Since the covid-19 outbreak, the AdTech ecosystem is having a hard time.
Advertisers' budgets are decreasing, publishers' traffic is skyrocketing, and technology providers are trying to survive.

I belong to the lucky ones, my company is thriving, and my job is not at risk.
Still, quickly enough, I started observing on my LinkedIn network more and more messages from people who lost their jobs.

Early signs of the crisis

I live in California, in the bay area. With the covid-19 outbreak, my company asked me to work from home in early March.
Like many, I started to fully leverage the remote tools everybody is now used to:
- Zoom (of course!)
- Slack (essential!)
- and many internal tools. (thank you, Mr. VPN!)

But I am part of the lucky ones: while I just had to adjust a proper working desk at home, others started to lose their jobs.
In March, a few agencies announced laid offs, furloughs or salary cuts. As the weeks went by, they all applied similar cost-saving strategies (source).

Soon enough, in mid-April, digital players felt the heat:
- Rubicon, which just acquired Telaria, laid off 8% of their staff
- MediaMath also cut its staff by 8%
- OpenX decisions impact 15% of their employees
The list goes on and on.

Advertisers budgets shrinked

The IAB is regularly surveying digital players in the advertising industry.
Their latest study was released end of April. Three hundred industry players in the US provided hints on their updated strategy.
Results showed what everyone was predicting:

• 37% of advertisers stopped investing
• 45% of advertisers adjusted their spend
• only 15% maintained their 2020 initial plans.
• 3% still don't know what they will do (who are these crazy people?!).

A slight positive rebound was observed at the end of April: from -33% YoY (Year over Year) end of March, the investments were at -29% end of April.
The fall remains enormous anyway.

Publishers suffer too

As a consequence of the demand side that cuts investments, the supply side sees a revenue decrease.

Traffic monetization is becoming an issue.

Traffic skyrocketed

The New York Times pointed out that their traffic doubled in March while seeing a decrease in online advertising revenues of 15% over the first quarter.
Things should even get worse in Q2. The NYT expects to see a -40% to 45% of decrease.
For them, this loss should be compensated by the increase in subscription they observed over the period.
Still, you can assume that publishers who heavily rely on ads are bleeding excessively.

Advertisers run away from covid-19

Moreover, advertisers are reluctant to be associated with the covid-19 crisis.
This creates unsold inventory or inventory that is sold at a lower price (Omnicom reported that CPMs for programmatic displays are down 40% since early March).
Publishers start educating buyers to fight this trend. Some of them, like CNBC, Bloomberg or the NYT, wrote an open letter to beg advertisers running ads on this type of content.
But education takes time.

AdTech companies are hurt

Technology providers are not having a great time either.
DSP, SSP, Ad Exchanges, all those players that provide market liquidity and performance optimizations, suffer too.

Some rumors go around. The industry is expecting some AdTech players to default on payments.
Publishers still remember Sizmek's bankruptcy last year. Sizmek was a DSP. It ended up in a situation where it was not able to pay for the bought inventory. On the other side of the food chain, publishers got partially after significant delays... or never got paid.
Therefore, they are adapting their selling strategies, preferring providing priorities to entities that are too strong to fail.

As you can expect, those decisions lead to selling more on the major platforms, like Google Ad Manager (AdX).
This practice weakens the position of AdTech challengers and decreases publishers' CPMs furthermore. Yet another negative impact of this crisis.
To fight this trend, some players, like OpenX and TripleLift, bought insurance to reassure publishers on payment. This is a smart move to get higher priorities.

At the time I am writing this post, no major AdTech player failed.
This was kind of expected, thanks to the usual 60/90 days of payment terms.
Let's hope everyone will survive.

Hopes and opportunities remain

Bad news is everywhere. Summarizing the above,

• advertising budgets get smaller
• publishers' traffic skyrockets
• programmatic CPMs decreases
• ads can't run on covid-19 related news
• AdTech intermediaries could bankrupt, and publishers are prioritizing robust ad suppliers over smaller ones. This is usually at the expense of the CPM
• uncertainty leads to layoffs in the industry.

Buying smarter

Nevertheless, some smart people will benefit from this crisis. And significant opportunities seem in the hand of the demand side.
Fill rates of the fixed-price inventory go down. Now is an excellent time to negotiate a discount on premium inventory.
Competition flew away from covid-19 news. Now is an excellent time to adjust the creatives and buy that cheap premium inventory.

Hopes for employees

I also have hopes for people who lost their jobs amid this crisis.
Some listings popped up. They reference thousands of companies that keep hiring in this environment.

• candor.co lists 8054 companies 
• layoffs.fyi offers similar listings and blog posts
• large tech companies provide directories of laid-off employees (e.g., Airbnb, Uber, Agoda)

Stay home and stay safe :)