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16 ad buyers identified the media companies that are poised to gain and lose the most as the pandemic upends advertising spending

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  • The coronavirus pandemic has changed how ad buyers spend money as they apply scrutiny to how media companies and publishers perform.
  • Business Insider talked to 16 media buyers who handle billions of ad spending and who identified 12 media companies and platforms most impacted by the pandemic.
  • Ad buyers said the current environment has sped up changes taking place in the ad industry in recent years, including a shift to over-the-top advertising and publisher consolidation.
  • Click here for more BI Prime stories.
The coronavirus has crushed the advertising industry.
Marketers like travel brands that once spent heavily on advertising have paused ad spend as shelter-in-place orders keep people home, and long-term economic concerns have led to mass layoffs at advertising agencies, media companies, and adtech companies.
And the pandemic has sped up trends that have been developing for years with new urgency. Without live sports or productions, advertisers have reconsidered what they spend on TV advertising as people continue to cut the cord and move to streaming platforms. A shift to performance marketing and drops in digital ad prices strengthen Facebook and Google and reliable ad platforms for marketers. And a sharp increase in e-commerce benefits Amazon's burgeoning advertising platform.
"The whole pandemic is forcing the changes to happen faster than some clients were comfortable with," said Jessica Brown, director of digital investment at media-buying agency GroupM.
Business Insider talked to 16 media buyers at big and small advertising agencies about how the pandemic will change how they spend on behalf of advertisers.
Many predicted ad spend would return slowly, on a case-by-case basis. When it does come back, they said, it'll be performance-based as advertisers will demand to know every dollar they spend is working.
Andrew Sandoval, director of biddable media at The Media Kitchen, predicted more media buying would become automated as advertisers back out of direct deals that lock advertisers into commitments.
Tried-and-true and local media companies also stand to gain.
"We've seen a shift to more regional and localized messaging; we've seen a concentration of spend with fewer and the larger partners that clients work with," said Catherine Warburton, EVP and chief investment officer at 360i.
Here's a breakdown of how 12 media companies and platforms are positioned to weather the pandemic, according to media buyers.
SEE ALSO: Funding is drying up for digital ad firms. 2 founders turned investors who weathered the 2008 crash say what adtech companies can do to survive.

Discovery: A reliable TV network during an unreliable time



Discovery's brands including HGTV, Animal Planet, and Food Network have seen a ratings boost as people seek out informational and entertainment content, and two ad buyers said that Discovery is well positioned to win upfront ad deals post-pandemic because of its solid slate of cataloged content from stars like HGTV's "Property Brothers" and Food Network's Ina Garten.
Many of Discovery's programs also do not rely on pricey production shoots; Food Network has been experimenting with producing shows from home.
"Food Network and the larger Discovery group embraced the idea of programming that fits the current dynamics," said Robin Cohen, VP and group media director at Rain the Growth Agency, whose clients include direct-to-consumer brands like 1-800 Contacts.



Twitter: A replacement for some sports ad dollars



Twitter is making a push for sports advertising with the cancelation of National Basketball Association, Major League Baseball, and Major League Hockey games, and it could benefit, said GroupM's Brown.
"The world of social has opened up to a broader audience because we're thinking of social as a way to get consumers through content that we would see on TV," she said.
However, Leyla Foschi, social lead at PMG, said that her clients have pulled back on Twitter spending recently because it's filled with coronavirus news that scares off some advertisers.



Roku: Positioned to jump on the shift to streaming TV



Several streaming services have gotten a boost during the pandemic but struggled to grab a share of TV advertising dollars because TV ad deals are complex to unwind.
The Media Kitchen's Sandoval said that Roku is best positioned to win OTT advertising because it makes streaming hardware in addition to distributing content and selling advertising.
Roku also recently rolled out a new ad platform that pulls in its acquisition of adtech firm Dataxu last year. Sandoval said that move will make it easier for advertisers to understand what OTT ad space they are buying.
"The rebrand makes it more tangible," he said.




Facebook and Google: Strengthening the digital duopoly



Ad buyers say Facebook and Google are poised to solidify their domination of digital advertising because their ad formats consistently perform and consumers are using their services more.
"The eyeballs are going to Facebook and Google. This [pandemic] only benefits them and it will continue that consolidation," said Paula Connard, SVP of data solutions at Horizon Media.
Connard added that as Facebook and Google get bigger, measuring their performance will get harder because they insulate metrics from advertisers.
Emily Anthony, director of media services at Merkle, added that Google-owned YouTube is helped by people watching more content over connected TVs, and the platform has been luring advertisers with programs like YouTube Select, the company's revamped approach to selling its premium content.
"There hasn't been a better time to be on YouTube — it's challenging for [clients] that rely on brick-and-mortar stores to run performance programs," she said. "YouTube in particular is flexible and we're seeing additional resources from Google to get advertisers on the platform in a smart way."



