Programmatic spend in the United States began to rise in May, as lockdowns eased. Hard-hit brands such as retail and travel are slowly returning.
Connected TV (CTV), which hasn’t been hit as hard as other media during the pandemic, looks to be the big winner in recovery as well.
Data from ad tech companies including SpotX and PubMatic – as well as analytics firms such as Pixalate and MediaRadar – indicate the possibility of a gradual recovery beginning in May. The Trade Desk and OpenX also spoke with AdExchanger but declined to share data. Google declined to comment.
While ad spend in May is starting to recover, it’s certainly not back to pre-COVID levels.
For instance, MediaRadar notes that May digital ad spend declined 9% YoY – which is markedly better than the 34% YoY decline experienced in March. And global ad spend on PubMatic is still 16% below pre-COVID levels, said Susan Wu, director of marketing research.
“Recovery has been gradual but consistent over the past two months,” she said.
Brands that went dark are turning on the lights
Programmatic ad spend overall rose 14% in May, per PubMatic, and brands hardest hit by the pandemic are working their way back.
Compared to April, PubMatic saw a 129% growth rate in travel spend and a 33% growth rate in auto spend in May.
And retail spend on SpotX increased 88% in May compared to the first week of April, while travel spend grew 32% during the same period.
All of those categories went dark when the pandemic first hit.
“It’s not equal across brands, but overall spend is increasing, and has been for a bit,” said Kyle Dozeman, VP of advertiser solutions at PubMatic.
CTV’s strength continues
Growth isn’t uniform across exchanges as advertisers gravitated toward CTV during the lockdown.
For instance, SpotX saw a 47% increase in spend from education brands in late May. PubMatic saw the category decrease spend by 11% during the same period.
Similarly, sports brands grew programmatic spend by 173% on SpotX, but PubMatic saw that category decrease spend by 62% during the same period.
There’s no clear reason for this discrepancy, though SpotX mostly sells CTV inventory, and PubMatic mostly sells display and online video.
And as SpotX CEO and co-founder Mike Shehan notes, “OTT has proven to be one of the more resilient formats.”
Ad spend through the exchange in early May increased 43% since the first week of April, Shehan said.
CTV’s resilience during the pandemic is carrying over into the recovery. Programmatic transactions on CTV were up 40% in mid-May after a 14% drop in March, according to Pixalate.
“OTT and CTV may witness two years' worth of growth in the next two quarters,” said CEO Jalal Nasir.
In it to win it?
If the country continues to reopen smoothly, programmatic will continue to see an uptick in spend across the board, said Matt Goldberg, VP of North America at The Trade Desk.
But the industry needs to be cognizant that it will take time for spend to return to pre-pandemic levels, and plan for contingencies such as a second wave of COVID, said Joey Leichman, VP of buyer development at OpenX.
“We’re cautiously optimistic that this uptick is the start of a positive trend,” he said. “But there is still a lot of uncertainty brands must navigate.”