Advertisers usually lose money on ads

Online mediaAdvertising revenue sink: Algorithms to like "Corona" Not

Advertising-financed websites should actually earn a lot of money because their click numbers have risen rapidly due to Corona. But don't do it. This is probably due to a special algorithm.

People are at home right now: in quarantine, in self-selected isolation, in the home office and on short-time work. At the same time, the demand for fresh information is huge. The result: The number of clicks on media sites on the Internet is exploding, and the number of visitors is rising rapidly.

The advertising revenues of these sites, however, paradoxically do not skyrocket. On the contrary, they are even going back. For example, the online editions of "Business Insider" or the "New York Times" report it. There, the advertising income from the online presence fell by ten percent.

"Worldwide, advertising-financed websites are observing that advertising revenues are declining despite significantly increased reach."
Michael Gessat, Deutschlandfunk Nova reporter

This comes as a surprise to the affected site operators, says Deutschlandfunk-Nova reporter Michael Gessat. Because normally the following rule applies on the Internet: the more traffic and range, the more money from advertising.

Brand safety algorithms are to blame

The reason for the decline in advertising revenue is probably special algorithms.

Nowadays advertising is user-specific and individual. It is based on the context, i.e. on the content that the user is looking at.

It is particularly important to the clients that their advertisements and their brand names do not appear in certain, negatively connoted contexts, for example with fake news, conspiracy theories or hatspeech. The whole thing is called brand safety.

The Corona environment has no positive connotations

The algorithms are "not programmed overly intelligently," says Michael Gessat. Usually, they simply respond to specific key words simply and simply. They are interpreted as positive and appropriate or negative and inappropriate to the brand message. And the term "Corona" does not suggest a positive, pleasant environment. It is very often blocked by the algorithms.

"According to statistics from ad analysts, the term 'Corona' ranks third among the keywords blocked by these algorithms."
Michael Gessat, Deutschlandfunk Nova reporter

The potential customers are currently very interested in everything that has to do with Corona. This is nothing positive, but it is also not the same category as hatspeech, conspiracy theories or fake news. That is why the representatives of advertising-financed sites are now taking a flight forwards: They appeal to advertisers to urgently review these algorithms in the current situation or to switch them off.

Some companies are deliberately reducing their advertising expenditure

In addition to the effect triggered by the algorithms that are no longer suitable, there are also companies that consciously decide to reduce their advertising expenditure first.

The obvious background: Many companies had to close their shops because of Corona anyway. You can also freeze or at least reduce your investment in ads. Either because they actually can't sell anything anymore. Or because they donate their advertising budget to fight corona. Coca-Cola, for example, does that. This money is then missing from the media financed by advertising.