Small advertisers stick with what they know during a recession – and what they know is Facebook.
As of January, Facebook had more than 8 million active advertisers on its platform, of which multiple millions are no doubt small and medium-sized businesses. Facebook doesn’t break out how many SMBs there are in its overall advertiser base but, in 2017, Sheryl Sandberg did share in passing that more than 4 million SMBs advertise on Facebook. That number can only have gone up.
And SMBs are in a world of pain right now. Small businesses are typically hit the hardest during an economic downturn.
This isn’t a typical economic downturn, though – it’s a health crisis attendant with massive uncertainty. Small businesses are being forced to close their doors and rapidly transition their services online – if they can. Advertising is likely low on the list of priorities right now.
But Facebook, despite its exposure to the SMB market, is uniquely positioned to weather this unprecedented storm, said Jasmine Engberg, a senior analyst at eMarketer.
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Social distancing has been so isolating, Alison Levin is already wishing she was back in a crowded Las Vegas hotel lobby.
“I will never, ever complain again about CES being too crowded, too crazy, too overwhelming,” she said. “I actually miss CES, if you can believe that.”
As VP of ad sales at Roku, Alison is used to working with remote teams globally, although she is checking in with people more often these days. She’s also fielding questions from clients about how streaming is changing during the pandemic and how brands can get involved, while negotiating upfront deals over video chat.
Alison calls in from her backyard in Long Island, NY, (you can hear the odd bird chirping) to avoid waking her toddler Joni from her afternoon nap.
Also in this episode: Alison discusses at-home workouts (she’s running and using the Peloton app) and catching up on old TV shows – that is, when she’s not watching “Finding Nemo” with Joni on repeat.
“I’ve never been more thankful for anything than I am for Disney Plus,” she says.
This article is sponsored by Tatari.
OTT viewing is on the rise. Once considered a supplementary source of TV content, streaming now accounts for nearly 30% of viewing – and growing.
As publishers continue to move more of their content libraries to the advertising video on demand (AVOD) ecosystem, streaming ad impressions will become a powerful opportunity for marketers to reach new audiences at scale with more specificity than ever before.
The move to streaming does bring its own new set of challenges. In particular, delivery and measurement capabilities are not uniform from publisher to publisher – which can make it difficult to accurately assess campaign performance.
“It’s truly the Wild West of TV advertising,” said Philip Inghelbrecht, CEO at Tatari. “There are still a lot of missing pieces to figure out – not just the lack of measurement best practices, but also limitations around how streaming impressions are delivered.”
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Some CEOs have a home office. Others, such as LiveRamp chief Scott Howe, have a 1956 Airstream Bubble trailer.
Today on “Social Distancing With Friends,” Scott steps away from his family of five (plus two cats and a white Lab) and checks in from his “perfect escape pod.”
The backstory, in Scott’s words:
I spent 15 years looking for a 1955 to 1961 California-built Airstream Bubble trailer. When I would go to client meetings, I would always check the classifieds in any city I visited and sometimes even drag clients along to inspect anything that sounded intriguing. (Not many of these model Airstreams were ever made). I finally found a beat-up junker, and then spent some time between Microsoft and Acxiom refurbing it. It’s actually far more comfortable than my office – it now has Lyptus hardwood floors, Douglas fir cabinets, a bathroom, microwave, television, refrigerator, kitchen table and bed, all in a 16-foot aluminum can.
Besides the Airstream, Scott shares his thoughts on the future of linear TV after the pandemic; the similarities he sees between the current economic downturn and the dot com bubble crash; and the verticals that have the best chance to transform their businesses when the crisis ends.
Also, we get a peek into LiveRamp’s disaster playbook, stemming from its Acxiom heritage. “We have a three-ring binder on absolutely everything that could ever happen, and we’ve war planned those things, like a tornado or a horrible winter storm,” Scott says. “We actually had a plan for a pandemic.”
It’s been a big week for location data-related deals.
PlaceIQ acquired location data and measurement company Freckle IoT on Tuesday.
And a day before, Foursquare said it would merge with Factual. Together, Foursquare and Factual have more than $150 million in combined revenue, data derived from over 500 million devices worldwide and 400+ employees. The combined company will continue to use the Foursquare brand.
“We’re making some large bets right now in terms of the future of location,” said Foursquare CEO David Shim. Foursquare bought Shim’s startup, Placed, from Snap in May. He joined as president and was later elevated to the chief exec role after former Foursquare CEO Jeff Glueck left at the end of last year.
AdExchanger caught up with Shim and former Factual CEO Gil Elbaz, who is joining Foursquare’s board and executive team as part of the transaction.
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Quantcast laid off just under 5% of its staff and implemented tiered pay cuts due to the economic impact of coronavirus.
