An opportunity in digital advertising

There’s an interesting ripple effect of the current environment.*  As many of us are homebound right now, we’re consuming more media.  Newspaper paper subscriptions are upPeople are watching the evening news againFacebook traffic is up 50%, mostly in messaging and video chats.  Google had to reassure users it would be able to stand up to COVID-19 traffic.  And YouTube reduced its video quality to help relieve bandwidth pressures, although once you have Logan Paul, I don’t know how much lower your quality can go.  (Rim shot)

So advertising revenues should be shooting up.  If I remember my econ minor, an increase in demand moves some curve either left or right something something inflation and monetary policy something something …

OK, so I don’t remember my econ minor.  But it stands to reason that if more people are tuning into something, revenues should go up.

But that’s not what’s happening, because advertisers are pulling out.  Newspaper subscriptions aren’t rising fast enough to offset the collapse of local ads.  Advertisers are blacklisting “coronavirus” content, which right now is a lot of the content that people are consuming.  Overall digital ad spend is decreasing.  

As a result, the cost of Facebook, Google, and YouTube ads is falling.

So, more people are turning in, fewer organizations are trying to reach them, and ads are cheaper.  It must be because the ads aren’t working now, right?  I may not remember much about econ, but I’m pretty sure they said free markets solved stuff like this.

Online advertiser WordStream looked at this and, sure enough, there are some industries where the bottom has fallen out.  For example, vacation package conversion rates have been cut in half.  (I don’t know about you, but my reaction was “only half?”)  Bars, restaurants, sports, conferences, and other leaving-the-house activities are also so very 2019.

But there are some areas going up.  Doctors, office supplies, shipping, and… drum roll…

Yes!  Nonprofits’ performance on Google has increased substantially with the rise of COVID-19:

– A 10% increase in search ad impressions.
– A 23% increase in search ad conversions.
– A 20% increase in search ad conversion rate.

This echoes what we are hearing from several clients – upticks in digital effectiveness and guarded optimism in the channel.

So, more people are looking for nonprofits’ content, it’s cheaper to reach them, and ads are more effective than they used to be.  Call it a rare free market invisible hand-out.

None of us would have wished for this opportunity.  But our causes need to be raising money to be on the front lines of this crisis and to maintain the type of society we want when we recover.

Nick

* If you are looking for more standard types of COVID-19 content, we have it some of that:

– Our statements about our commitment to our clients
– White papers on the historical impacts of economic downturns on giving and what’s in the CARES Act.
– Webinars past and future about how to deal with the challenges.

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