IAB Finds Buyers Shorter Than Sellers For Near-Term Ad Market Revisions

COVID-19 continues to hit the advertising industry hard. Seven out of 10 publishers say they are in the process of re-forecasting revenue, with 98% expecting revenue to decline this year.

The study -- Coronavirus: Ad Revenue Impact On Publishers & Other Sellers -- released Wednesday morning by the Interactive Advertising Bureau and fielded between April 1 and April 7. It shows that digital ad revenues for the near-term -- March through June -- are projected to fall between 19% and 25%, depending on the channel, vs. their original plans. Linear TV revenue is now projected to be down 27% and print ad revenue is down 32% from their original plans.

The data shows a disparity between news and non-news audiences. Site visitors to news sites continue to rise -- more than 30%, according to ComScore, but it’s not translating into revenue for publishers. The revenue is being disproportionately affected by campaign pauses, cancellations, new plans, and blacklisting.   

“The knee-jerk reaction of the industry is to apply the brakes, access the situation and re-plan,” said David Cohen, IAB president. “They didn’t have the correct things to say. This is not a buy-now message time.”

Out-of-stock items also seemed to prompt pauses in campaigns. Anecdotally, IAB VP of Research Sue Hogan said the research done with agencies and brands suggests companies producing essential products pause campaigns when they ran low on inventory.

Programmatic specialists -- those that are flexible and ready to optimize media messages -- seem to be faring better than overall publishers.

When asked about their short-term revenue changes, 77% of publishers were asked to cancel campaigns, compared with 49% of programmatic specialists. Publishers also indicate that 81% of advertisers' buys were adjusted vs. 83% of programmatic specialists. Some 82% of publishers also suggest buyers have asked to pause advertising campaigns versus 60% of programmatic specialists.

Publishers are significantly more optimistic than agencies and brands about the extent of digital ad reductions in spend. Among the agencies and brands adjusting spend, which is at about 70%, digital display is seeing a 34% decline, with digital video at 32%; digital audio, 35%; social media, 28%; and paid search 25%.

Among publishers, 69% say they are re-forecasting revenue. Those who are re-forecasting estimate a 25% decline in revenue for digital display; 20% for digital video; 21%, digital audio; 20%, social media; and 19%, paid search.

Publishers are trying to work with agencies and brands to be flexible. Some 67% of news publishers say they are helping by pushing out campaign start dates, compared with 58% of non-news publishers.

Some 52% of publishers say they’re creating different content and sponsorship opportunities that buyers can leverage, compared with non-news publishers. And 48% are creating entirely new content and sponsorship opportunities, compared with 36%, respectively.

Others are working with agencies and brands to create new messages, offering more value, lower rates, and creative services.

Cohen also believes many companies are saving their budget for the back half of the year.

“I think we’re going to see a thrust in the back half of this year causing an influx of activity the likes of which we have not seen in quite some time,” Cohen said. “It’s pent up demand.”

He is not alone. Despite all the doom and gloom, some publishers see a silver lining during the second half of 2020. While some do not have good visibility into the second half of the year, those who think they do believe that cancelations and pauses will be less traumatic in the second half.

“The supply and demand dynamics will likely change significantly in the second half of the year, and as such it is not outlandish to think that prices will rise compared to Q1 and Q2,” he said.

1 comment about "IAB Finds Buyers Shorter Than Sellers For Near-Term Ad Market Revisions".
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  1. John Grono from GAP Research, April 15, 2020 at 6:23 p.m.

    I was intrigued by the lede.

    I didn't realise that physical height was such a factor in advertising spend.

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