This week’s Media Briefing looks at how publishers are strategizing for ad budgets in 2024 as they realize they cannot compete with the platforms for scale.
Last week, publishers said that closing out 2023 was just as painful a task as it was selling the rest of the year, with many Q4 ad deals still coming in just under the wire.
But four media execs said they also see a small light at the end of the tunnel when it comes to the conversations they are having with advertisers and agencies around planning for the first quarter and full-year 2024 campaigns. In fact, a few publishers said that these conversations started as early as July this year to plan out what long-tail campaigns might look like in 2024, specifically for those centered around experiential, exclusive talent and niche topic tie-ins and less on scale for scale’s sake.
Advertisers are “all in on ’24,” said Jason Wagenheim, CRO and president of BDG, who announced this week he was departing the company in January to join Footballco as its CEO of North America. Compared to this time last year, he said there are more inbound requests for proposals (RFPs) coming across his team’s desks for Q1 2024 than there were for Q1 2023. He did not share exactly how much RFP volume increased by year over year. But ultimately there is more optimism that “it’ll be a little bit more of a healthier, normal year [in 2024],” he said.
“We’re seeing a tremendous amount of activity and interest and have already done deals for 2024 and will continue to do so between now and the end of the year,” said Overtime’s chief revenue officer Rich Calacci, who declined to share how many deals were already underway for 2024.
Lindsey Abramo, CEO of World of Good Brands, which publishes Hunker and Well+Good, echoed that RFP volume and responses to her team’s proactive pitches to advertisers have increased from what she saw this time last year as the CRO of Leaf Group, before WGB was sectioned off as a separate company. But she added that budgets for 2024 are also bigger for campaigns than what she noticed last year.
Competing for scale is a losing game
The larger budgets that Abramo is seeing could also be due to shift back to brand awareness KPIs and full-funnel campaigns in 2024 that she said advertisers are eager to discuss. And media buyers are saying that they’re also focused on things like experiential and custom content when they talk to publishers as they look to social and search platforms to spend their clients’ scaled programmatic and last-click attribution ad budgets.
“The media landscape has grown and changed … YouTube, TikTok – there’s a number of different places where brands can go to attract the [audiences that publishers] had ownership initially,” said a media buyer who spoke on the condition of anonymity.
The M&A race in 2021 to consolidate the media industry and try to compete with the massive audiences that Google, Meta and other platforms offered advertisers seems to have not had the intended effect, according to two media buyers.
While buyers want “some element of scale” from publishers, “it’s not the be all, end all … we can get that scale in other places in other ways,” said Stacey Stewart, U.S. chief marketplace officer at UM.
And both Wagenheim and Abramo seem to have resigned to that fact.
“How can we compete right now right from a publishing standpoint? You’re no longer – not that you ever really were – able to compete on scale or trade on scale when you think about the platforms. So there’s this shift back to the idea of niche reigning supreme and being the ostensible expert in your specific domain,” said Abramo.
Another media buyer who spoke on the condition of anonymity said that while their clients are likely to only do one significant experiential activation per year, that campaign type is where “we can get the most value out of working with a publisher.”
A taste for talent and experiential
“I am seeing that in almost every campaign that we do and RFP that comes in, there’s a request for talent,” Abramo said, pointing to one full-year 2024 campaign for a CPG client that her team won, which came in as an RFP in July and initially went out to 45 different publishers. “It got down to the final three, [and the two other] publishers were trading predominantly on scale. We had no business to compete in that area, [but we] ended up winning because we were able to bring a really unique talent opportunity to table [and] it was in the wellness category,” she said.
Gallery Media Group’s chief brand officer Mary Kate McGrath said that nearly every client call similarly revolves around events. “I cannot get over how many people are [asking], ‘What is your experiential strategy? How are you gathering your community? It’s every call,” she said.
BDG revamped its experiential business in 2022 to use influencers and other talent to magnify the publishers’ presence at cultural tentpole moments like Art Basel and Coachella. By the end of 2023, that business will contribute eight times more to the company’s total revenue than it did in 2022. Wagenheim would not share exact figures.
Because of the positive reception from advertisers to events this year, Wagenheim said BDG’s advertising business has been reoriented around experiential, talent and premium content and has shifted away from display ads that are dependent on traffic to its websites. Now, only 15% of the company’s direct-sold ad revenue comes from display ads that live on its websites, he said. The company would not share how that percentage compares to a year ago.
“Traffic is down for everybody [and] anybody that thinks a site’s vitality exists solely with a Comscore number is just wrong in 2023,” said Wagenheim. “We’ve made our bets in the right places, and advertisers continue to come to us for things that Google, Facebook, linear [TV] networks and other big platforms out there just don’t do or can’t do.”
In 2024, Wagenheim said the goal is to expand its experiential business to have pop-ups around a dozen cultural moments on the calendar including the Olympics in Paris, Formula One races and the Super Bowl, all of which he said there’s demand for from advertisers. Many of these events remain built-if-sold so not all of the opportunities will happen, he said, but selling experiential has happened largely through proactive outreach on the part of the sales team and they will continue to push these offerings in the market for the coming year.
The precarious economy
Leaning into the niche media model might not be the saving grace that publishers are hoping for in 2024 if the economy takes another hit.
“I still think we’re just at the beginning of a very bad macroeconomic situation. We’re not at the end of it,” a media exec and investor told Digiday last month when asked about the state of venture capital investment in the media industry.
