Weekly Roundup: US Media Spend, Publishers Vs. Pandemic, Apple News+ Troubles.

Summary

• Media spend in the US was down by 19% in the H1 2020. Q2 suffered the most with downfalls of 34%, 31.6%, and 30.2% in April, May, and June respectively.
• The pandemic, the uncertainties around Brexit, and the dominance of tech giants are among the biggest perceived threats in the industry. Many believe that more transparency is required from the tech giants’ side.
• A diversified portfolio and multiple sources of ad revenue helped Future PLC with weathering the current crisis. The revenue grew by 33% in H1 2020 and the publishing group expects more than $100 million profit in 2020.
• The Athletic is betting on subscriptions and podcasts during the pandemic. It has acquired the best sportswriters by offering high salaries to attract more audiences.
• In the past 12 months, the publisher has gained more than 300,000 new subscribers who are paying $59.99 or $49.99 per month. It has devised a new strategy for converting visitors to subscribers on the spot. Read it in our newsletter.
• Apple is bypassing publishers’ traffic with its new Apple News+ feature. When a user is reading a story from an Apple News+ publisher then a smart banner will prompt the user to read it on the Apple News App.
• Facebook was seen putting its ads on publishers’ sites without their permission. On one instance, Facebook even placed ads on a site that runs no ads.

Latest Ad Tech Trends for Publishers

US Media Spend in H1

Media spend in the US was down by 19% in the H1 2020. Q2 suffered the most with downfalls of 34%, 31.6%, and 30.2% in April, May, and June respectively. The decline adds up to $28 billion in absolute terms. 

The impact was different for different categories. For instance, throughout the H1, travel brands spent 50% less, whereas cleaning and household supply brands spent 12.3% more. Tech companies did well too, for instance, Amazon was among the top advertisers with 14.8% increased ad spend.

Biggest Threats to Advertising in the UK

LiveRamp recently took the opinions of 506 UK marketing decision-makers about the biggest threats to their industry. Here are the responses:

• 36% of the respondents see the current pandemic as the biggest threat. 
• 26% are afraid of the uncertainties around Brexit.
• For 25% of the respondents, the dominance of tech giants like Google, Amazon, and Facebook is worrisome.
• 36% believe that more transparency is required from the tech giants’ side.
• 33% think that the tech giants need to follow some principles for the welfare of the industry.

Takeaway:

The negative impact of the pandemic will subside slowly. Last week we saw how the ad spend is improving across all verticals. Q4 may act as another booster for it.

The influence of the tech giants, including Apple, is something that cannot be denied. The industry is trying its best to fight the mighty players but we are sure that it’ll take a lot of time and effort to make the playing field even for everyone. 

Weathering the Crisis

Future PLC

Future PLC’s revenue grew by 33% in H1 2020 despite the pandemic. The publishing group expects more than $100 million profit in 2020. How did the publisher do it?

• Future PLC has a broad range of publishing brands. Its publications like Techradar and PC Gamer got a big boost from the pandemic. So the losses got minimized with the help of a diversified portfolio.
• Its revenue sources are not concentrated too. Apart from ads, the publisher earns from e-commerce and events as well.
• It started cutting costs at the right time and in the right way. It closed six of its print titles in early April and reduced freelance budgets as well.

The Athletic

The Athletic is a sports publisher. We all know how hard the pandemic hit the sports publishers. Its co-founder says, “It should have been the end for us.”

During March, there were some days when less than 100 people were subscribing to the publisher, whereas normally, The Athletic gains thousands of subscriptions every day. But the time has changed and now the Athletic is gaining more subscribers than ever. It has also reached the 1 million subscribers milestone.

So, what makes this sports publisher different from others?

• The publisher has a subscription-only business model on the site, so a lesser dependence on ad rates during the pandemic.
•  The publisher is also betting big on podcasting. It runs 120 podcasts for its subscribers paying $64 a year.
• It has acquired the best sportswriters by offering high salaries.
• It is bundling its subscriptions with Bloomberg and giving away free subscriptions too.

Politico

Politico is another successful publisher aiming around 10% growth after the pandemic. Its ad revenue is already back to the pre-pandemic levels. 

The publisher has a digital-first approach. Just like many other publishers that successfully maneuvered the pandemic wave, Politico is also less reliant on ads. The pricing of Politico Pro Intelligence starts in four figures. The publisher is able to command such a high price due to its highly concentrated niche focussed on policymakers, lobbyists and contractors, etc.

Takeaway:

Publishing is a very competitive industry. The barriers to entry are also not very high. The majority of the publishers are dependent on ad revenues only. We have observed that the most successful publishers during the pandemic were the ones that differentiated themselves with quality content, and spread their revenues across multiple sources. 

Learning from the Atlantic’s Subscription Strategy

The Atlantic hoped to gain 110,000 subscribers last year. In the past 12 months, the publisher has gained more than 300,000 new subscribers who are paying $59.99 or $49.99 per month. The results are almost 3 times better than their expectations. So what’s the magic behind this extraordinary success?

The Atlantic has realized that some pieces of content can convert visitors to subscribers on the spot. But such subscribers can also have a high churn rate. To reduce the churn, the Atlantic makes sure that the subscribers develop the habit of reading its content.

The visitors who subscribed instantaneously are kept in a separate cohort. The subscribers in this cohort follow a different onboarding process. First, they are pursued to sign up for the publisher’s newsletters and then for following the publisher’s magazine and authors on social media. The publisher believes that three visits per month are enough to keep the subscriber from lapsing. When a user has not engaged at least three times in a month then the publisher pushes its articles in front of the reader through paid social media ads.

There are many other changes that the Atlantic made to increase its subscriptions. From changing the color of the buttons to reducing friction in the payment process, enabling Facebook Instant Articles and AMP pages for subscriptions, the Atlantic has left no stones unturned.

Takeaway:

Data intelligence can give you an edge over your competitors. The Atlantic used the data to make informed decisions and their efforts paid out better than expected. In the current era, data is available in abundance. Build data-driven processes and decision systems to ensure that you are ahead in the competition.

Publishers Vs Walled Gardens

Apple

We have seen countless incidents when it felt that Apple is misusing its power to benefit itself. Something similar is happening once again with Apple’s new OS update (and it’s not about IDFA).

Scroll CEO Tony Haile noticed that Apple is bypassing publishers’ traffic with its new Apple News+ feature. When a user is reading a story from an Apple News+ publisher then a smart banner will prompt the user to read it on the Apple News App. The company says that it is doing so to enhance the user experience.

The publishers generally use this banner to prompt users to install their proprietary apps. It’s not clear whether the publishers would be able to do it again or not. Intercepting the publishers’ also means taking the control away from them, Apple should avoid such malpractices.

Facebook

While Apple was taking away publishers’ traffic, Facebook was seen putting its ads on publishers’ sites without their permission. On one instance, Facebook even placed ads on a site that runs no ads. Below is the image of the site with an ad placed by Facebook.

The issue took place with Facebook’s iOS app. The users visiting publishers’ sites through the app were seeing these interstitial ads. Facebook says that it was a technical glitch and just like always, “Facebook has apologized.”

Moments that Matter

• Better conversion measurement for video ads on YouTube and our network – Google Ads
• Inside the Collapse of Ad Tech’s ‘Once in a Lifetime’ Merger – ADWEEK
• State of play: Where the battle with Google and Facebook to pay for news is hottest – Digiday
• Exposing the hidden data ecosystem of the UK’s most trusted charities – ProPrivacy
• Oracle Data Cloud Kills Off Its AddThis Audience Business In Europe – Adexchanger