The digital advertising market has been hit hard by the global ad spend slump, triggered by an ongoing global pandemic.
While publishers are enjoying record web traffic, ad spend has fallen off a cliff. Even the prestigious The New York Times has forecast a 50% to 55% slump in ad spend in the second quarter, compared to last year. Journalism jobs are being cut everywhere, including Buzzfeed shutting down it’s Australian (and UK) operations a couple of weeks ago, and premium web publisher Quartz shedding 80 jobs.
In May, global display advertising spend fell 30%, while key categories such as health and fitness, food and dining, and entertainment all plummeted by more than 20%.
And while we all roll up our sleeves and work our hardest to ensure the next two quarters of digital advertising activity are not as negative, bigger picture developments are painting a rosier picture.
Restoring consumer trust is driving growth
We are by now all too aware of the recent and far ranging abuses of user trust in our industry. These breaches have negatively coloured the consumer’s view of digital advertising. Data breaches, fake news, ad fraud, and creepy surveillance style tracking have left a bad stain on the ad tech market.
But moves are already afoot to change things for the better. We’re seeing players across the ecosystem pushing the sort of transparency that will put the minds of consumers and regulators at ease – we can be trusted with your data. It may take time to work through into and across the industry, but necessary change is underway.
Tighter standards mean that the good players (the majority) can grow and thrive within a clear framework, and the few bad players (the minority) will be held accountable if and when they breach those standards.
There is opportunity in the Open Web
As programmatic continues to become the preferred method of transaction for digital, we’re busy developing identity solutions that will place open web programmatic ad inventory on par with the levels of addressability seen in the walled gardens. Now that we’re past the initial shock and headlines that the ‘sky is falling’, we’re already seeing the green shoots of progress.
Players from across the industry are collaborating in a way not seen before – actively engaging with organizations such as IAB (DigiTrust and Project Rearc) and Prebid.org. New ID solutions are already seeing significant traction.
As budgets continue to shift into newer formats like mobile app and connected TV (CTV), creating a solution that is applicable for all formats, and future proofed, is high on the agenda. Again, demonstrating a level of forward thinking that has been somewhat missing in our industry to date.
The focus on privacy compliant ID solutions is putting publishers back in the driving seat. They are the main point of contact with audiences, and work hard to build relationships and trust. A privacy-first approach to customer data is crucial to ensure this trust is maintained.
We’re seeing increasing appetite from advertisers and their agencies to engage with premium partners and the benefits that brings in terms of brand association. As bidding becomes more crowded within walled gardens, by contrast, the Open Web is limitless.
The industry is looking to develop a ‘real’ solution versus a temporary band-aid. We’ve realised we can’t have a short-sighted view; we have been granted a huge opportunity to restore consumer trust and conduct advertising the ‘right’ way – with consumer interests in mind.
Choose your technology partners carefully
Tech vendors often get a bad rep, and in some cases deservedly so. But there are many good players out there, and as with any business decision, you should choose wisely. If you’re a publisher – ask questions of your SSP partners. What steps are your partners doing to protect your interests – now during the COVID crisis, and longer term?
At PubMatic we’ve listened to the concerns of our publisher partners about the financial health of buyers and the worry of default, and taken steps to allay those fears. We’re paying all our publishers early throughout this second quarter and we are offering a payment protection plan that removes sequential liability for publishers. So if a demand-side platform (DSP) goes bust, PubMatic will still cover payment.
And if you’re a media buyer, ask questions of your demand partners. What are your downstream partners doing to ensure you’re getting maximum working media from your investment? What steps are they taking to ensure they’re working with transparent, reputable vendors and suppliers? And what steps are they taking to ensure their partners are putting consumer trust and privacy front and centre?
By asking the right questions and acting decisively if we don’t like the answers we’re hearing, we’re demonstrating that we can self-govern. We’re building a better ecosystem, and everyone stands to win.
Originally Published in AdNews