As States Reopen, Conversion Patterns Point to Early Programmatic Recovery

The coronavirus crisis has hit the programmatic market hard, and the industry is still coming to terms with the fragile position it’s in. Despite fears that the programmatic space may never be the same, new data paints a more optimistic picture of what the next few months might look like.

“Since late March and early April, when the curve of new cases for Covid-19 began to flatten, we have observed shifts in key trends focused on programmatic competition and pricing,” says Benjamin Diesbach, lead data insights analyst at Goodway Group. “From a competition standpoint, we have seen a mostly steady uptick in bidders per auction since a low in early April, as well as win rates showing signs of normalizing back down closer to pre-Covid levels.”

The data that Goodway Group uncovered suggests that some marketers have begun to increase spend and re-enter the programmatic marketplace. Additionally, when looking at the regional level, Diesbach and his team are seeing that CPMs in many of the hardest-hit states have bottomed out, and they are starting to move closer to previous levels.

The impact on certain states reopening is still being felt, and while medium-to-longer-term dynamics remain volatile, Diesbach is seeing early short-term signs of programmatic marketplace recovery.

“In the short term, we expect that marketers will cautiously either re-start or increase their investments as the country continues to recover from the Covid-19 pandemic,” Diesbach says. “With that said, many brands have been extremely challenged by this pandemic and will likely be taking a fluid approach to their strategies as they monitor their own business metrics.”

This fluid approach is likely to create continued volatility in the short term. Longer term, Diesbach and his team expect the volatility of marketplace dynamics to diminish as the programmatic marketplace re-gains and possibly exceeds its previous scale prior to Covid-19.

“Longer term will be a ‘new normal’ for marketers, publishers, and consumers alike,” Diesbach says. “This will be sure to leave a lasting impact, hopefully for the better, on the programmatic marketplace.”

Some of the biggest trends in programmatic ad spend are obvious—such as brands re-evaluating their strategies as consumers pulled back on discretionary spending—but others are more nuanced. Looking at conversion trends, for example, Goodway Group found that time and day-of-week trends for conversion completions have shifted from midday weekend to morning weekdays. Although Sunday has never been a strong performer, conversion performance has declined even further on Sundays since February. According to the Goodway evaluation of conversion performance, retail conversion patterns are signaling that a recovery could be happening sooner rather than later.

Marketers can leverage these insights by re-evaluating their time-of-day and week targeting criteria, and potentially shifting spend from midday weekends to midweek mornings.

As for the all-important CPMs, which are still much lower than pre-Covid levels, Diesbach says his team has observed an interesting pattern with pricing metrics that highlights some of the marketplace volatility that we can continue to expect.

“Both floor prices and CPMs leveled off during the first half of April after experiencing steep declines during the back half of March. Since mid-April, however, floor prices have begun to moderately trend downward,” Diesbach says. “Additionally, CPMs experienced a steep decline from April 13 through April 20, when they reached a new low, but have since shown signs of rebounding off that low. This suggests that marketers are hyper-focused on efficiency as they spend marketing dollars during this challenging time.”

Going forward, Diesbach recommends keeping a close eye on cross-channel consumption patterns to see how consumer behavior continues to evolve as well as inventory vertical trends and regional or state-level patterns around pricing.

“Even as the country continues to recover, we expect continued volatility around pricing and encourage marketers to monitor these trends closely,” Diesbach says.

Stephanie Miles is a senior editor at Street Fight.