Publisher CPMs Are Down – But Not Everyone’s Equally Affected

 

Although the coronavirus pandemic has caused CPMs to plummet, the news isn’t all bad for publishers.

How sites have been affected by the coronavirus’s economic impact vary, depending on the type of content they produce and the type of advertisers they attract.

Freestar handles the advertising for 300 publishers – from sports (Barstool Sports) to retail (JCPenney) to finance (Fortune). From January to February, CPMs increased across 90% of those sites, said Freestar President Kurt Donnell.

Then, between February and March, 80% saw CPMs decline.

The declines didn’t always lead to massive revenue hits, however. Some Freestar-represented publishers whose CPMs dropped also saw bid volumes increase, which made up for the lower revenue from each individual ad. Those publishers, Donnell said, were able to “hold steady” in terms of revenue.

The publishers that have been most successful in the crisis have a certain utility. For example, the publisher Worldometer normally compiles statistics. It added a coronavirus tracker and saw traffic “go absolutely through the roof,” Donnell said. Other utility-focused sites as well as games and entertainment sites, have also seen traffic go up.

On the other end, Freestar’s sports sites have seen traffic fall off because live sports have been canceled, and its educational sites used in the classroom – such as typing tutorials – have likewise been affected by school closures.

Changing advertiser behavior

Freestar’s data shows the changes in publisher CPMs and advertiser spend levels are highly variable, as some advertisers have paused or cut spend levels, plummeting demand.

At the same time, there’s more web browsing. Web traffic in the United States increased due to the pandemic, according to a separate analysis by ad exchange ExoClick. Traffic increased almost 4% the week of March 16, then 7% the following week and another 6.2% increase the week of March 30. Other affected countries had similar trends, where traffic started going up when each declared a state of emergency.

So as demand tapers off, more web browsing increases supply, which gives advertisers who haven’t paused spend bargain-basement prices on CPMs.

Freestar found wide variability in the average CPM advertisers paid to publishers, but on average, CPMs declined between 20% to 40% depending on the advertiser category.

Freestar noted that CPMs paid by Google AdWords, which represents demand for SMBs, decreased 35% during the pandemic. Amazon as an advertiser also paid 30% less for CPMs. Financial advertisers remained the No. 1 AdX advertiser for Freestar publishers, but paid 40% less in CPMs from February to March.

Spending by pet-focused advertisers was also relatively unaffected by coronavirus – dogs and cats still need to eat and play – going down just 6% according to PubMatic’s data from the first to last week of March. But those advertisers paid 62% lower CPMs post pandemic.

So advertisers who continue to buy programmatically through the pandemic have tremendous opportunity, and will see their dollars go much further due to CPM declines.

The upshot is that programmatic auctions quickly adjust to market conditions. Once the market returns to normal, open auction dollars could recover more quickly than other types of media spend, Donnell predicted.

“My optimistic view is that this is temporary, and we’ve found the new bottom of the year,” he said. “My firm belief is that things will start picking up and late Q3 and Q4 will be good, but we’ve basically lost a quarter of our typical seasonal growth this year.”

 

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