Ad-Tech Players That Offer Nonperishable Services Are Best Suited for This Current Landscape

They’re the companies that offer a product that’s need can persist over time

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The disruption we’ve seen from Covid-19 is unprecedented in both speed and scope. And while governmental and self-imposed social distancing is absolutely necessary, these measures create harsh realities for the majority of industries. In the media world, Covid-19 has perhaps created the greatest imbalance between media consumption, which has skyrocketed, and advertiser spending, which has plummeted.

Available inventory on programmatic media platforms such as The Trade Desk has grown dramatically, while CPMs have decreased during March and April. Given the inherent nature of the programmatic exchange’s business model, the increased supply and decreased demand tell the story of growing consumer media consumption that is not commensurate with advertiser spending.

TV viewership has also increased dramatically as people isolate at home. Sling reported an increase of 15% in viewership during the pandemic, HBO’s audience grew 20% in late March compared to the prior four weeks and broadcast TV rating’s decline even slowed during this time.

This imbalance between ad inventory and ad spending shouldn’t surprise anyone. During the pandemic, consumers equally seek an increase in news and information and an escape from that same information. For brands, the behavior often becomes an exercise in cost-cutting. Rightly or not, marketing is often viewed as a nonessential expense, and thus, it is typically one of the first necks on the chopping block.

Ad tech, programmatic and certain forward-thinking brands are poised to make meaningful gains if they stay in the game.

Despite this, ad tech, programmatic and certain forward-thinking brands are poised to make meaningful gains if they stay in the game. In the simplest of terms, most brands have products or services designed for one of two types of opportunities: perishable or nonperishable.

An example of a perishable opportunity is a business like a pizza chain. If I stay home and don’t buy a pizza today, I’m not going to buy two pizzas tomorrow. The opportunity has passed, for that day at least.

Conversely, a nonperishable opportunity persists. A great example of a business that serves nonperishable opportunities would be computer manufacturers or tire brands. If I don’t buy computers or tires today but have a need for them, I will still have a need for them when Covid-19 passes and I can eventually buy—and indeed I will. Further, nonperishable opportunities compound over time as other buyers come into the market. While immediate sales may lag behind in the short-term, over the longer-term, product or service demand that is currently being constrained will continue to compound and will eventually be released.

Brands that sell to nonperishable opportunities stand to gain the most from advertising right now while media consumption is high and advertising rates are low.

As we eventually return to normal, consumer demand will be available to be won or lost. Brands that don’t continue to invest in advertising now lower their chances of tapping into this later. It’s not easy to see the opportunity through the risk, but the U.S. economy has time and again proven resilient and has rebounded with force following every prior recession.