Ad intel from publishers’ Q2 earnings
Plus, publishers call for AI regulation
Hi there,
We now have financials from a number of publishers – including the NYT, Dotdash Meredith, BuzzFeed, TechTarget, Gannett, Lee Enterprises, Ziff Davis, and The Atlantic – giving us some insight into the state of the digital advertising market.
Most saw year-over-year declines in the quarter, often blaming broad industry headwinds:
Dotdash Meredith shared how its performance varied by sector: “Retail, Beauty and Style, Travel and Auto sectors are growing, offset by ongoing weakness across Finance, Technology, Telecom and Entertainment.”
Revenue at TechTarget, a bellwether for the tech category, declined 26% YoY in Q2, dropping even more steeply than its 16% YoY decline in Q1. The company expects the challenging environment to continue, projecting a 24% decline for the full year.
Ad revenue is also down at The Atlantic, according to reporting by Axios. Advertising and events bookings, which represent about 40% of the company’s revenue, are down 26% compared to this time last year (though the company says it has reoriented its sales approach around profit instead of top-line growth).
Lee Enterprises saw 8% growth in digital advertising and marketing services, driven by its marketing services agency; but this is well below the ~30% growth it was experiencing in the first part of last year as the company pursues its digital transformation.
The NYT is an exception to the narrative. The company grew digital advertising revenue 7% in Q2, after declining 9% in Q1. Much of the growth came via The Athletic, which more than doubled ad revenue, growing by $2.9m. (The NYT grew digital ads by $4.5m overall.) The Times also noted growth in programmatic advertising, alongside declines in podcasts and creative services. In the earnings call, CEO Meredith Kopit Levien said premium display units, underpinned by first-party data, have been resilient:
“The core of our digital ad business, which is basically the big ad units, the premium ad units that we have with first-party data underlying them – that part of the business has actually been resilient in kind of the whole way through in a difficult ad environment, and that's what did really well relative to our expectation in this quarter… we believe that is a very good signal because that's sort of the fundamental thing we're doing. And what you're seeing us do now is start to extend those ad products, for the big ad canvasses and the first-party data, [to] other parts of the bundle – The Athletic is a real bright spot there.”
Kopit Levien also noted that advertisers are booking late, which makes forecasting difficult.
The NYT’s performance is encouraging, but it’s hard to draw broad conclusions from the Times about anything, given its uniqueness in the space. Taking everything together, I’m seeing an ad market that still looks quite challenging for publishers, particularly those dependent on weak industry categories.
Stay tuned next week, when we’ll review subscription-related insights from these earnings reports.
And here’s the latest news in digital media:
Publishers call for AI regulation. In an open letter – signed by Gannett, the AP, Getty Images, the News Media Alliance, and others – publishers advocated for transparency in the data used to train models; consent of IP holders for use in training data and outputs; and the ability to collectively negotiate with AI model operators, among other recommendations.
Publishers:
Puck raised a $10 million series B.
Penn sold Barstool back to founder Dave Portnoy for $1, and Penn is partnering with ESPN to rebrand Barstool Sportsbook to ESPN Bet.
Fox Business will host the second GOP presidential debate, after Fox News hosts the first.
CNET is deleting old articles with a view that it will improve SEO.
Gizmodo’s EIC filed a lawsuit alleging that the “Tetris” movie adapted his book without permission.
Platforms:
OpenAI will fund a journalism ethics initiative at New York University.
X started sending ad-share payouts to smaller creators.
Spotify is expanding its AI DJ to more countries.
Interesting Reads:
A piece about collaborations between public libraries and local news outlets.
An essay by Zach Seward about keeping score at a baseball game with his son, and how it relates to our relationship with media.
An NYT profile of fashion journalists running independent newsletters on Substack.
An interview on
podcast about how comedy publisher Literally Media is forging partnerships with creators.
Thanks for being a part of Business Side’s public beta. Have a great day!
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