The consensus among trusted business thought leaders is that COVID-19 is an accelerant for existing marketplace trends rather than a mass extinction event brought about by a meteor hit. Things like office space, lecture halls, and dry cleaning are vestigial organs that remain but are no longer needed. The silver lining is businesses can emerge leaner, healthier, and more focused.
An example of this is the trend away from undifferentiated media buying on the open exchanges. According to eMarketer, in 2020, programmatic ad spending on private marketplaces (PMP) will surpass that on open exchanges, which sees almost no year-over-year growth from 2019. Growth in PMP ad spending will outpace open markets by about 3 to 1 in 2020 and beyond.
Of course, the demise of third-party targeting got the evolutionary ball rolling, but advertisers and publishers are relearning that a direct relationship with consumers is the way to go. Private Marketplaces (PMP) continue to prove a primary real-time means of bringing first-party data into a campaign or gaining access to premium audience insights selectively shared by publishers. “As the cookie starts to go away and the shelf life is diminished, third-party data won’t be able to be used in as many places,” said Ryan Fleisch, Head of Product Marketing for Adobe Advertising Cloud. “We’re seeing clients really care about making the most of every impression that we’re serving because in certain cases, we might not have the same luxury of scale in the next 12 to 24 months that we’ve had in the past.”
Current conditions have ushered in a tipping point in the evolution of many publishers. For instance, The New York Times reported this week it expects a 50% to 55% drop in ad revenue in the second quarter. Meanwhile, it topped 5 million subscribers by adding 587,000 loyal readers in the last year. The Times managed to rip the morphine drip of open exchange selling from its arm years ago in favor of direct reader revenue and its own PMP solution.
The silver lining to this pandemic downturn is that smart publishers are getting back to the basics, which is to say they are deepening relationships with their audiences rather than offering them up to the highest bidder.
