It goes without saying that this year has been unprecedented. It’s to no surprise this is true for the advertising industry as well. Traffic numbers surge during the crisis, while ad spend plunges due to decline in profits across multiple industries.
A bipolar feeling for our publisher partners for sure, as traffic skyrocketed, while CPM’s declined.
At the time of writing, we are approaching the end of the first wave of Covid 19 (we hope). Social distancing measures lax and businesses opening up again. Will ad dollars are slowly trickle back into the system? This has been true within programmatic, as we are seeing numbers normalize over the last few weeks.
With season 2 of the Covid crisis approaching fast… Let’s take a look at these trends and how they are affecting the advertising industry.
- TikTok is facing enormous backlash and bans from multiple countries across the globe.
- Rise of CTV/OTT as most Americans are still working from home.
- The travel industry is still under high pressure financially while enforcing many rules to keep passengers safe.
TikTok
The topic of TikTok is a matter of political counter plays. As the app giant took the industry by storm, it is important to note the influence the platform has on it’s young user base. With the US elections approaching fast, there is no better time to take advantage of this situation to start driving its user base away from the Chinese owned platform. India led by banning the app within its own country. It is estimated that TikTok will lose as much as $6 Billion from this move – and other apps have quickly captured the market share in which the ban freed up.
Also to note, this is not the first time in which politics have gotten in between major tech companies. Huawei serves as a great example for what’s to come for TikTok. This same play was enacted years back when Chinese Government funded phone company Huawei, with rumors in which the Chinese government may use these phones to perform cyber espionage.
We will have to see what the future holds for this platform as they have continuously turned 130% growth in revenue year over year according to Reuters. With its staggering $17B revenue figure, Bytedance (TikTok) has overtaken YouTube’s ad revenues ($15.14B) by more than $1B in 2019.
Only time will tell what is in store for TikTok in the future. Will they be able to keep their lead despite the political plays enacted?
The Rise of CTV/OTT
Netflix and chill has now become the new everyday norm. As a result, CTV/OTT has taken the industry by storm, quickly turning into the hottest thing in programmatic.
The rise of CTV/OTT has been happening over the last few years, as consumers transition from traditional TV to on-demand media sources. Now thanks to CoronaVirus, it has sped up it’s growth. Netflix Alone added 15.8 million subscribers in Q1 2020, double the previous quarter.
OTT ad spend is experiencing a huge influx as the traffic increases. There are many reasons as to why advertisers are spending more dollars on this platform. Precise targeting along with personalized ads allow advertisers to tailor to the interest of the viewer. With no ability to skip these ads, the viewers have to watch the whole length of the advertisement in order to enjoy their content- which is a major selling point for advertisers.
Do take into account that there may be a lot of ad fraud over these streaming services. With video ads paying much higher than other formats, fraudsters are attracted to the new industry’s wild west. With recent ad dollars flowing into streaming services, there has been an influx of fraud in this area.
This all has to do with the lack of validation technology on these platforms. Unlike display and video, CTV/OTT do not run on full web browsers. There will be a future article on everything about CTV/OTT. Stay tuned.
Travel Industry
The whole travel industry has come to a halt due to the epidemic. Since the beginning of the CoronaVirus, many airlines have limited their capacity, or halted operations as a whole. Just recently, a few airlines started operating their flights at full capacity. Even with the backlash of some airlines’ decisions to cooperate at full capacity, it will still take a substantial amount of time for them to recoup the 54.7% decline in revenue they have experienced so far.
Advertising has been greatly impacted by the travel industry downturn. Travel was the 4th largest wallet in the ad industry, accounting for 10.9% of the total ad spend in the US. Unfortunately, almost all of this was wiped clean when the crisis hit.
With the recent domestic spike in COVID19 cases, will full capacity operations be a mistake, or will the preventative measures set in place be enough?
Do not hesitate to reach out to us , our AdOps team can help increase your site’s ad revenue.