How Is the Novel Coronavirus (Covid-19) Impacting Digital Media and Advertising?

A few weeks ago, we launched a brand new weekly newsletter called The Wrapper.

With The Wrapper, written by AdMonsters Editorial Director, Gavin Dunaway and Senior Editor, Lynne d Johnson, we want to summarize exciting news items that catch our eyes and link them to wider developments in digital media and advertising. As the global Coronavirus pandemic hit, we’ve been covering the news about how it’s impacting digital media and advertising, which includes ad ops, rev ops, ad tech and brands as well.

You’ll find our latest coverage below. And be sure to sign up for The Wrapper if you haven’t already.

Indecent Traffic on the Rise?

When crises strike, people turn to things that comfort them most. The PornHub network of adult entertainment sites has been studying its traffic and noticed a 5.7% increase in traffic last Wednesday above its average 120 million daily users. Intriguingly, across timezones, PornHub noticed large traffic spikes during what most would consider working hours. In Italy, the network has seen double-digit traffic growth in the last week.

Why This Matters

All right, we included this one as a bit of an end-run to talk about brand safety. As we noted at the Publisher Forum, Coronavirus has brought a decline in reserved inventory as advertisers are practicing extra caution. However, digital publishers are likely to see traffic spikes over this time period, which means opportunities to make up for that lost direct revenue with indirect (i.e., programmatic).

Well, enter a new problem a lot of news publishers are finding they have in common with PornHub—advertisers don’t want to be associated with their content. Advertisers are listing Coronavirus-related terms on their “do not serve” list. Hence why you’re seeing so many banners with innocuous clouds on news sites as you scramble for Coronavirus updates: programmatic bids are being blocked at the last nanosecond by advertiser brand-safety protocols. Arguably, this is stealing revenue opportunities from publishers.

Certainly, some advertisers don’t want any association with Coronavirus (a certain beer brand comes to mind), but many are losing out on qualified, engaged audiences. Brand safety practices have long been due for serious revision, and maybe this moment will make it happen. For one thing, brands should realize pre-bid if the target content is “unsafe.”

Local News Situation Turns Grim

Unsung heroes in the Coronavirus saga have been local news outlets, which have been able to keep regions informed of the latest infection numbers, best precautionary steps, and up-to-date state, county, and city government actions. However, independent local news sources—especially newspapers—have long been in revenue freefall during the digital age.

We’ve gotten to the point that Joshua Benton, Director of the Nieman Journalism Lab at Harvard University and a longtime researcher of local news decline, declared 2020 will be the worst year on record for U.S. local news media: “We’ll see cities lose their last daily newspapers at a scale far beyond anything this country has seen.

Why This Matters

Local news resources are incredibly valuable for reasons such as exposing local corruption, but especially critical in times of crisis. But their revenue fortunes have fallen on hard times, with online classifieds usurping newspapers’ best revenue streams and local advertisers heading to Facebook and Google for sophisticated targeting. Even large publisher networks of local news outlets like Gannett and Tribune have struggled to turn the revenue tide; the Nucleus Marketing Group confederation of local inventory collapsed last year. And local TV news is not immune as consumers spend increasing amounts of time on streaming video.

It’s hard to see a glimmer of monetization hope for local news, but perhaps traffic spikes driven by the need for coronavirus information will breathe some life into the sector. AdMonsters has suggested programmatic guaranteed could be key in grabbing small- and medium-business ad spend.

Breaking Down the Paywalls

While many digital dailies have struggled to stay alive, publications like The New York Times and Washington Post have made digital subscriptions their bread-and-butter. So when COVID-19 started taking center stage in our daily lives, it was great to see them investing in social good by partway opening up their gates to provide people with free access to the latest virus news. Meanwhile, Gannet, which owns about 100 dailies across the US, has decided to keep their paywalls locked tight.

With all of the fake news and misinformation sweeping across social media, the public is hungry for reliable information that can help them make better-informed decisions.

Why This Matters

A social good strategy can boost your bottom line while helping out the world-at-large. It builds trust between a business and its audience. That’s exactly what these news outlets are tapping into—it’s the old freemium model operating at its best. They’re giving people something they really want and need with the hope they’ll like their offerings enough to shell out money to consume even more of it.

But some pundits disagree with the practice of paywalls altogether, lambasting the elitist nature by which they create an information and digital divide. “The issue and need for ad-supported media is clearer than ever right as ad budgets get cut and ad tech is shaky,” recently tweeted Jonathan Mendez, partner at Arkle Advisors. He isn’t wrong either, studies consistently show that consumers prefer ad-supported content over subscription-based, as long as the advertising is relevant and not interruptive.

Video Viewership Up, TV Advertising Down

Pornhub isn’t the only video outlet realizing an increase in eyeballs during this pandemic. According to Nielsen, fear of Coronavirus will cause media consumption to rise nearly 60%, with CTV/OTT accounting for much of that boom as audiences remain on lockdown. Meanwhile, live TV viewership will continue to wane, especially as its lifeblood from major sporting events like the NBA and NFL stops running, costing networks billions in advertising dollars. And with networks canceling their upfront pitches to advertisers, they’ll leave even more advertising dollars on the table for the ad-supported streamers and other publishers to pick up.

Why This Matters

With more people in WFH mode, there exists a greater potential for advertisers to reach a more engaged audience across other dayparts besides the much-coveted primetime. As consumers continue to avoid densely populated public spaces, e-commerce is also expected to take off.

In times like these, consumers are looking to be both entertained and informed. This moment offers publishers—who aren’t named Netflix, Hulu, Amazon Prime or Roku—an opportunity to bulk up on streaming content to capture more audience attention, as well as some of those unspent advertising dollars.

Coronavirus Keyword Block Hits Publishers Programmatic Pockets

Covid-19 is now officially a global pandemic wreaking havoc on some people’s lives, as well as the global economy and digital advertising. In February, Coronavirus became the second-most common blacklisted word—following Trump—for news publishers and the third most common blocked keyword across the open web. Google has instituted a policy prohibiting ad content that capitalizes on the outbreak, in response to the misinformation being spread about the virus.

Why This Matters?

As the virus continues to spread, we can expect to see an increase in words associated with it also being blocked. While the overall goal here is to ensure brand safety and stop the misinformation being spread about the Coronavirus, these heightened measures will negatively impact programmatic revenue for legit news organizations reporting on it and providing health information to consumers. If advertisers are too stringent in their approach to protecting their brands in this time of crisis they can expect to see diminishing returns on their campaigns.

Digital Advertising Stricken With Coronavirus?

If you’re not busy constructing homemade NP95 masks or getting into fistfights over the last bottle of Purell at the pharmacy, you might wonder to yourself, “Hey—how is the spread of the coronavirus going to affect digital media and advertising, especially news outlets?” A new regulatory filing from The New York Times does not bode well.

On Monday the company claimed a slowdown in advertising bookings could be attributed to “uncertainly and anxiety” over the quickly spreading coronavirus. CEO Mark Thompson said overall advertising at the Old Gray Lady was expected to fall at a mid-teens rate this quarter, with digital advertising down 10%.

Why This Matters

The interesting thing here is that Thompson is talking about bookings or reserved inventory. During many crises—think hurricanes, snowstorms, and natural disasters—where people are hitting the Internet hard for information and updates, real-time programmatic revenue has swelled for news sources. And if the coronavirus forces people to stay in their homes for weeks at a time, you can bet they’re going to seek solace in the Internet. So reserved inventory is likely to take a hit, but don’t count real-time programmatic out.