How to fight declining ad revenue in 2020 as a publisher.

The advertising world is in a lot of trouble right now, due to the global pandemic taking a heavy toll on the economy. With marketing budgets being pulled back and some businesses even shutting down altogether, ad spend is at a low that’s unnatural for this time of the year. But wait, there is some good news in all this. Just because the market is down, it doesn’t mean there’s nothing you can do as a publisher to recover some lost revenue. Over the past month we’ve been hard at work to come up with a response to the crisis and this is what we found.

2020 publisher ad revenue decline

Even though this is a unique situation, a drop in the ad market is hardly a new thing for digital publishers. In fact, the current state of the industry has a strong resemblance to what we see at the beginning of each year as well as during the summer months in some verticals. The key difference here is that we don’t know how long this is going to last and what the aftermath will be once we come out on the other side.

There are, of course, unique circumstances that are polarizing the market, so we factored those in when analyzing the situation as well. Here is a short summary of what we’re going to cover:

  • How to re-configure your programmatic setup to access more stable sources of ad revenue.
  • What to do and what to avoid to make sure you’re well equipped for the long run.
  • What you can do to use social distancing to your advantage.

Lean on CPC/CPL/CPA-based demand

Campaigns that operate on any of these pricing models are typically less susceptible to market changes. Advertisers only pay for inventory that delivers customers with high purchase intent, which allows better predictability on ROI and lowers the risks significantly.

One prime example of this is Google AdWords demand, which we’ve seen great success with in similar situations. What some publishers don’t know is that those campaigns are also available through display channels and if enabled account for a huge amount of ad revenue.

There is, of course, a slight dip in AdWords revenue as well, but based on our data that is currently between 6-7% only, i.e. way less than the industry average. These campaigns are also significantly more stable in performance, as the pool of buyers consists of thousands of small businesses. This means that even if a few advertisers drop out, they are instantly replaced by new ones.

So the question really is, what do you need to do to take advantage of such demand? Here are the two main steps:

Step 1 – Optimize for clicks 

Certain ad sizes and placements deliver better click-through rates, that’s just a fact. You should explore historical data to find out which are the most popular and top performing ad sizes with your platform of choice. Enabling multi-size will also help significantly in this effort.

A rule of thumb is that larger, sticky placements usually perform best, but that’s not a 100% guarantee, so make sure to do your homework before making any changes.

Step 2 – Ensure that you’re compliant

There might be slight variations from one platform to another, but the most notable thing to know here is ad refreshing. Reloading inventory and action-based campaigns simply don’t mix well, especially when it comes to AdWords – they’re simply not compatible.

With that in mind, make sure to disable ad refreshing on any ad spots that are expected to deliver high click rates. That said, definitely don’t do this site-wide, as auto-refresh can be a great tool for boosting revenue and every little bit counts in these difficult times.

There is another hidden benefit of utilizing action-driven demand sources, which is their high fill rates. In programmatic advertising, there’s usually way more supply than demand at any given time and that gap has only widened in the last few months. On the other hand, with AdWords buyers (especially through AdSense on the sell side), ads don’t need to be paid for in advance for them to be displayed. That means in some cases you can even see fill rates close to 100%.

Avoid aggressive price floor reductions

Whenever ad revenue is going down, reducing price floors is almost always the default reaction for publishers. That’s not necessarily a bad thing on its own but there’s a hard cut-off point, depending on your niche, below which things tend to get messy.

The primary concern here is ad quality. Even with mainstream platforms such as Google’s, there is no guarantee that nothing offensive or malicious will get through. Fraudsters are finding new ways to bypass security each day and marketplaces are just not able to catch on as quickly.

Not to mention that the back-end algorithms are not as good at filtering out offensive ad creatives and URLs as you may think, especially when it comes to other languages.

The second risk here is actually long-term performance. Once you let the algorithm know this inventory is available at lower prices, it can be quite the challenge to bounce back. You’ll also not be earning that much more in the short term, so make sure to operate within reasonable margins.

Segment your inventory

Another knee-jerk reaction among publishers when the market’s on the decline is to just plug every SSP available into their setup. That’s a really bad idea since the heavier your stack is, the more inventory losses you will suffer. With the buy side already on the fence, that’s something publishers really can’t afford.

Instead, we advise for a different approach, which involves traffic segmentation. Picking your top performers and aligning them with specific inventory allows you to create a granular setup that utilizes all the available demand, while still keeping things clean and simple.

Additionally, each country has a different regime under the current circumstances, so you can easily expect drastic overnight changes in ad spend on a local level. With that in mind, it’s advisable to split your setup between countries (at least the ones most relevant to your ad income), which will allow you to make precise adjustments and have much better visibility over what’s going on.

This method actually falls under the best practices umbrella at any time of the year, but in this situation it’s advisable to go one step further than usual. A particular emphasis should be placed on verticals and countries most affected by the coronavirus.

Supercharge your newsletter

Social distancing has forced people into confinement, which has naturally led to web traffic skyrocketing. It’s a battle for audiences now and there are several things you can do to drive more visitors to your site consistently.

If you’ve already been building up a list of subscribers, there’s no better time to take advantage of it. Users currently have much more time to spend on the web and sending them regular email updates is a great way to bring them back on site.

A loyal audience is also way more active on average, so the revenue it generates is likely to be higher than what you would see with first time users.

Your newsletter also gives you the opportunity to push content related to the coronavirus, which is obviously a trendy topic. While the COVID-19 keyword does have great traffic potential, it’s very difficult to rank for it and you’ll only be able to do so with specific types of Google-approved content. On top of that, if you take a wrong turn trying to boost your ranks for that topic, you can actually hurt your overall SEO as a result. On the other hand, such content can be pushed toward your subscribers with relatively low risk and you’re probably going to see some solid engagement, given that the quality is good of course.

Be flexible with direct deals

It’s no surprise that the opportunities for direct/programmatic direct deals are slim right now. That doesn’t mean, however, that you shouldn’t even try negotiating any.

Aside from the premium prices, the best thing about these is that they’re reliable and that’s exactly what you need right now. It’s definitely not the time to be picky, so make sure to keep open discussions with your partners and be flexible during negotiations.

Basically, any deal you can get should be welcome, as long as it makes sense financially. Prices are not going to be the same as usual, but that’s okay. The benchmark should be to make at least as much money as through open RTB. Yes, direct deals take more time to set up, but are also more consistent. Programmatic, on the other hand, can be quite unstable in the current climate, so don’t be greedy and give your partners great deals that will tempt them to invest.

You probably will have traffic to spare anyway, so it’s also a good way to maximize return on the impressions you have generated.

In conclusion

The coronavirus is no small challenge for the industry, but there are still ways for publishers to react and keep things relatively stable. It’s worth mentioning that not everyone has been affected equally and if you’re in that category, by all means don’t feel like making any changes is required as of yet. However, if you are struggling with declining ad revenue, we hope our tips will help you survive and thrive once all of this blows over.

And in the meantime, stay home and stay safe!