Covid-19 Is Changing Ad Auctions, Creating New Opportunities for Brands
This post is the latest in our “Commerce and Coronavirus” series. It will be an editorial focus for the month of April, and you can see the rest of the series here.
Amidst all the uncertainty surrounding the coronavirus pandemic, savvy marketers are finding new opportunities to reach consumers at discounted rates. According to data compiled by Goodway Group, competition within ad auctions has gone down 13% since early March, and win rates are up 54% during the same time period.
The drop in competition within ad auctions is largely the result of brands pulling back on digital advertising during the outbreak. Most experts agree that dropping out entirely is a mistake, since it gives competitors an opportunity to convert new brand loyalists, but continuing to run existing campaigns without acknowledging the current economic and global health realities can be costly as well.
“Brands should reevaluate every go-to call-to-action they have previously seen work effectively and ask themselves if it is still relevant in the current environment,” says Benjamin Diesbach, lead data insights analyst at Goodway Group. “The reality is that the world not only ‘is’ changing; it has changed.”
Brands need to find the right balance between being empathetic and seeming disingenuous in their digital campaigns. Diesbach suggests testing new tactics and channels right now, keeping in mind that the data from any test may be unique to this time, and strategies must continue to evolve.
With sharp increases in impression win rates, brand marketers are suddenly able to reach more consumers than planned — and during a time when many of their competitors are remaining silent.
“For advertisers, it presents an opportunity to achieve increased penetration and resonance with their core addressable audiences. With reduced competition, they can win a higher share of impression opportunities while keeping their bids and CPMs in a reasonable range,” says Diesbach.
Diesbach is seeing what is likely an over-correction in contextually blocking nearly all advertising appearing alongside Covid-19 content. The reality is that a percentage of content can be brand-safe, even though marketers should be cautious about where and when their ads appear next to content related to Covid-19.
Publishers are also seeing an impact, albeit not in the way that they might have hoped. In monitoring programmatic buying trends, Goodway Group’s data science and analytics team discovered that overall marketer demand has gone down for publishers since the beginning of the Covid-19 outbreak. Diesbach says publishers need to be carefully monitoring core metrics, like fill rate, floor price, and CPM, to make sure they can maintain efficiency while keeping brands invested.
Brand advertisers should be keeping a close watch on metrics going forward as well. By monitoring CPM trends across channels, devices, and inventory sources, Diesbach says brands are better able to make the kind of swift optimization decisions that can cost-effectively increase their audience reach and drive more efficient performance.
Goodway Group’s analysis found that video and connected TV are experiencing sharper declines in CPMs than display, but the long-term implications are still unknown, so marketers who want to take advantage of these declines need to act quickly for maximum impact. Goodway Group also found geographical differences. For example, the company’s data shows that Pennsylvania and New Jersey have seen a less direct impact on CPMs than Washington and California. Some states, including Michigan and Connecticut, have seen later drops in their programmatic auction competition.
“Given the pandemic is an unprecedented event, we expect that there will be some degree of market volatility,” Diesbach says. “You may need—and find—a new vehicle for reaching customers as their behaviors change and they adjust to a new normal.”
Stephanie Miles is a senior editor at Street Fight.
