The significant decline of digital advertising demand isn’t solely based on what is actually happening with the pandemic, but on the sentiment around it.
Ian Hocking, vice president of digital at the South China Morning Post, said publishers shouldn’t just try to manage the advertising decline: “We should be really trying to drive revenues.”
“The decline in yield started before the decline in bids, which makes me think there was a sentiment that the market was going to start getting soft. So people started bidding lower before the market dried a little and people started bidding less genuinely,” he said.
Hocking shared practical advice on how to drive the offensive position during the current advertising climate:
- Remove low-yield supply from the marketplace is unlikely to drive yield back up. This is actually an effort to concentrate bids on higher yield impressions because they are more competitive.
- Take a hard look at pricing right now. Take advantage of bid data available from Google, and analyse downstream auctions to fully understand who’s bidding, who’s winning, and who’s not. Companies should not only think about ad formats they are presenting, but how they perform in different markets.
- Focus on advertising efficiency. Hocking said this is the biggest thing publishers can do right now to make an impact on their business. The average Web site is inefficient when it comes to advertising, sometimes dictated by the newsroom or marketing teams. Open up a consultative conversation with those individuals and try to improve the ad experience.
SCMP evaluates each type of its advertising pages by looking at RPM (revenue per thousand impressions) to determine performance differences between pages and where the company is making best use of ad space. The company is also evaluating CPM to understand the sell-through rate compared to the optimal yield rate possible, and considers the driving yield compared to quality of the ad.
When it comes to driving revenue, Hocking shared four key areas that his company is concentrating on right now:
- Data: Make sure you get payments right, and minimise ghost impressions. Hocking said companies should have a team that focuses on this daily.
- Identity: It’s no longer good enough to say you have massive reach. You need to understand who those users are.
- Diversified revenue streams: There’s a ton of unexplored opportunities, like thinking about native ads, content recommendations, and syndication. Hocking said companies should spend time with this because it is really worthwhile.
- Building vs renting: The ability for publishers to build core tech is growing. SCMP is growing pieces of central technology so it is no longer paying someone else for the same capabilities. Hocking added this effort will build differentiation into SCMP’s products to offer increased value to customers.
This is a case study from INMA’s July 2020 report The “New Abnormal” of Media Advertising, free to INMA members.