As local news publishers get beat down by the pandemic—especially ironic considering how essential their regional coverage has been—the saga of publicly-traded Gannett is particularly traumatizing. The share price for the large portfolio of local news outlets dropped as low as $0.63 last week but bounced back to the 90-cent range (as of this writing) thanks to the announcement of additional cost-slashing and a “Poison Pill” investor measure aimed at stopping a hostile takeover. Eyes seem to be on private equity firm Apollo Global Management, which already owns $1.8 billion of Gannett debt.
Apollo is about the most stereotypical private equity firm you can imagine, famous for tightening staff belts to the point of asphyxiation and then extracting giant management fees. Some publisher experiences being owned by private equity firms—many of which don’t specialize in digital media or publishing at all—have been downright horrifying. As publishers expect 30%-50% dips in ad revenue for Q2 2020 as the crisis lingers on, they may need private equity to come to their “rescue”... At what cost?
At the same time, private equity ownership doesn’t need to be a curse, especially when more media-focused groups are appearing. And in a PubForum Santa Monica Keynote, Next Management Partners CEO Jimmy Hutcheson mentioned that the revenue team can have a unique relationship with its investors because… Well, they tend to be the main source of money coming in! Post-coronavirus, this could spur a new role for the revenue team—defender of the publisher brand.
And local news might have one other last-ditch option—a federal bailout.
Insurance Against DSP Defaults
As we’ve already noted in these hallowed emails, publishers are bracing themselves for Sizmek-all-over-again as DSPs and demand partners default on payments because of challenges with the pandemic—basically, leaving publishers holding the (empty) bag. It seems OpenX has come up with a nifty way to put publisher minds a bit at ease: according to AdExchanger, the SSP sent a note to clients about its new credit insurance to protect against DSP payment defaults. Apparently this line has been in the works for six months, but it couldn’t come at a more pertinent time.
On the Reddit ad ops board, there were whispers about a sudden spike of ads coming through OpenX. OpenX reportedly had no DSPs blocked, so this was not new demand. However, other SSPs and exchanges may have cut “riskier” DSP off or limited their spend, encouraging the snubbed to prioritize OpenX. Seems a matter of time before other SSPs follow suit to get more spend flowing through their pipes.
Consumers Recognize Brands’ Good Deeds
While we’ve been focused on how the noticeable dip in ad spend during the pandemic is causing publisher revenue pain, it’s a good question how the COVID-19 crisis is changing user perceptions of advertising. An online focus group conducted by AI-driven research platform Remesh found that 74% of participants were “more likely to buy from a brand if they are running ads that show how they are helping underprivileged and those in need.” Around 80% also said that in this time when people are “scared and fragile,” they were looking for “positive, caring, and inclusive” advertising.
At Cannes last year, every brand and their grandmother wanted to jump on the purpose-driven marketing train—”How can we be like Nike?” thousands of creatives cried at once. Well, the opportunity is tragically here, and certainly, some brands are diving in. Advertisers may not feel like they can market products or services right now, but they do need to keep their brands in the limelight—and marketing their charitable efforts as the world suffers is a positive way to do it.
And guess what—it puts revenue in the pockets of their key publisher partners while spreading goodwill. In fact, publisher sales teams should be seeing how they can partner with their top advertisers to spread awareness.
Gaming Is Media’s Bright Spot
Amid the government’s stay-at-home orders, consumer media consumption is steadily increasing with people turning to online news and entertainment—and even to TV—now more than they have in probably like a decade. Mobile usage is also skyrocketing, with time spent up 70%, according to InMobi. But as we’ve mentioned in issues of AdMonsters Wrapper in the recent past, digital media advertising spend just isn’t on par with all this influx of traffic. Not even for mobile. According to eMarketer, the increase in time spent is not easily monetized and many advertisers are not in a position to buy the swelling impressions, which has depressed CPMs.
There is a bright spot though. There’s another place where people are spending an outrageous amount of time—gaming. For mobile, the gaming boost opens a gateway for game publishers to advertise in one another’s apps. And with people buying and playing more games on their consoles and computers last month, the gaming industry decided to hike up TV ad spend by $5.3 million over February—with Nick, Adult Swim, Comedy Central, USA Network, TNT, ESPN, MTV and NBC receiving the lion share.
In a recent AdMonsters article, we wrote about the esports segment of gaming and its ability to remain relatively unmarred during these harrowing days despite the decline in brand spending most everywhere else. While live sporting events are on an indefinite pause, sporting leagues like Formula1, NASCAR, NHL MLS and the NBA are all following the eyeballs and transitioning to esports events with sponsorship and players facing off against esports gamers. The events have buoyed sports networks like ESPN, NBC Sports and FS1—for now—and since gaming spend is up across the board, other networks are also seeing some of those dollars.
For digital media publishers, without a TV network or robust video offering on deck to take full advantage of this opportunity, it might be high time to consider expanding gaming coverage—particularly esports—as some publishers like The New York Times, the Associated Press and The Guardian have done in recent years. For the time being, esports is sports and gaming is everything.
Twitter Strips Away Some Privacy Controls
At a moment when many publishers and platforms are enhancing privacy controls, Twitter decided to take another path. A pop-up greeted uses logging on to the mobile app, explaining that they will still be able to limit the data they share with Twitter’s “business partners,” but the platform had removed the ability to turn off sharing of “mobile app advertising measurements.”
“This information can include IP address and mobile device advertising identifiers for devices that open or log in to Twitter’s mobile apps; but does not include your name, email, phone number, or Twitter username,” the company wrote. Interestingly enough, this change does not apply to anyone in a country under GDPR.
This certainly seems to be a reaction to a New York Times’ story about Grindr and OKCupid sharing personal data with advertisers that put Twitter’s MoPub ad server in a less-than-pleasant light. Obviously, the privacy control switch is not GDPR-compliant.Losing out on valuable campaign data has been a serious concern for all parties when it comes to online data regulation, and Twitter is making an extremely bold move. We’ll be scrutinizing both public reaction (so far little uproar) and regulatory blowback; this could influence how publishers and platforms address privacy policies going forward.
CCPA Enforcement Extension Not Likely
The Coronavirus has upended a lot of legislative activity, but that hasn’t been the case for the California Consumer Privacy Act (CCPA). Well, at least not fully anyway. Although the pandemic has delayed when we might get to see the final regulations, that tell companies how they should comply, California’s Attorney General has absolutely no plans of postponing enforcement past July 1. In fact, on Friday his office issued a press release reminding users of their data privacy rights during COVID-10.
Whether companies will have time to adapt is of major concern to the ANA. They, along with other trade groups, have asked for a delay in enforcement, considering that business is not business as usual for most companies that have employees working from home and many others experiencing furloughs or layoffs.
THREAD: Some thoughts on increasing ad spend during a recession.
1) Investing in a downturn is not intuitive and therefore requires most marketers make an unpopular proposal during hard times.
Lara O'Reilly, Digiday
On this episode of The MadTech Podcast, ExchangeWire's Rachel Smith and Lindsay Rowntree are joined by Lara O'Reilly, Senior Correspondent, Digiday, to discuss the latest news in ad tech and martech. In this episode: coronavirus ad spend, live video streaming, and mobile gaming.
Ops | Dec 14-15, 2020
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