The salary cuts are tiered according to compensation level, with some employees taking 5% cuts and the highest-paid employees taking 30% cuts. Its global staff numbers more than 600 employees, according to Quantcast.
CEO Konrad Feldman, who co-founded the company 14 years ago, took a 100% pay cut.
“In response to the economic impact of COVID-19, we have made a number of changes to our business including the difficult decision to eliminate a number of roles,” Feldman told AdExchanger in a statement. “While these decisions are hard, these are extraordinary times and these changes are necessary to achieve our long-term goals. Saying goodbye to colleagues is never easy, and we’re working diligently to support our team through this challenging time.”
Quantcast runs two businesses: a managed DSP for advertisers and a smaller data and insights business for publishers, including Q for Publishers and a budding consent management platform.
Even before the layoffs, Quantcast had been trying to transition its managed DSP business to one that’s more self-serve. The transition is notoriously tricky, since companies must move to a lower-margin business and risk cannibalizing their more profitable business in the transition.
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"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Jay Friedman, president and partner at Goodway Group.
During this unprecedented time, it’s important to keep an eye on the future. Where will we be in a few weeks and months, following the inflection point?
I would call any major event like this a “full cleanse of nonsense in the ecosystem.” Once the dust settles later this year, are we going to be talking about blockchain in the bid stream, DTC and other shiny objects that sidetracked the industry over the past few years?
Something like this resets us. Thankfully.
Trends such as privacy, identity, fake news and the future of work will remain at the forefront, and that’s OK because it shows how important these things are to the industry. In the end, COVID-19 will not only reset our talk tracks, but it will help us to move forward with more focus on what’s actually important.
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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Lightening The Load
NBC said it will reduce its ad load in response to the coronavirus pandemic. Ad sales chairman Linda Yaccarino wrote a blog post detailing a plan to reduce ads across categories, including news and late-night talk shows, to free more time for pandemic coverage. But the cuts will be permanent for all programming, since NBC was already working toward fewer, less interruptive commercials. NBC didn’t specify how much it would reduce its ad load, but said it will take different approaches to different types of programming, Adweek reports. Total consumption on NBC properties was up 27% in March, but reducing ad load allows the network to be more flexible with advertisers that might reduce or cancel campaigns.
Unearned Media
Many brands, especially direct-to-consumer and ecommerce companies, depend on earned media. “A growing number of them are reporting on the compounding effects of a loss of revenue due to decreased affiliate sales and a loss of opportunity due to insufficient earned media,” writes the ecommerce and media research firm 2PM. Brand partnerships, collabs, events and announcements aren’t launching or being covered right now. Without fashion, culture and general news coverage, affiliate inventory is down, and supply is also restricted because retailers including Walmart, Macy’s and Patagonia suspended affiliate programs for the pandemic. On top of that, Amazon, the big kahuna, removed third-party affiliate vendors from its affiliate program at the end of March. Though that move was planned before the coronavirus surfaced in the United States.
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MediaMath reduced its workforce by 8% through a combination of layoffs and furloughs due to the economic impacts of the COVID-19 pandemic.
Remaining employees will take a 10% pay cut and MediaMath paused 401(k) matching.
“We are preparing our businesses to weather these uncertain times and taking actions that will strengthen our position for the long term, including focusing our hiring efforts on critical positions only, reducing expenses and compensation, and reducing roles as necessary,” MediaMath President Konrad Gerszke said in a statement.
The DSP employs 659 people, according to LinkedIn, making its pre-layoff head count about half the size of its rival The Trade Desk.
DSPs charge a percentage of the media spend flowing through the platform. So as advertisers halt or cut spending due to the pandemic, their revenue falls in lockstep with those declines.
And the declines have been sharp. An IAB survey last week reported that 33% of brands expected to spend less on digital media between March and June. And a full three-quarters of brands either paused or decreased spend due to the pandemic.
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On Tuesday, PlaceIQ announced its acquisition of Toronto-based location data and measurement company Freckle IoT. Terms were not disclosed.
Foot traffic may be way down during the pandemic, but consolidation in the location data space is heating up.
The day before, Foursquare revealed merger plans with location data provider Factual less than a year after acquiring Placed from Snap.
For PlaceIQ, closing a deal in the WFH age was an interesting experience, said CEO and co-founder Duncan McCall. PlaceIQ first started flirting with Freckle during CES in January.
“CES feels like a lifetime ago now,” he said. “It took an obscene number of calls and due diligence, but we got it done.”
Consolidation is a logical and healthy outcome in bloated categories, McCall said.
“Although there are fewer companies now, there are probably still too many, and we’re seeing that start to shake out in many different sectors and industries,” he said. “We’ll see more consolidation – it’s only natural.”
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