And if there is economic pressure put on marketers’ budgets, pulling the plug on high-touch custom campaigns or kicking the can down the road for expensive experiential sponsorships could be an inevitability, as we’ve seen in the past.
What we’ve heard
“[BuzzFeed is] killing all of us. [They] are killing valuations for the entire category.”
— a media exec at a digital publisher
SiriusXM to roll out new streaming app, lower price and rebrand in bid to reach younger demographic
SiriusXM announced an updated streaming audio app, lower subscription price and rebrand will roll out in December and early 2024, as part of a push to reach a younger demographic.
The announcements were made at a press event held in New York City on Wednesday, with guest appearances by Conan O’Brien, Andy Cohen, Kelly Clarkson, Shaggy, Marren Morris, Kevin Hart and Ashley Flowers.
SiriusXM CEO Jennifer Witz said onstage that the company’s core audience is Gen X and older. But SiriusXM has its eyes set on bringing in more customers who are younger and more diverse, Witz said. “SiriusXM currently captures 60% of the market for our core segment. Yet we only reach 10% of our growth audience today, leaving substantial room for growth,” she said.
Starting on Dec. 14, the audio company will offer a lower-priced, streaming-only subscription tier for $9.99 a month – $1 less than its current cheapest tier – in tandem with the launch of the new streaming app. This is the first change to come from research and tests on a simplified pricing structure, according to Witz.
“We believe this creates an extremely compelling value proposition for consumers, particularly the younger, more diverse growth audiences we’re going after to try our product for the very first time,” she said.
That’s a big part of the job Suzi Watford, SiriusXM’s new svp and chief growth officer, is tasked with. Previously Dow Jones’ CMO, Watford joined the company in January.
“We need younger audiences to look again” at SiriusXM’s subscription offering, Watford told Digiday on Wednesday. “We know that price is obviously a barrier to people, particularly with younger audiences and segments that we’re going after and particularly as everyone else is putting their prices up,” she said. In July, Spotify raised monthly subscription prices in more than 50 markets (specifically by $1 to $2 in the U.S.).
Watford believes SiriusXM is “complementary” to other audio subscription products. “We felt we had to price ourselves competitively and make sure that we’re offering great value for money.”
When asked if she had a specific goal for how big of a piece of the overall audience pie she wanted people younger than Gen X to make up, Watford said: “Bigger. More.” — Sara Guaglione
Numbers to know
6.7%: The amount that The New York Times’ digital advertising revenue increased by year over year in Q3, bringing in $75 million in the quarter.
$212 million: The amount of digital revenue Dotdash Meredith reported making in the third quarter. This figure is down 4% year over year, but it marks the best year-over-year performance since Q1 2022.
500,000: The number of subscribers to Bloomberg Media, which first introduced its subscription product in 2018.
$188 million: The amount of money that sports betting media company Better Collective is paying to acquire the Canadian sports media portfolio Playmaker Capital.
1: The length, in years, of Recurrent Venture’s now-former CEO Alex Vargas’s tenure. Vargas is the company’s third chief executive in three years.
What we’ve covered
Black-owned publishers say they still suffer from discriminatory keyword blocklists, miscategorized content:
- Black-owned media companies have shared their concerns that those keyword blocklists discriminately harm their businesses.
- According to recent conversations with half a dozen executives at Black-owned publishers, this issue hasn’t improved — even for their lifestyle content.
Read more about the persisting issue of keyword blocklists affecting minority-owned media here.
The case for and against Netflix’s premature venture into programmatic advertising:
- For ad tech bosses eyeing a partnership with Netflix, it might be wise to prepare for a bit more waiting.
- This rollercoaster of a business shows no signs of slowing down, especially as Netflix embarks on its second year competing in the advertising market.
Learn more about the pros and cons of the streaming giant’s ad business here.
Google uses public safety argument to deflect competition criticisms:
- Google’s advertising empire is under fire on several fronts, and in this week’s proceedings, the narrative took a new hue as the search giant’s defense spoke up in court.
- However, one thing appears universal: the defense strategy employed by Google.
Get the latest updates from Google’s antitrust trial here.
Instagram grabs largest share of brands’ and agencies’ marketing spend — even over Google:
- Instagram’s market share of ad dollars is growing according to new Digiday+ Research.
- According to surveys of over 400 brand, retailer and agency pros in 2021, 2022 and 2023, Instagram is the big winner this year, while the shine is wearing off of Google.
See which platforms are wooing ad budgets here.
What we’re reading
The Washington Post announces new CEO:
Former Dow Jones exec Will Lewis was appointed as The Post’s new chief executive this week, according to The New York Times. Lewis will start on Jan. 2, taking the helm after a year where the 145-year-old publication is estimated to lose $100 million.
USA Today filled the role of a Taylor Swift reporter with a super fan:
Bryan West was tapped as the new Taylor Swift reporter for Gannett’s USA Today, according to Variety. This hire sparked some criticism on X that, as a fan of the singer, West would not be able to approach the role with an unbiased perspective.
TikTok cancels its creator fund:
The social media platform responsible for revolutionizing the creator industry and igniting the short-form vertical video demand is discontinuing its $1 billion creator fund as of Dec. 16 in the U.S., U.K., Germany and France, according to The Verge.
The San Diego Union-Tribune fears the end:
Following the sale of San Diego’s 154-year-old newspaper to hedge fund Alden Global Capital, staffers are worried that there is no plan for the future from leadership, Nieman Lab reports.