Tag Archive: media performance

  1. How will the coronavirus pandemic affect the advertising industry?

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    The alarming spread of coronavirus across the world has transformed society, business, politics and life itself beyond recognition in just a few short weeks. In an attempt to stem the spread of the virus or at least ‘flatten the curve’, governments have implemented measures never seen before. At least a quarter of the world’s population is living in lock down, with severely limited freedom of movement. Consumer behaviour has been forced to change: no longer able to partake in previously quotidian activities such as going to the cinema and out to restaurants, people are turning to media platforms to keep them entertained and informed. This is having an immediate, direct impact on advertisers and indeed the advertising industry as a whole.

    Media consumption has transformed

    With so many people forced to stay at home, the media they consume and how they consume it has undergone a huge transformation The reach of cinema and OOH has declined dramatically; while some thought that radio might follow suit with fewer people driving to work, it has in fact enjoyed a boost. However, podcast downloads have suffered. Of course, TV, digital and social reach has skyrocketed, with their ability to offer entertainment, information and comfort at home.

    The SVOD platforms will be one of the few sectors to benefit

    The video streaming platforms will be one of the very few sectors that will benefit from the coronavirus. Data analysts have predicted that Netflix’s year-on-year subscription growth in the US and Canada will reach more than double previous estimates, rising by 3.8% compared to original estimates of 1.6%. Of course, Netflix now has competition. AppleTV+ launched in November and Disney+, having launched in the US and Canada at the end of 2019, expanded into the UK and Ireland last week, and will roll out in other key European markets in this month. NBC Universal’s Peacock and WarnerMedia’s HBO Max will roll out in the next few months. It seems likely that they will all benefit from the world spending the spring, and possibly beyond, on their sofas. This will be exacerbated by the cancellation of sporting events, with advertisers likely to redirect sponsorship dollars away from traditional TV and into the streaming platforms (where advertising is available) to make up for lost reach.

    Conversely, it seems that the timing is not so good for Quibi, the new streaming platform which focuses on short-form video content for consumers on the go. After all, very few people are on the go at the moment, and people at home for weeks on end are more likely to want something longer and more engrossing.

    Reduced consumer activity will hit most sectors hard

    Unfortunately, most organisations are likely to feel a negative impact. Reduced consumer activity and possibly worries about money in the medium term will impact on sectors as diverse as travel, technology and entertainment. Already many major advertisers have reduced or even halted activity altogether, including Airbnb and Coca-Cola, as well as a slew of travel and tourism brands. Those who haven’t cancelled their advertising spend have moved quickly to change their messaging and their creative and geographical strategies. Many brands have chosen to change their messaging to show support for health services and frontline workers, while imagery of human interaction has declined by 27.4% in social ads. We will see more changes as advertisers seek to adapt to the ‘new normal’, and general anxiety and nervousness around advertising in general.

    With people cooking the majority of their own meals at home, one sector that isn’t suffering is food retail. Supermarkets should take advantage of lower costs to ramp up their advertising in a carefully considered and effective manner. Interestingly, however, is the increased tendency to use local retailers, with people doing what they can to shop as close to home as possible. It will be fascinating to observe whether these behaviours last when life returns to ‘normal’.

    The tech giants and media agencies will feel the strain

    It seems counter-intuitive in a time when consumers will spend much more time online, particularly on social media, but tech giants Google and Facebook are also unlikely to be left unscathed by coronavirus. Analysts predict that Google will see a 15% drop in travel ad revenue in Q1 of 2020, and a 20% drop in Q2. Meanwhile, 30-45% of Facebook’s ad revenue comes from the travel, retail, CPG and entertainment industries, all of which are likely to spend less on advertising in the coming months. It’s not all bad though: it seems likely that many advertisers will seek to move much of their offline spend – particularly from OOH and cinema – into digital.

    Media agencies are likely feeling the strain and this will only become more apparent, not only because of reduced ad spend, but because it’s likely that brands will start to bring services and capabilities in-house as part of their cost-saving efforts.

    What does all this mean for the cost of advertising?

