“Covid Economy” Puts Focus On Performance Marketing

The Covid-19 epidemic has had untold impacts on the online economy as a whole, and the Performance Marketing industrynever a household subject by any means– has suddenly been thrust into the news due to a number of different factors.

The most notable of these was the impact that the economic shutdown had on digital advertising revenues – especially for the largest (and most infamous) online companies, like Google and Facebook (as well as others such as Oath and Taboola).

Basically, major brand advertisers cut their ad spend dramatically, initiating what would have been a very negative impact upon some of the world’s largest companies.

As per this CNBC article:

With millions of Americans ordered to stay home and unemployment spiking to historic rates, the top online ad companies, led by Google and Facebook, are suddenly stuck with too much inventory, forcing them to cut prices even as web traffic has climbed.

The big spenders are bailing. Expedia Group Chairman Barry Diller told CNBC’s Squawk Box on Thursday that the online travel agency will likely slash ad spending by at least 80% this year to under $1 billion. Airbnb said in late March that it’s suspending marketing. Airlines and cruise companies are cutting costs across the board and have little reason to pay to promote their products and services.

While this was happening, Performance Marketers kept on driving traffic like they always did, and in many cases expanded due to the lower cost of traffic.

With this being the case, the Performance Marketing industry instantly became a vital lifeline for Facebook, Google, and other major advertisers, who suddenly found themselves relying on Performance Marketing for a much larger amount of their revenue than they ever had before.

This earned the Performance Marketing industry a level of recognition that it has not been used to, and numerous figures pointed out the extent to which Google and Facebook had become reliant upon it.

 

Unfortunately though, not all its publicity has been positive.

Tales of “Digital Advertising Exploitation” vis a vis Covid-19 became prime clickbait, and Buzzfeed News was quick to meet the demand.

On April 21st they released an extensive article titled “The Emails Promising Cornavirus-Protecting Masks Seemed Too Good To Be True. They Were”.

 

 

The article certainly represented a deep-dive into the subject of online mask sales, but betrayed an intensely negative outlook on the Performance Marketing industry:

…Into that climate of fear and uncertainty came SafeMask, an overpriced, initially unauthorized, and misleadingly marketed mask that may be the most promoted piece of safety equipment on the internet….

…As fear grew and the death toll mounted, so did the intensity of SafeMask’s marketing.

…Meanwhile, misleading SafeMask emails were blasted by the millions…..

…rogue affiliate marketers…

…Affiliate marketing is a commission-based sales model known for using aggressive and deceptive tactics to sell products and services…

…email blasts, online ads, social media promotions, and other scuzzy tactics…

Unfortunately, a quick search through their archives shows the article in question is one of many from Buzzfeed that portrays Performance Marketing in a negative light.

 

In other Performance Marketing related news that was stirred up via Covid, Amazon made the decision to reduce the percentages paid out to it’s affiliates.

From Search Engine Land:

The Amazon Associates program is set to cut commission rates for furniture and home improvement products from 8% to 3% and for grocery products to just 1%, down from 5%, CNBC first reported Tuesday. Everyday item categories will be especially hard hit, with Grocery, Health & Personal Care and Amazon Fresh to see commission rates whacked down to just 1%…

…The cuts could be a blow to publishers, influencers and content creators that rely on Amazon affiliate revenue streams at a time when sponsored content and ad revenue is already drying up. Expect to see campaigns shift to the product categories with higher commission rates.

Indeed, with Amazon Affiliate ‘Content Sites’ making up an extensive economy in and of themselves, and populating the search results for many common queries, this was rather serious news.

Even Forbes published an article on the negative impact the decision would have upon Amazon Affiliates.

“This is no doubt a harsh blow, not only for large digital media outlets and publishers, but also for smaller website owners who have spent the last several years building up content dedicated to recommending products purchased on Amazon,” says Kelly Fedio, founder of Digital Shelf Strategy, an Amazon consulting firm.

“For these smaller businesses, sadly, their livelihoods could very likely get wiped out.”

The article continued:

Reddit posters registered their dismay over the fee cuts: “What a cruel time to do it, but it is, as you say, capitalism’s way,” wrote okletsdothisthang last week after the changes were announced. “Lots of sites are about to go on sale, too. I know we say these things every time this happens, but to add one last cliche: diversify diversify diversify.”

Still, with the overall Performance Marketing industry seemingly entering a renaissance, not even the Amazon news could dampen the sense of opportunity.

As the Forbes article concluded:

Fedio says there are other opportunities and affiliate networks to consider. “Amazon is by far not the only game in town….”