COVID and Digital Advertising

COVID has created unprecedented circumstances globally. While US, Spain, Italy , India are dealing with fatalities, lost production and Joblessness , the consumer sentiment is negative as people have taken to caution.

Entire supply chain has been disrupted from movement to raw material , to production halts. The finished goods , except for survival necessities , are not finding buyers. Travel and Hospitality is hardest hit. Banks are dealing crunch as governments dole out packages to keep the economy from going bust. Internet trunks are being tested to capacity like never before

People at home are consuming content online , leading to a glut in supply. Demand is going down continuously as there are no buyers and hence no advertisers. this will lead to plummeting cpms, reduced coverages and eventually a consolidation in adtech space as not many companies apart from Big 4 and large DSPs will be able to ride the wave.

With no vaccine in sight , things will move south from here. Some economists believe that we are already in a 2 year recession and impact to world economy will be severe than in 2008 .

China , from where the Virus emerged, has claimed that pandemic is under control in their country. China being the production hub of the world , also controls the largest cache of rare earth metals, has opened its factories and production has resumed.

The big question is, Where is the demand for the good produced in Chinese Factories. Surely, their entire produce can not be consumed by their own population. So, even if China is out of the woods , as they claim, it not enough to save rest of the world.

Predictions for Digital Advertising ecosystem

(these views are solely my own and assume they are all wrong )

  1. In a more optimistic Scenario, markets would recover by October’20
  2. Fast recoveries expected around December’20.
  3. Ad spends from print and other traditional medium will shift to Digital
  4. Publishers would become more active player in tech stack and supply path initiatives
  5. A lot of agencies already under margin pressure will be head for consolidation.
  6. Smaller ad networks and middle men adding to the hops will wipe out , leading to a cleansing that Demand side has been forging for long time
  7. Video and Native formats will be Bigger chunk than display.
  8. Desktop will make a come back as consumers will get in a habit of browsing on larger screen , while at home for considerable length of time
  9. 100% SOV campaigns will make a come back with brands trying to grab a marketshare over their competiton
  10. technology and framework will be strengthened and be more robust.
  11. #9 will have an exception in case markets do not recover in 2020. in that scenario, narrow targeting will be flavor of the day.
  12. Privacy Laws will become stricter with more expansive framework beyond IAB, NAI, GDPR, CCOPA, CCPA, India Digital Privacy act.
  13. Third paty cookies will be wiped out sooner than expected.
  14. Any publisher or Buyer, aside Big 4 , with First party data will be able to demand much higher Premium for their Supply than Pre-Covid era,

Categories

In Addition to above, some of the categories will take much longer to recover or completely transformed, namely :

  1. Travel and Hospitality
  2. Tourism
  3. Health and Insurance
  4. Productivity Tools
  5. Gaming
  6. Real estate
  7. Hardware
  8. Human resources

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