With ad rates falling, Snopes can’t keep up with coronavirus misinformation
In the last 30 days, fact checking site Snopes had a 44% increase in traffic over the previous 30-day period, bringing in more than 36 million unique visitors as readers try to debunk the fake coronavirus news that is circulating right now. Despite that, however, the company’s ad rates are shrinking.
“There has been a decrease in CPMs as we’ve been approaching the end of the quarter and the expectation is that it’s going to drop off a cliff. We normally anticipate quarter two going more up and to the right, but we expect it to be flat or worse,” said Vinny Green, Snopes’ vp of operations.
The other issue of being a bootstrapped media company is that despite there being a higher volume of news to fact check, Green said Snopes’ business model isn’t enabling the company to hire more people to the newsroom.
“The idea that we were going to keep our team operating at 120% and combat the onslaught of misinformation wasn’t going to happen,” he said.
The company also provided it staff of 17 unlimited paid sick leave if needed, cash bonuses of $750 and scaled back routine content production so that the editors and reporters can focus more on the most pressing news items.
“We cannot come to the next pandemic and not be able to increase our capacity,” said Green, adding that the goal for Snopes’ leadership at this time is primarily to figure out how to strengthen its business model. “The choice is we either burn out or employees by chasing traffic or we say to the staff, we can’t treat this infodemic any differently because we literally can’t afford to.”
In December, Green told Digiday that advertising was antithetical to Snopes’ mission and that the goal was to transition to being mainly reader revenue-funded through the help of its membership model, which launched earlier this year. And while currently Snopes has 7,500 founding members (a founding membership costs $30), he said that he doesn’t expect this revenue stream to ever be the lion’s share of revenue that Snopes can support its entire operations on.
Snopes was profitable last year, according to Green. Its revenue breakdown, however, still puts programmatic advertising as the top revenue driver, with currently 55% of revenue coming from that stream. This has been declining since the beginning of the year, though. Year-to-date, 59% of the brands’ revenue was from programmatic ad sales. The rest of the revenue comes from the membership or contributions from readers, he said.
Andrew Goode, head of programmatic at Havas Media, said that like the rules of supply and demand, just because traffic is up for many publishers due to audiences’ consumption habits changing during quarantine, it does not mean that media buyers will buy the inventory. The priority will remain around finding meaningful places of engagement with the consumer.
In the case of Snopes, however, because of the general increase in coverage and fake news around coronavirus, a lot of the site’s fact checks cover coronavirus as well, Goode said that it leaves Snopes vulnerable to the issue of brands putting “coronavirus” towards the top of their blocked keyword lists and losing out on programmatic revenue.
Goode said 80% of Havas Media’s clients are blocking coronavirus content.
As for responding to Green’s prediction that Snopes will see a significant drop off of programmatic advertising revenue in the second quarter, Goode said he’s “anticipating there will be some impact” on programmatic spending as clients evaluate the economy and suspend their media spending. He declined to get more specific about what his clients were saying, however.
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