At the end of the first quarter, we discussed the effect that the pandemic has had on publishers in Q1 and, as promised, we’re here to keep you updated regarding current trends as we dive into our second quarter. We’ll keep the updates coming as long as COVID remains a major player to make sure you’re in the loop about the trends we’re seeing and so you can take those insights and make informed decisions to better manage your business.
Based on normal seasonality patterns, we would expect CPMs to be down because we’re in the first month of a new quarter, but encouragingly—especially in light of the effects of COVID-19 on advertising spend—CPMs have started to recover over the course of April.
As we can see in the graph above, CPMs hit their lowest point on April 1, 2020 after a steady decline as the virus spread globally in March. Importantly, CPMs then began a gradual increase over the course of the month of April. The total recovery so far represents a 20% increase in CPMs—which is good news for everyone.
CPMs by Vertical
Taking a look at the industry data, there are some industries who are faring better than others. Perhaps not surprisingly, Family & Parenting, and News are seeing good recovery across April, along with Style & Fashion, Business, and Health & Fitness as online shopping becomes a force to be reckoned with and parcel delivery services like Canada Post, USPS, FedEx, and Purolator are seeing unprecedented volumes.
Interestingly, industries that we would expect to be doing quite well during global stay-at-home orders (such as Education, Personal Finance, and Technology & Computing) are seeing major declines in CPMs. This is likely due to an overall increase in traffic, with no net change in ad spend by brands, which dilutes the CPM value.
What does this mean for the rest of Q2?
Like everyone else, we don’t have a crystal ball and therefore wouldn’t want to set any hard and fast rules as to what May or June will hold for COVID-19. Indeed, because of the ever-changing nature of the virus and the global fight against COVID-19, the future of global markets and advertising spend are similarly unpredictable.
That being said, with the generally positive trend in social distancing measures being implemented across the globe and many nations showing a flattening of their outbreak curves, we are cautiously optimistic that the recovery of CPMs will continue into May and June.
The true test of recovery in a post-pandemic world could be whether or not June and July show the kind of strong CPM values we would expect based on regular seasonality. Those months may be ‘too close’ to our current situation to be truly indicative, so we’ll also be keeping a close eye on September as a hallmark of a return to ‘business as usual’— as consumers begin to start looking forward to the holiday season, including Black Friday, Thanksgiving, and Christmas.
We may not be out of the woods just yet, but the numbers in April are providing a good reason to believe that there is light at the end of this particular tunnel.
Hang in there,
The Sortable Team
P.S. We’ve been looking for a way to help more publishers during this trying time and are partnering with Digiday to do just that. Take a look!