In March, COVID-19 felt like a car on a highway slamming its brakes and throwing its passengers into complete shock. The economy felt its impact so suddenly, we didn’t know what was happening.
Largely due to the economic whiplash (especially among travel and events), programmatic ad spend in March was down 15% in March month-over-month.
While there are still many questions left unanswered and the health crisis carries on, the blow of uncertainty has softened. May is now here and there is new programmatic ad data.
Has there been any rebound from brands who initially cut programmatic spending? Who is pouring more dollars into programmatic, and who is pausing their spend?
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Glimpses of Hope Appear in April
While overall programmatic ad spend was down in March due to sudden shifts in the economy, there was some recovery in April.
Facebook, Google and Snap all said that direct response advertisers made up for initial losses. According to Morgan Stanley analysts, the $40 billion app-install market was likely the largest contributor to Q1 earnings. This is not surprising considering mobile video game usage and eCommerce shot up amid this pandemic.
Even though Facebook felt the initial shock in March, ad revenue was flat year-over-year the first three weeks of April. Considering how demand and pricing plummeted, the stabilization of revenue in April came as positive news.
While direct response advertisers fill in the gaps for major publishers, executives still have their worries. The ad tech ecosystem and payment terms are complex.
Advertisers are already postponing their payments to DSPs and some DSPs may not have enough cash on hand to make it through this crisis. “Of the list of concerns that are weighing most on me, that is fairly high up on the list,” said one publishing executive to Tim Peterson at Digiday.
Payments for ad placements don’t get processed for several months after the fact, so even if the revenue is stabilizing now, it is unclear what the numbers will look like a few months from now.
MediaRadar Insights
Even though direct response advertisers helped keep revenue stable for Facebook, programmatic spend was still down.
Between March and April, we saw 8% fewer advertisers using programmatic advertising. This drop largely came from industries that are still hurting the most.
The hardest-hit industries in terms of programmatic spending include:
- Travel (-79% MoM)
- Automotive (-40% MoM)
- Events (-34% MoM)
At the same time, however, others boosted their spend. Industries that saw the largest MoM increases in terms of programmatic spending include:
- Education & Training
- Technology
- Toiletries & Cosmetics
All of these categories were up more than 35%.
When we look at specific companies, the brands who have increased their programmatic spending the most include:
- Slack
- Electronic Arts
- GrubHub
- Bank of America
Companies who decreased their spend the most include:
- SmileDirectClub
- Coca-Cola
- Harley Davidson
- Royal Caribbean
- LVMH
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