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Can Covid-19 force adtech reset as media buckles under financial strain?

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By John McCarthy, Opinion Editor

April 27, 2020 | 6 min read

The current pandemic is magnifying pre-existing flaws in adtech. From systemic inefficiencies to limited oversight, to a value-draining lack of context around ad placements, the news media is wrestling with providing crucial coverage against a significant revenue shortfall.

Surging UK digital news readership dethrones Google, says PAMCo

The Sun, part of News UK, is a member of Ozone Project

Recently, execs from news body Newsworks, news ad collective the Ozone Project and media buying agency Mediacom, talked The Drum through how solutions are forthcoming and are being accelerated by the sudden need for a fix.

Earlier this month, Newsworks, estimated that over-zealous digital brand safety measures that stop ads from appearing in stories about ‘coronavirus’ are costing the news industry £50m in lost advertising revenue over a period of three months. Most marketers, it argued, were unaware of this.

Speaking during The Drum’s Digital Transformation Festival, Tracy De Groose, executive chair of Newsworks, said: “It has turned into a system that operates in isolation of anyone looking at it regularly.

“There’s been a number of challenges building up over the last year or two, be it around brand safety, fraud, declining ROI, or what online advertising really funding."

But, she emphasised, the lockdown is forcing action. "We are all starting to think about what can we do better. And how we can re-emerge stronger.”

The problem is under the microscope now as Covid-19 earning potential has been quashed while the media focuses on the issue. “We’re writing the one story everybody needs to hear right now, we're seeing audiences of 34 million people every day reading our journalism, and yet so much inventory is blocked because of coronavirus blocking,” De Groose explained.

Damon Reeve, chief executive officer of The Ozone Project, the ad alliance that has united competing news brands The Guardian, Reach, The Telegraph, News UK, DC Thomson and even Stylist magazine, agreed that it is time to get the right practices in place. He said: “I don't think anyone could ever have predicted the amount of change and disruption we’ve seen.”

Even before the pandemic, GDPR and the investigations of the ICO, were bringing “fairly monumental change” that altered how data is used, processed, and targeted. “The pandemic has forced a rethink about what is actually working. We’re a part of many of those discussions and it has really accelerated them.”

Geoff De Burca, chief strategy officer of Mediacom, offered a client-side view of the situation. The agency has been busy, resetting strategies for every partner. Objectives are changing to meet business realities, channels are shifting and creative is being remotely tailored to meet these needs.

“Lloyds Banking Group, Tesco, Boots and Sky, for example, are all spending in news brands because it is such an important way to reach the nation. The other opportunity is in TV as the pricing incredibly good value at the moment. So if you have a message you want to get out to the nation, that’s where to do it.”

But in the realms of digital advertising, the keyword blocking issue is now visible and “high” on the agenda. “We’re encouraging all of our clients to remove coronavirus and Covid-19 terms from their blocklist. And we're getting a really good response to that”.

In news, we are seeing record readerships across the board on vital Covid-19 articles, but editorial teams are having to contend with shrinking ad income, remote working and moving audiences in the space of weeks. The playbooks have been tore up and they are redesigning around content tiers that can provide the most utility to concerned and locked-down audiences.

As De Groose said: “News audiences have been growing for about a decade, and sadly, ad revenue has not been following that growth. We have to look at the mechanics of how the online market work.”

The current adtech model puts local media in dire straits - although in the US Vox and NBCU are trying to join the dots between local and national newsbrands - put them on the national radar as part of a wider network. Meanwhile, Google is running a fund to help support worst affected titles - the other side of this coin is seeing the Australian government exploring how to extract more support from the digital giants.

De Groose said: “I think we all should think more about what type of world we want to be part of. Advertising has always played a really important role in funding the content that we want and that should continue.”

Reeve leaned into the mechanics of programmatic to help find a solution for his publisher partners. “These technologies have generally been applied in fairly broad brushstrokes and treated all things the same. And the truth is that all editorial and content is not the same.”

This absence of context about the quality and tone of the content, how engaged audiences are, the quality of the environment and brand, plus the load and format of nearby ads are just some factors worth considering.

Reeve said: “We're starting to have more grown-up conversations about the way in which tools and technologies are used, and what are the right environments for brands in context.”

The stringent brand safety measures may actually be sending ads downstream to unregulated, lower quality environments.

He concluded: “All of a sudden, you've now lost the trusted quality environments and safe havens because they’ve been blocked, which introduces a greater risk for the brand."

You can watch the full interview here and view more content from The Drum's Digital Transformation Festival here.

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