Which Categories are Adjusting Programmatic Spend the Most in July?
In July 2020, despite a 14% year-over-year increase in overall programmatic ad spend, many brands—especially in the tech sector—are bringing programmatic buying in-house to gain better control over first-party data and budgets amid pandemic uncertainties, while digital publishers are seeing recovering CPMs after initial drops, with some like Salon reporting a 25% revenue increase compared to the previous year.
According to the Interactive Advertising Bureau (IAB) and Accenture Interactive, programmatic ad spend increased by 14% year-over-year in 2020 and is outpacing other marketing strategies. However, not all industries are spending more.
Using data from July, the analysis explores which industries are increasing or decreasing programmatic spending amid the pandemic.
Brands bring programmatic in-house
While programmatic advertising offers benefits such as efficiency, data-drivenness, and scalability, it also has downsides. Brands that outsource their programmatic buying often feel there isn’t enough transparency, and giving up full control can create challenges.
Many brands are bringing programmatic ad buying in-house rather than relying on agencies. According to the IAB report, 69% of U.S. brands shifted their programmatic advertising in-house. This allows brands to better control their first-party data and adjust budgets quickly in an unpredictable environment.
“As the industry braces for the loss of third-party cookies and audience identifiers, direct engagement in programmatic advertising matters more than ever,” said Orchid Richardson, VP and head of the IAB Programmatic+Data Center. Brands are increasingly taking over the development of programmatic strategy to strengthen customer connections and control both first-party data and functions related to legal and regulatory compliance.
CPMs recover
Digital publishers experienced a stressful summer as online traffic surged but CPMs for site inventories dropped as much as 20%. However, prices are recovering and publishers report that programmatic dollars are returning.
According to the Ezoic Ad Revenue Index, CPM values in June and July were largely exceeding prices from the previous year. For example, Salon’s programmatic revenues were up 25% year-over-year in the first twenty-three days of July.
MediaRadar Insights
In both July 2019 and 2020, the tech sector was the largest buyer of programmatic advertising, with its share of the programmatic market remaining unaffected by the outbreak.
Categories that increased their share of the programmatic market were:
- Media
- Financial
- Services
The media category was driven primarily by streaming services and video game titles. Streaming services doubled their programmatic ad spend in July compared to the previous year, partly due to aggressive spending by new entrants like Peacock. Video game titles also increased spending by 280% year-over-year, reflecting increased video game usage during shelter-in-place orders.
Categories cutting their share of programmatic ad spending include:
- Retail
- Travel
- Apparel
Within the travel category, airlines drastically cut ad spending on programmatic, spending 86% less year-over-year in July. Travel spending has been turbulent and largely dependent on the rise and fall of new COVID cases. Cuts to business travel advertising were more severe than consumer travel, as events were cancelled and virtual meetings became the norm.
Retail and apparel were also heavily impacted by COVID, with many industry leaders predicting the decline of department stores. Malls, which were already closing before the pandemic, are now closing at an accelerated pace.
For more updates like this, stay tuned for further analysis on the impact of coronavirus on the economy.
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