    Back in what feels like another era – the beginning of February – we at ECI Media Management released our annual Inflation Report, providing our forecasts for media inflation in 2020. We noted that coronavirus could affect global travel and local consumption, but no one could have anticipated the epoch-defining effect the virus would have on our modern way of life. And that means, of course, that media pricing will change dramatically in 2020.

    We expect to see hugely increased screen time – likely a double-digit increase, and even higher for news, health and learning websites. As the amount of inventory expands and advertisers limit their spending thanks to pressures on their business, we should expect prices to drop significantly: publishers are already feeling the strain, particularly as brands blacklist many of the terms associated with coronavirus.

    An opportunity for contextual marketing

    With prices dropping and a huge increase in digital reach, there is an opportunity to create highly cost-efficient brand building campaigns. Many brands and third-party ad tech firms have blacklisted keywords relating to coronavirus and covid-19 in order to maintain brand safety; budget previously earmarked for this activity could be pivoted to contextual marketing, which we believe will become a powerful tool in the marketer’s toolbox with the death of the cookie.

    Agility is the key to navigating this crisis

    2020 has swiftly and unexpectedly turned into a year of dramatic change for absolutely everyone, from individual people to entire industries and economies. As we all attempt to navigate these changes from our home offices, one thing is clear: we must remain informed and ready to respond to rapidly changing circumstances. Agility, as is so often the case, will be crucial.

    ECI Media Management has produced a list of ten steps that advertisers can take to mitigate the effect of the pandemic on their media performance – you can find it here. Please don’t hesitate to contact us on if there is anything you would like to discuss concerning your media activity.

    Image: SFIO CRACHO/Shutterstock

  2. With Sizmek fading away – a monopoly is on the rise

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    The demand side ad-server is at the core of most advertisers’ online media tech stacks, delivering real time data on the most important metrics, including impressions by date, hour, viewability, fraud, brand safety, reach and frequency, as well as consumer activity such as clicks and conversions.

    In most regions, an advertiser who wants an independently audited and approved ad server catering to most vendors and formats (while also offering tools for handling dynamic creatives and programmatic media buying) only has three options; Google, Sizmek and Adform. There are some smaller companies around but on a global level in developed markets these companies have a purely nominal market share amongst major advertisers (in our experience).

    If an advertiser also wants its platform to be truly independent of the supply side, then only Sizmek and Adform would be left on the short list, despite Google being the most dominant in the industry.

    Now there are strong indications only one independent will remain on that shortlist, as Sizmek has filed for chapter 11 bankruptcy in the US. What the outcome will be is uncertain; will Sizmek be entirely closed or parts sold off, or re-invigorated?  For the health of the online media industry, we sincerely hope for the latter option.

    But to be practical, this is yet another blow to smaller, independent suppliers in a rapidly maturing and consolidating industry under ever-increasing pressure for efficiency and value creation from the duopoly (or monopoly, depending on your delineations) of the behemoth walled gardens of Google and Facebook. Google has undeniably had the financial muscle to take user friendliness, simplicity, consistency, reliability, packaging, and customer support to heights that Sizmek has never gotten close to. Google’s virtuous circle of intense focus on user value and growing user bases is difficult for contenders to catch up with.

    Sizmek had several different versions of its ad server running simultaneously probably because transitioning clients was a complicated process – subsequently it tried and failed to charge more for the new versions which hasn’t helped its business model.

    But in all of this, are we being unfair to Google? After all, no other ad server has opened up as much to, and received as many accreditations from, the MRC. Vetting by an independent and globally trusted media measurement organization has concluded that Google’s reporting is trustworthy. Still, its market dominance is troubling, not so much what led to that dominance or the abilities it affords it. Too much of the fate of the online media industry is dependent on the will of the giants.

    If Sizmek really falters, where will its clients turn? Those that made a conscious choice for independence and still want to, could turn to Adform (MRC approved) or one of the new generation of growing platforms who are seeking this accreditation. For others we suspect it’ll be the easy but less inspiring way out.

    Image: Shutterstock