Fox: A TV network that doesn't need pricey production shoots



Fall programming is a staple of the TV ad marketplace, and having predictable programming could put Fox at an advantage with advertisers.
Fox was early in announcing a fall TV schedule with programming that's heavy on animated shows like "The Simpsons" and "Family Guy," and scripted and reality series including "Filthy Rich" and "MasterChef Junior" that won't be impacted by the pandemic.
Fox Sports was also early to broadcast some live sports content including the NASCAR Cup Series, whose viewership has spiked since the pandemic struck, which could attract sports advertisers.
"The reality is that programming production is down and there may not be the same number of available impressions," said Gibbs Haljun, total investment lead at Mindshare.




Amazon: Positioned to grab e-commerce ad dollars



Amazon has ridden the e-commerce wave as consumers shop at home during the pandemic, and ad buyers said Amazon would benefit in the coming months as more advertising moves towards performance marketing and platforms that drive people to purchase.
But advertising on Amazon also requires sellers to make sure that items are stock and can be delivered to consumers. For that reason, Obele Brown-West, EVP of media at Tinuiti, said that the agency is advising clients to make sure that their non-advertising Amazon strategy is in place before restarting their advertising.
"It's not the same Amazon experience that people have become accustomed to," she said.



Peacock: NBCUniversal's streaming service has already signed on big advertisers



NBCUniversal lost a big chunk of revenue and viewership with the postponed Tokyo Olympics  but its push into streaming with the new streaming service Peacock could soften the blow.
Several media buyers said the timing of the launch was good for Peacock, with consumers at home and looking for new shows to watch. Peacock has secured big ad deals with Target, Unilever, and State Farm.
In addition to new programs, Peacock offers a back catalog of shows like "The Office," and "Parks and Recreation."
"If we're seeing that shows don't come back this fall or that the schedule would be more sporadic, it actually favors ad-supportive platforms with a good back catalog," said Danny Weisman, media director at Noble People.
Peacock's launch will also accelerate networks to push entertainment to streaming platforms over linear TV, said another ad executive.
"Can you imagine a world where you go back to watching entertainment on linear TV ever?" the executive said. "Every major media company has purchased or launched a streaming service — I think that's where you're going to see a real shift in quality entertainment programming."



The Ringer: Filling the live sports void



Without live sports, advertisers are seeking new ways to target sports fans, which makes sports media outlet Bill Simmons' The Ringer that dives deep into sports and is personality-driven valuable to advertisers, said Weisman from Noble People.
The Ringer "has made it a mission to make a connection with their fans," he said.
Spotify acquired The Ringer earlier this year for $200 million.




Reddit: Usage is spiking but ad dollars may not follow



PMG's Foschi said Reddit may get cut from advertisers' budgets because it's better suited to branding than direct-response advertising.
Reddit has been building an advertising business with tools like cost-per-click bidding and recently hired former Pinterest ad exec Harold Klaje as VP of advertising.
But Foschi said Reddit's advertising pixel that is used for conversion tracking can't be used to build audiences for ad targeting.
"Despite usage being up, their consideration from an advertising perspective has almost disintegrated because their technology isn't very advanced," she said.



Morning Brew: Leaning into news in a way that advertisers like



News consumption has spiked during the pandemic but some news publishers have struggled to sell advertising around content because many programmatic advertisers shun the category.
While newsletter company TheSkimm has struggled, Noble People's Weisman said that there's an appetite to advertise in newsletters that distill the news, particularly daily business newsletter Morning Brew that's aimed at young professionals.
"It doesn't have the connotations of other legacy media players — it's bootstrapped, in your inbox, and it helps people summarize and keep track of the news when there's more downtime to digest," he said.



Autotrader: Targeting narrow groups of consumers



Online car marketplace Autotrader isn't the glitziest, but it attracts people who are in the market to buy a car, which makes it attractive to advertisers.
"I want to know where I can drive the brand when someone is close to a decision," said one ad buyer.
Ad buyers' focus on proven media companies is likely to grow while ones that aren't leaders in their space are at a disadvantage, said Jay Friedman, president of Goodway Group.
"For publishers, this is likely a story of inequality becoming magnified," he said.



Pinterest: Pushing into performance advertising



Ad buyers are giving Pinterest another shot during the pandemic.

Pinterest's audience of people looking for inspiration has long appealed to marketers like packaged goods, home-improvement, and beauty brands. Three ad buyers said clients have been spending more on Pinterest over the past few months as its user base has grown.
Part of the interest in Pinterest comes from its work in building out direct-response tools that performance marketers like direct-to-consumer brands use to track conversions.
"Prior to the pandemic, they mostly played in the upper-funnel space but they had more recently put out some products that would return at a higher rate," said PMG's Foschi. "We have found that the sales organization is pushing hard there, and advertisers are receptive to it."





Source
https://www.businessinsider.com/16-ad-buyers-talk-about-coronavirus-impact-on-media-companies-2020-5?IR=T


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