What you need to know:

• Brands have had a moment of "sanity and clarity" after pulling spend in the first week COVID hit Australia.
• Declines of 35-50% in programmatic ad demand is common at present
• Using programmatic, brands are shifting their messaging away from product to customer service
• As major brands begin to switch off certain activity, MiQ's Jason Scott says it could open the door for companies that have been historically priced out of the market
• He calls this programmatic's "big tobacco moment"
• Portfolio management is now vital says Trade Desk ANZ boss James Bayes, with clients now having to focus on the core products and offerings they can deliver during this period
• Government, e-commerce, insurance and essential services are all on the rise
• BVOD is seeing the most availability in inventory but new demand for display is also emerging 

Sanity and clarity

The outbreak of COVID-19 and the subsequent rollout of various lockdown measures over the last three weeks has seen ad spend drop-off anywhere from 35-50%, depending on who you ask.

Cinema and outdoor have been left reeling, as people are forced indoors, while other traditional media are also feeling the pinch.

This has seen a strong increase in broadcast video on demand (BVOD) and digital news consumption, resulting in many clients shifting their media spend to programmatic, SEO and paid search.

The Trade Desk ANZ Managing Director James Bayes told Mi3 programmatic hadn't been immune to the immediate effects of COVID, acknowledging that many clients hurried to pause or pull campaigns in a bid to salvage cash flow.

However, Bayes says the industry has taken "some deep breaths" and found a level of "sanity and clarity", with clients now looking for alternative solutions.

“The first week was primarily a reactionary period, where clients pulled activity first, while for others it was the only course of action due to the impact to certain sectors – travel, tourism and the like,” Bayes says.

“What’s become apparent for us in programmatic, is that brands and agencies have taken a deep breath and found some sanity and clarity. This has meant that brands are now understanding that there is still a message, it just needs to adapt to the climate."

Primarily this has involved portfolio management - seeing that while certain products may not be worthwhile advertising, areas including customer service, product availability and delivery methods are still important to keep consumers informed on.

He says while the market has overall been flat, this is primarily due to some advertisers being having nothing to advertise, such as airlines and tourism.

Bayes says sectors including government, e-commerce and customer service-based offerings have been some of the standout advertisers.

"Take government as an example, their use of programmatic has been to adjust messaging around COVID as new information and changes come through. We've seen a lot come out of them from a federal and state level," he says.

"Then you've got brands that have moved from focusing on promoting a range of products to informing customers on changes to delivery, stock, hours etc."

According to a report from the IAB in the US, digital ad spend is down 33% and traditional media is down 39%, while the majority (63%) of advertisers have already changed the messages they are touting in-market, increasing:

• Mission-based marketing (+42%)
• Cause-related marketing (+41%)

In Australia, the IAB is also calling upon the marketing fraternity to weigh in the early impacts to their media strategy, as it is likely to mirror international trends.

Programmatic's 'big tobacco' moment

MiQ ANZ CEO Jason Scott says there is no doubt some brands are now able to buy into digital inventory that they had previously been priced out of as CPMs begin to drop off.

He says the moment shares similarities with big tobacco and the move to outlaw tobacco advertising capabilities in the early 90s.

"When tobacco laws got changed, you saw a real changing of a guard in different sectors which were either locked out because they couldn’t afford to be playing in certain spaces or there were long-standing sponsor arrangements. When that big category gorilla got removed it allowed new brands to come in," Scott says.

He says while it might be a little too early to call, and baring in mind those bans came through definitive legislation, there are "certainly parallels".

"You are seeing big sectors like travel and tourism turn down what they are doing due to necessity, leaving the door open for other brands which may have become more 'essential' or can now afford to play in that space," he says. "This leads to the big question, which becomes, is this a temporal trend or does it turn into something with more longevity?"

Supply and Demand already shifting

According to Liam Walsh, Amobee's SVP, agencies already want more automation of BVOD and CTV to help them normalise the massive shifts in supply and demand.

He says this really isn’t surprising and the need will continue to increase, adding there is more activity planned and concurrently negative pressure on agency fees fueling a real sense of urgency to get "less hands on keyboards".

"Additionally there is a delay in advertiser demand and user consumption which means eCPM is dropping," Walsh says. "This won’t last but is creating a buying opportunity right now. But the fundamental problem we are being asked to help solve now is BVOD and CTV automation."

He says when it comes to BVOD, Amobee are seeing ad avails increase steadily (around 30-40 per cent compared to what is normally expected) and are projecting BVOD avails to increase potentially up to 70 per cent into April as people’s new routines take place.

This has based this off a predictive model from the company's TV forecasting tool. He says this is one of the fastest and most "significant behavioural shifts Amobee has ever witnessed across mediums".

Publishing books revenue but still cautious

Verizon Media ANZ MD Paul Sigaloff says from a publisher point of view, the first week was a lot of clients "not knowing how to react and handle the situation" and resulted in the obvious pulling of spend.

However, he says in the weeks that have followed there’s definitely a more "proactive feel" in the market but "it’s not business as usual by any means".

"We certainly aren’t seeing the booking levels we were a month ago but we are still seeing revenue being booked and people responding to briefs," Sigaloff says. "It’s good to focus on that and while we’ve hit out targets for the first quarter, it’s hard to know what that means looking forward and if it will sustain our second quarter."

"So the publishers’ challenge is now around how we provide an effective communications strategy to target these new audiences, while also keeping up with the daily rate of change that accompanies them."