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The immediate importance of revenue diversification

Since the beginning of the COVID-19 pandemic, we’ve been tracking the trickle-down effects that fluctuating traffic and advertiser spend have had on publishers in our network. The way we do this is by calculating RPM, or revenue a publisher generates per thousand pageviews. This lets us track trends in revenue across all of our products.

It’s no secret that advertising revenues have dropped due to the COVID-19 pandemic. That’s exactly why we’ve been so intent on helping publishers revenue diversification (although that’s certainly not a new focus). Our data bears out that importance: publishers with diversified revenue streams are better-protected from fluctuations in the display marketplace.

The chart below shows month-over-month RPM trends from February through April 2020, separated by product. We compared RPM generated by our advertising products with RPM generated by //Commerce.

As we can see, there’s been a drop in RPM for both //Advertising (-29%) and //Commerce (-12%) publishers. However, that drop is significantly lower for publishers using //Commerce.

That’s partly because people are still buying. As per the recent Publisher’s Corner hosted by What’s New in Publishing, home goods, fitness, sporting goods, electronics, and beauty products in particular are seeing a lot of traction. Again, our data bears this out: we’ve seen an increase in clicks across our //Commerce network as eCommerce becomes the only solution for people under stay-at-home orders.

There’s a simple lesson here: revenue diversification provides revenue insulation.

Of course, merchant rates are also fluctuating, and it’s important to diversify on that front as well. We’ve put together a //Commerce trend report that helps our publishers track changes in EPC by merchant, and we also offer an extra layer of intrinsic protection with our Optimize feature for //Commerce.

The longer-term takeaway is that the importance of diversification won’t stop when the pandemic does: it’s likely that what we’re seeing now mirrors what the ad landscape will look like once the internet fully retires the third-party cookie. COVID-19 has merely accelerated the effects. Publishers need to be nimble and flexible now, so that they’ll be better-prepared for future disruptions.

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