COVID-19 and Programmatic Advertising

During this period of uncertainty, many advertisers and brands are wondering how to speak to consumers, or if they even should have a conversation with them at all. As people turn to different media channels to get a break from the news and consume content, with rising inventory and lowered demand, it’s an opportune time to get the most out of programmatic investments.

With programmatic advertising, we can effectively reach data-driven audiences at scale at efficient CPMs through a variety of channels. At the same time, we can steer clear from hard news about the disease spread and infection rates, as well as other COVID-19 content through brand-safety controls. Within the programmatic landscape, PMG has seen several trends across different verticals, both for our brands at PMG and the entire ecosystem. 

With consumers spending significantly increased amounts of time online, programmatic inventory availability has skyrocketed. The channel most impacted by increasing inventory is display, with a large percentage growth in inventory, which leads to a decrease in CPMs. Partners are reporting various increases in the range of 19-36% across both desktop and mobile ad calls.

Another space that has seen inventory growth is Connected TV and OTT. With people at home and eager to fill their time with streaming content, costs decrease as inventory increases substantially. From March 16th to March 22nd, Connected TV usage in the U.S. grew by 28% according to Nielsen, and March 23rd to March 29th showed a similar trajectory with another increase of 5%. Video management company Beachfront has seen an increase of 105% in Connected TV ad calls.

Native advertising has seen slower and less significant changes than display and CTV inventory, but gradual month over month declines in costs, and increases in inventory. Bidtellect, a leading native DSP, is reporting a 9.59% decrease in average impression costs from February 2020 to March 2020, and an even more significant decrease of 17.1% from January 2020 to March 2020.

Programmatic streaming audio inventory has been volatile throughout the month of March and has not seen the drastic CPMs decreases that other channels have. Audio categories with the biggest growth are podcasts and educational content. Music listening has been steady and unimpacted. For a deeper dive into the audio landscape’s COVID-19 impact, see our POV here. 

What do these increases in inventory mean for brands? Well, the programmatic landscape has become extremely efficient, which means that inventory opportunities previously not available for brands are available now. Typically, inventory carries a premium cost for Connected TV; now, costs make inventory more accessible to advertisers to create high impact and engaging ads. 

As both created content and consumer time spent online rapidly increases during COVID-19, display becomes increasingly more efficient. Across PMG clients, we have seen an over 40% decrease in display CPMs from the beginning of March until the beginning of April.

It’s an effective time for brands to invest in programmatic advertising, both for more tried-and-true formats such as native and display, and for newer formats like Connected TV and streaming audio. Adoption is less widespread for these newer formats, and brands have the opportunity to break into emerging markets at discounted rates. Right now, consumers are highly engaged in ad-supported content. Advertisers have the opportunity to reach these engaged consumers by leveraging programmatic media. 

Another trend for programmatic advertising is that although the amount of available inventory is incredibly high, the actual demand for inventory is down. As brands take losses in revenue and need to furlough or lay off employees, budgets are cut. Almost half of brands have decreased ad spend for Q1-Q2, and nearly a quarter have cut Q2 ad spend altogether.

As a result, a recent survey by Digiday shows that 88% of publishers expect to miss their revenue forecasts for the year because brands aren’t able to invest like they used to. This presents both a challenge and opportunity for brands. While budgets are tighter, those that are able to continue investing in programmatic advertising are seeing less competition in auctions, leading to greater efficiency and a larger share of voice. 

With the current state of our world, brand safety is more important than ever. With 15 billion web pages per month talking about COVID-19, it is a daunting task to block COVID-19 content and prioritize brand safety. With the targeting granularity available in our demand-side platforms, programmatic advertisers can block any content related to layoffs, disease, outbreaks, or travel restrictions. Brands don’t want their messages to appear next to COVID-19 content, as over half of consumers have reported some level of concern around brands advertising on COVID-19 content, according to Integral Ad Science.

Google has offered a guide of what to block in order to ensure brands are not present near COVID-19 content, including blocking the Tragedy sensitive category, blocking several health categories, and using brand-specific negative keywords.

IAS, DoubleVerify, and Oracle have all sent through best practices for avoiding COVID-19 content. Fortunately for brands in the programmatic landscape, all three of these major brand safety partners are already capturing COVID-19 in their standard blocking segments. 

However, there is some content that mentions coronavirus as brand-safe — positive stories of people coming together, communities helping each other, and family-friendly activities for being at home. An estimated 26% of coronavirus content is actually brand-safe; by working with the leading brand safety vendors that contextually analyze a page to determine sentiment and emotions, programmatic advertisers can separate the good from the bad.

PMG advocates to let programmatic advertising do what it does best — reach data-driven audiences at scale in a strategic way. Programmatic advertising allows brands to enter a market at lower costs and utilize the applicable brand safety restrictions at the same time. With people spending more time online and at home, programmatic advertising is able to go farther and work harder than ever before. 

Therefore, it makes sense to take advantage of this tool to reach more consumers. The trends are here with fewer barriers to entry in terms of cost for premium and newer channels like Connected TV and streaming audio, and we have an opportunity to be an early adopter of channels with thoughtful messaging.

Programmatic advertising’s unique selling point has always been data-driven targeting, efficient impressions and results, reaching only the engaged audience a brand desires, and being adaptable, optimizable, and measurable in real-time. Programmatic advertising has proven to be an effective way to capture new customers on a variety of unique channels, in addition to remarketing current customers. This hasn’t changed in the time of COVID-19. Programmatic is measurable, testable, and quick to activate. In a time when brands are looking for real-time measurement, programmatic advertising is a great fit for continuing to message the brand to qualified audiences.