads in 2019. This is equivalent to $10.7 billion of Google’s $98 billion search revenue. Such will be the massive loss to this ad tech giant because of coronavirus.
In a similar fashion, ITV has predicted a 10% decrease in advertising revenues due to the same reasons.
Anurag Rai, Senior Ad Ops at AdPushup comments on the situation, ‘people’s participation in travel and going out in general will impact revenue in the upcoming months. For example, Speisekarte.menu, a German website for finding restaurant information is experiencing a 35-40% revenue drop due to people refraining from eating at public places.’
‘Coronavirus’ Steadily Climbing The Top Of Keyword Blacklists
As we have covered on our blog before, publishers often lose revenue to keyword blacklisting. Some of these keywords include the obvious ones such as ‘kill’, ‘sex’, ‘injury’, etc.
But the word ‘coronavirus’ has become single-handedly responsible for publisher revenue decline in the past 2 months. In February, according to Integral Ad Science Data, ‘coronavirus’ became the most commonly blocked keyword after ‘Trump’.
Since the topic of COVID-19 is buzzing across the world, this seems to be a lucrative time to create content around it. But keyword blacklisting of ‘coronavirus’ has rendered publishers with limited opportunities to monetize this content. Advertisers are not willing to pay for impressions on this content, thus resulting in lower CPMs for publishers.
Cancelled Events Hurting Publishers’ Opportunity To Diversify Revenue
The first two quarters of the year are when most publishers were looking forward to participating in events and increasing revenue earning opportunities. Publishers have to book these slots in advance for ensuring participation.
“More than 90% of the budgets allocated to event spending are spent on events that happen within the first two quarters of a year, according to Mediaradar data.”via Digiday
However, most publishing and marketing events either stand cancelled now or are being considered to be hosted on virtual platforms.
In any case, publishers are struggling with the challenge of insurance coverage for these cancellations. It is also an opportunity denied for making more connections and establishing business partnerships.
A Ray Of Hope
All negative developments aside, publishers are still trying out different ways to improve relationships with their consumers, even if monetization opportunities have been sidelined.
Coronavirus has provided publishers with an opportunity to create specific content around it. Consumption of this content is dependent on the curiosity surrounding this topic.
As reported by Digiday, publishers are observing a boost in newsletter subscriptions and podcasts.
For example, the Guardian, whose revenue model comprises of financial support by readers is avidly creating content on coronavirus. In their health podcast Science Weekly, the publisher giant introduced extra episodes on the virus. According to the news publisher, this episode is one of the most highly listened to episodes in their series.
On March 5th, Acast, the most popular podcast network reported 875,000 podcast listens related to coronavirus.
These factors are helping publishers in increasing pageviews, thus building more trust-worthy and interesting content for website users to consume.
Some More Interesting Reads
- Coronavirus Underscores The Need For An Ad Industry Crisis Response Team
- With uncertainty the new norm, the coronavirus rattles the media industry