Competition for programmatic bidders declined beginning in mid-February, but began to increase in early April.
On April 16, there were 663,260 COVID-19 cases in the United States and 13.30% bidders per auction for programmatic buying. The uptick occurred as COVID-19 cases began to flatten, according to Goodway Group data.
Programmatic win rates -- the impressions bid divided by the impressions won as a percentage -- saw a steady increase as COVID-19 cases rose and the overall market competition fell, according to recent data. Now data suggests the market may have found its “temporary bottom.”
COVID-19 continues to have a significant impact on core dynamics of the programmatic marketplace, as consumer behavior shifts and brands adjust their media strategies in response to the pandemic.
The win-rate trend that Goodway Group tracks shows initial signs of leveling off in the past week as the curve of new COVID-19 cases flattens. When pandemic cases reached 394,156 on April 7, win rates peaked at 76.80%. Since then, the win rate has fallen to 54.79%, according to Goodway Group, which closely is tracking trends.
“As the curve began to flatten in early April, we are seeing win rates leveling off,” wrote Benjamin Diesbach, lead data insights analyst at Goodway Group, in a letter to Data & Programmatic Insider.
Diesbach explains that the data suggests marketers may have reduced their spend more heavily as cases began to pick up in March, which in turn led to less competition in the market and subsequently, higher win rates for active participants.
The more recent leveling off of the win rate increase suggests that programmatic marketplace demand may have found a temporary bottom and marketers are beginning to increase spend or re-enter the market.
Goodway also saw a spike in programmatic floor prices in late March, followed by a decrease as COVID-19 cases increased.
Further into April, programmatic floor prices appear to be leveling off. Moderate increases in pricing and competition in CPMs across channels suggest that advertisers may be slowly coming back to market as the COVID-19 curve begins to flatten.
“The data suggests programmatic floor prices began to decrease starting in mid-March as the daily rise in new cases became more significant,” Diesbach notes. “Since early April, we have seen decreases show initial signs of leveling out, which coincides with the flattening of the curve of new cases.
This could indicate that publishers were responding to less marketplace demand by lowering their price floors to improve the overall fill rate for active traffic on their site. The leveling off of this trend since early April suggests that publishers are beginning to see more programmatic demand on their sites, which has allowed them to stabilize their price floors.”
Programmatic has faree better than standard buying during the pandemic. The Interactive Advertising Bureau (IAB) noted this trend in their recent sell-side report.
Diesbach notes that given the real-time, auction-based mechanism that programmatic is bought and sold, it offers buyers price and commitment flexibility that is not always possible on other channels.
In addition, many upfront media such as live sporting events have been delayed or postponed indefinitely for 2020 due to COVID-19. This is also true for potential upcoming show seasons in the fall since production has likely halted.
These impacts potentially make traditional media either unavailable, of lower potential value, or of higher risk. The biggest examples include the Olympics, NBA and Champions and Premier League, among others.
Regional and local data trends vary. Goodway data suggests that major metropolitan areas have seen a moderate amount of change while the South-Central region has seen less change.
When asked why CPMs fall as cases rise, Diesbach wrote there are several reasons, but in general CPMs in programmatic are a function of advertiser demand and publisher supply.
As cases rose, brand spend in programmatic, similar to most other channels like search, fell due to the unique business challenges. Less overall brand participation in the marketplace leads to reduced competition, which puts downward pressure on CPMs.