We all know that certain businesses and industries have a seasonal component to their ebb and flow, but the introduction of the novel coronavirus, COVID-19, has thrown normal seasonal patterns out of the proverbial window. Need a refresher on the typical seasonal patterns? Here’s A Seasonality Primer that should help you get your bearings.
Brands around the world are adding websites publishing coronavirus content to their blacklists, including legitimate news sources, leading publishers to shy away from providing even accurate, well-researched information. It’s also leading to an overall decrease in ad spend, and therefore an understandable decrease in CPMs and overall publisher revenue.
The first quarter – a slow start
It’s the advertiser’s job to target a specific ROI for their campaigns and then spread out their ad spend appropriately over both the quarter and the year as a whole. Consumer spending also tends to be curtailed in the first quarter as a result of belt-tightening in the post-holiday season. This often leads to brands spending carefully at the beginning of the year until they’re sure they’ve nailed their audience, their message is landing well, and they’re narrowing down their most well-performing campaigns. As a result of COVID-19, however, some publishers are seeing larger than expected decreases, especially if their content is driven by events, travel, sports, or other industries hit hard by social distancing measures as it’s affecting their overall traffic, not just CPMs.
When you compare Q1 data from 2019 to 2020 you can see that there was an overall net decrease in CPMs across the quarter caused by legislative changes, and the announcement of the eventual demise of the third party cookie among other changes in the industry. This year’s advertising spend was a little soft from the beginning, as speculation around the market reaction to COVID-19 was beginning to ramp up.
Where the data really starts to diverge, in the middle of March, can be seen as the market’s direct response to the outbreak of the novel coronavirus in North America. That divergence in March represents only a 15% dip in CPMs for our publishers rather than the seasonal increase expected at the end of the first quarter. Considering that we’re aware of publishers who are experiencing up to 40% decreases over the month of March, we’re happy to say that the measures we’re recommending to publishers to help stave off the effects of COVID are working.
If we hone in on the month of March individually, we can see that the effect of the novel coronavirus on CPMs was quite significant. 2019 and 2020 CPM values diverge right as the pandemic became a more global phenomenon and it became clear that the impact would last longer than anticipated.
Traffic by industry
It’s important to look at the overall traffic by industry as some are seeing major upticks in the number of people flocking to their sites now that consumers are spending more time online from their homes. This may help to offset the decrease in CPM value for some publishers. Notably, there are decreases in all of the industries you’d expect to be hit hard by social distancing rules (Sports, Health and Fitness, Arts and Entertainment, and Travel to name a few).
Likely a reflection of our newly focused priorities, sites that feature content relating to Family and Parenting, Education, Law and Politics, and —perhaps most importantly— science. Publishers can take advantage of these trends by making appropriate pivots in their content strategy to start including value-added content for their audience that might fit into some of these categories.
What’s coming in Q2?
None of us have a crystal ball, but given recent proclamations by current governments in North America that social distancing will be required into the summer months, it’s reasonable to plan for Q2 to shape up a lot like the first quarter has been. According to Forbes, a quarter of all respondents in a 400 media buyer survey have paused all advertising for the first and second quarters, and another 46% have adjusted, or plan to, their spending during the first half of the year.
In the end, the progress of the coronavirus and how the markets will respond are both changing on an hour-by-hour, and day-by-day basis. We are doing our best to ensure we keep you updated as COVID-19 develops. In terms of what we here at Sortable are doing to help publishers, we’re working to optimize your ad stack performance and will continue to let you know of any key features that you can use to combat any decreases due to the pandemic that you might be experiencing. Our analytics provide you with unprecedented insight into the fluctuations of your business and the Customer Success team is consistently and actively monitoring your site performance and analyzing it for ways to improve your monetization.
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Want to learn more? Contact us at team@sortable.com to find out how the coronavirus might be affecting your site. If you aren’t a Sortable customer yet, request a demo and see how our solutions can minimize the impact you’re seeing on your ad revenue, keeping your ship steady in these uncertain times.