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Digiday's Lara O'Reilly on Coronavirus Ad Spend; Streaming; and Gaming

On this week’s episode of The MadTech Podcast, ExchangeWire’s Rachel Smith and Lindsay Rowntree are joined by Lara O’Reilly, Senior Correspondent, Digiday, to discuss the latest news in ad tech and martech.

On this week’s episode:

– There are countless news stories and anecdotes about how coronavirus is negatively impacting the digital marketing industry. For example, WPP has dropped awards, cut top salaries and are on a hiring freeze; the UK ad market is expected to see a 50% droppublishers losing out because of keyword blocking; and Google and Facebook could lose over $44bn in ad revenue.

Does this serve to unnecessarily scare the industry, or are people right to fear they may lose their jobs? We have a certain amount of government protection in the UK, but that will be of little help to the well-paid digital ad tech industry. Will the steep declines we’ve already seen in the industry continue? Are marketers still scared to put money into media, or are they scared to put money into digital media, such as premium news publishers with substantial corona-related content? Some are pushing for the likes of Google to waive AdX fees and reduce platform fees to help publishers. Should Google have a role to play here, thinking about the long-term gains? Or is it publishers’ responsibility to look for new ways to diversify revenue?

– With the surprising rise in popularity of Facebook Live, it just goes to show that streaming is one of the big winners of the pandemic. Disney+ launched across Europe with an estimated 5m app downloads (with a 7-day free trial), signalling pent-up demand for the new streaming service. However, the huge rise in online audiences could be masking something more challenging: Disney+ may see huge success, but the company needs this revenue to cover losses from Disney parks and in-store merchandise; Netflix’s inability to keep up with demand is stunting its audience growth in the West; AT&T, Comcast, and Netflix’s production operations are incapacitated by lockdowns, leaving them incapable of producing new content. The biggest opportunity here for creators, publishers, marketers, and viewers seems to be live video platforms, like Facebook Live.

Is there an opportunity here for beleaguered digital publishers to take advantage of huge audience growth in platforms like Facebook Live and TikTok, and create new and original video content? Will streaming services struggle coming out of the other side of the pandemic? How will the big companies fare mostly relying on subscriptions? Who are the biggest losers? Can these Western companies rely on the East to grow their audience share?

– One industry that appears to be completely pandemic-proof is gaming, especially mobile gaming. China saw a 62% surge in Apple App Store game downloads, and an indoor-version of Pokemon Go has seen a 67% weekly jump in global spending. Some game companies, including King, Activision Blizzard, Zynga and YouTube Gaming have even partnered with the WHO to promote gaming and moreover, social gaming, as a way to make it through self isolation with its #PlayApartTogether campaign and King is giving players free lives on all its games. ironSource also reports a spike in game plays and downloads in markets most affected by coronavirus, but it does also report a 7% drop in eCPM due to a lack of advertiser demand. There has probably never been more supply available in mobile gaming, so now is the time for marketers to take advantage of lower pricing and start testing new waters.

Why are marketers not taking full advantage of reaching their audiences through gaming? What kind of marketers are best suited for in-game/in-app advertising? We’re also seeing a spike in e-commerce due to self-isolation, so the in-app opportunity extends beyond just gaming. Why are marketers still slow to embrace mobile, specifically in-app? Will eCPMs rise once markets start to go into recovery mode?

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