Flat is the New Up – Marketplace Pulse Insights: April 9

Header image of April 9, 2020 IX Marketplace Pulse Newsletter with photo of Will Doherty

Flat is the New Up – Marketplace Pulse Insights

It’s now Q2, and everyone is in the process of adjusting their expectations. What does that mean in simple terms? Flat is the new up. Growth is an unlikely prospect while the global economy is still in a voluntary shutdown, but flat is good. Flat is fine. Flat will get us through. And thus for many – we have to get back to Flat.

While our industry has a tendency to conflate a few struggling or failed companies with the entire sector, the foundations of programmatic remain strong. The DSPs responsible for a disproportionate amount of ad spend have solid balance sheets, the backing of strong parent companies, and experienced executives. While ad tech isn’t as frothy as it has been in past years, that’s a good thing. Maturing companies and industries are not volatile. They are predictable and reliable. Boring, even. Growth is harder to achieve, more meaningful innovations will be developed, and we’ll witness a contraction of rates. Buyers and Sellers will benefit from the contraction in the short and long term and set the table for a more stable base as the world navigates a new normal. Strong companies will emerge in the next few weeks to capture market share and drive value. Once the initial shock wears off, we will see incumbents strengthen their position.

While the trades rush to be the first to write about ad tech’s demise, the truth is far less intriguing.

None of this is meant to come across as cavalier. Right-sizing and consolidation may fix a balance sheet, but there are real human costs to such moves. At this point, few of us don’t have friends, family, and colleagues impacted. Uncertainty itself can be just as vexing. But if I can bring some perspective at all, it’s that I do believe our industry will recover and come out stronger post-COVID even if it doesn’t feel that way right now. Hang in there. Be kind to one another. It’s going to be ok.


Image of graph displaying ad spend trends by buyer category (industry) for March 2020.
*Tom Hanks is when this got real. Wilson is when things went flat. This image shows the graph of buyer spend by industry .

PHARMA (Sub category within CPG vertical): This is a category that at first glance seems recession proof, but I am now predicting that it will actually have a quiet Q2. People certainly need prescriptions and OTC products now more than ever. But in some respects, that’s exactly the problem. Tylenol, Advil, etc. have a bit of a toilet paper problem. People are buying them up quicker than stores can stock shelves which is creating inventory challenges. Marketers are going to pull back until things stabilize.

Prescriptions have a different challenge that wasn’t obvious to me at first. Most medical professionals are dealing with an unprecedented crisis. All treatments and appointments deemed non-essential are being cancelled. If doctors can’t see patients outside of an emergency setting, then naturally prescriptions may be impacted. Pharma’s sales pipeline is compromised. They will need to rethink more than just messaging but distribution as well.

Video of Ads of the World
Source: Ads of the World

AUTO: As predicted, this category dropped significantly with the start of the new quarter. It is going to take a bit more time for the automotive category to reconstitute itself. Many automakers know from past downturns that favorability does not recover to previous levels after pulling ad spend. However, this is a whole new challenge for the sector. Folks literally cannot test drive or otherwise shop for a car right now. It’s not simply a matter of economic insecurity. In previous recessions, the sales pipeline still worked. It no longer does.

This is why we are seeing strong new messaging coming out of Detroit even if we aren’t seeing the same ad spend:

Bravo, Doner.

This crisis may end up acting as a programmatic accelerant of sorts. Automotive is one of the last categories to adopt programmatic wholeheartedly. The category still executes an outsized volume of more traditional deals. Momentum is hard to stop, and traditional has had it for some time. But the world is stopped, and with it that momentum. When things come back, it may end up being the perfect time to change the preferred buying model for the category. Watch this space, and look out for others that may have a similar outcome.

MEDIA: Media ad spend has continued to show its resilience to the current climate and is now trending higher than pre-COVID times. However, it’s not significant enough to shoulder the blows from other categories that are down. I call it out because I don’t believe its growth is an anomaly. There is going to be a war for consumer attention across streaming platforms. Netflix built its subscriber base effectively using programmatic before it had any real competition. They harnessed its flexibility and scale masterfully. Newer entrants will now stake their claim using the same methods. This will be an interesting trend to follow.

OPEN MARKET: Programmatic’s open market is going to have a moment in the sun. Direct deals that require integration work, custom creative, and more planning have slowed, and that’ll likely be the case for a while. Simply put, they don’t offer the speed and flexibility that Marketers require at the moment. It is going to be a while before the world settles into anything predictable. Agility is king at the moment. Commitments, not so much. This more than anything will be driving the channels buyers choose to invest in.

What does this mean? Publishers need to revisit their open market pricing strategies. Buyers will want to pay particular attention to win rates and look to find value in a saturated supply chain. For Publishers, it might be time to dust off old pricing strategies. For those Brands or categories that have traditionally been Direct stalwarts that you’ve tended to impose outsized floors against in the open market – you might want to rethink this strategy for the next little while. 

If Brands aren’t buying directly, but are leveraging the agility the open market affords them, you should consider enabling the option while we’re in lockdown. I can’t stress this enough: you can revisit these strategies later. You have to make adjustments. When we emerge from our self-imposed isolation, all bets are off – dust off your old floors and have at it. 


I have been speaking about Marketers needing to retool their messaging. That is happening quickly, so much so that we’ve entered the parody phase of the transition.

Video of Matt Buechele (from his tweet) on 'brands right now'
Source: Twitter, @mattbooshell

Planning cycles are going to be very different this year. With newfronts and upfronts pushed back, Agencies will extend their Q3/Q4 planning well into June. Normally this process would be wrapped up in May. For Publishers, this gives you extra time to put together value driven activations for your Buyers. Q2 is a time to emphasize savings, value, and flexibility. These themes are resonating strongly with Marketers at the moment. It’s also time to innovate. Find the balance between new ideas and experimentation and a rigid focus on what works. Use this additional time wisely. Think beyond commitments to programs that offer speed and flexibility. 

Cannes / Events et al: With the tentpole events all but assuredly cancelled for the remainder of the year, there will be a wholesale evaluation of their futures. When the world does reboot, I suspect some of the more lavish boondoggles might not boot back up with it. CFOs, long suspicious of the ROI on yachts and rosé, will be less likely to fund it. Pour one out for the branded swag companies while we’re at it. I see less chargers, notebooks and water bottles in our future as well (The amount of ad tech debris I am finding at home since being in isolation is horrifying. Much like the canals in Venice, our junk drawers and planet will probably benefit from this pause).

I suspect smaller, more cost effective, and, likely, less events will fill the gaps in 2021. There may even be some travel-shyness for a while on account of fears of a second emergence of the virus. The real question is what happens to the publications that rely on these events to prop up their bottom line? We may see some changes (maybe M&A??) across the industry trades we’ve all come to rely on.


Just making it to April felt like an accomplishment for many folks. By now, some semblance of routine and normalcy has returned. It’s different than it used to be, but it doesn’t feel foreign any longer. Seeing the news and talk shows broadcast from living rooms is less jarring. Trying (and failing) to obtain a delivery time from online grocers is just in a day’s work now. Hopefully you, your family, and colleagues are all doing well. Historically, spring is about renewal. It’s an apt metaphor for where we are right now. Refresh your thinking on what success looks like in this new paradigm. Look for green shoots in your data and clear a path. Marketers are going to slowly make their way back over the next few months. Be there to nurture their entry.

If you have any items you’d like us to consider for our next edition, please email [email protected]

Stay safe, happy and healthy. 

Will Doherty
EVP, Global Marketplace Development

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