- Online shopping got a boost during the pandemic. FedEx posted its highest quarterly revenue ever. The growth is expected to continue as 82% of the consumers will shop online for the holidays.
- Apple’s iOS 14 has a new feature that can affect publishers. With the new update, not only Safari, but all browsers will block cross-site tracking by default.
- The ad revenue in the US market decreased by 7.2% in the H1. But at the same time, ad sales grew by 5.7%. The ad budgets will post a 4% gain in 2021, which will result in the market recovery.
- BuzzFeed’s new approach to sell ads helped it attract more advertisers despite the pandemic. It didn’t just ask its clients to buy ads on the platform, instead, it told them the current behavior of the user and offered to craft the ads accordingly.
- Reuters Institute for the Study of Journalism at Oxford University discussed the post-pandemic business model for news. It says, after the pandemic started, the number of people who are ready to pay for the news has increased exponentially.
- Many publishers are making millions of dollars from product licensing. Publishers like Meredith, Hearst, BuzzFeed are partnering with retailers and manufacturers to create products and merchandise that represent their brand.
- The Economist focuses on LinkedIn for subscribers. The number of subscribers from LinkedIn has tripled YoY for the publisher, at the same time, the traffic from the same source has doubled. Read the strategy in this newsletter.
Latest Adtech Trends for Publishers
The Holiday Season is Coming
The pandemic brought a significant shift in the consumers’ buying preferences. Online shopping accelerated so much that the delivery company FedEx posted its highest quarterly revenue ever. Shipping increased by 31%, and the company’s profit surged by 60%.
As the holiday season is approaching, online sales are expected to grow further. As per a survey of 1000 consumers, creators, and brands by AspireIQ, 82% of the people will shop online for the holidays. 44% would prefer to shop in-store, whereas 20% would choose curbside pickups for their holiday shopping (participants were allowed to select more than one option.)
This is a sign that digital ad spend is going to see a great spike during the holiday season.
Apple’s New Anti tracking changes
Apple’s iOS 14 has a new feature that can affect publishers. With the new update, not only Safari, but all browsers will block cross-site tracking by default. The same changes will also take place in the iPad OS. With the upcoming update of the Mac OS, tracking will become difficult on Mac’s as well.
Currently, 55.2% of Mac users are on Chrome, the ad rates can fall for these users after the Big Sur update. However, in the case of iPhones, 93.1% of users are on Safari. CPM rates already fell by 60% for such Safari users when Apple brought ITP changes in 2017.
Ad Spend Forecast from Magna
As per Magna Intelligence, a market research company, ad revenue in the US market decreased by 7.2% in the H1. But at the same time, ad sales grew by 5.7%. The ad budgets will post a 4% gain in 2021, which will result in the market recovery.
Additionally, there has always been a positive correlation between the ad spend and the GDP of a country. The GDP will grow by 3.2% too.
The increasing ad budgets will ultimately help the publishers. The growing interest in online shopping signals that a significant portion of the increased budgets will go to digital channels. So online publishers should prepare for a speedy recovery, but if a large chunk of your audience comes from Apple devices, expect the revenue to be lower from the same traffic.
Publishing After the Pandemic
How Buzzfeed came back on track after the Pandemic
BuzzFeed is seeing the demand coming back after the pandemic. During the pandemic, the publisher saw a difficult time, and now, its SVP of Ad Strategy and Partnerships has shared the experiences with Adexchanger.
BuzzFeed didn’t just ask its advertisers to buy ads on the platform, instead, it told them the current behavior of the user and offered to craft the ads accordingly. When content and ads are woven together, marketers get better results.
“We had more inventory and demand, but at the same time, advertisers were cutting budgets and trying to figure out what they should do. Coming to them and saying, “Hey, our traffic is up – want to buy some ads?” was not the right strategy.”
– Ken Blom, SVP, Ad Strategy and Partnerships, BuzzFeed
The sales team started focusing on the clients that can be willing to buy ads in the present scenario. In this way, the sales team was able to find new clients as well as approach old clients with lesser guesswork.
BuzzFeed showed the importance of every group of audience to its advertisers. While doing so, it is able to convince its advertisers to not block ads for users who are reading content related to topics like BLM and coronavirus. The publisher is helping the advertisers by telling them how they can cater to such audience groups instead of blocking them.
Post-pandemic business for news publishers: Key Points
Rasmus Kleis Nielsen, Director at the Reuters Institute for the Study of Journalism at Oxford University discussed the post-pandemic business model for news in the FIPP’s World Media Congress 2020. Here’s what publishers should know:
- Traffic is not revenue. Your traffic is a means to generate revenue. It can be converted to revenue with ads, subscriptions, etc. Publishers should be aware that it’ll be difficult to convert the traffic to revenue during a recession.
- In the future, ads will be a much smaller part of the revenue mix for publishers.
- After the pandemic started, the number of people who are ready to pay for the news has increased exponentially. Although it’s a positive change for the news industry, big publishers like the NYT will benefit the most from it, whereas small-sized publishers may struggle with it.
Publishing won’t be the same after the pandemic. We have understood that publishers should not over-rely on ads. The pandemic also brought our focus on under-utilized sources of revenue (such as subscriptions, podcasts, etc). At the same time, we understood the importance of diversified revenue.
Ads will be a smaller part of the revenue, but they’ll still be a significant part. Publishers should learn from BuzzFeed about how they should approach ad revenue during and after the pandemic.
How Publishers are Earning from Product Licensing?
We barely mention product licensing while talking about revenue diversification for publishers.
But many publishers are making millions of dollars from this stream. Publishers are partnering with retailers and manufacturers to create products and merchandise that represent their brand. Meredith, Hearst, BuzzFeed, and Condé Nast are just a few of such publishers. Meredith alone made $26.5 billion from its branded products.
Meredith’s branded products include kitchenware from Allrecipes and home furniture branded as Coastal Living. It has even partnered with a real estate company that is selling “Better Homes and Gardens” real estate.
BuzzFeed is licensing its Tasty brand for selling cookware at Walmart. Soon, it’ll be licensing its Nifty and BringMe brand to bring new products in the market. In 2019, BuzzFeed’s licensing business generated $260 million.
Hearst Magazines is licensing its brand to be used on mattresses. The mattresses will have four different Hearst titles on the label. The publisher will share the revenue with the company that is producing the mattresses. In 2019, Hearst made $580 million from its licensed goods.
Licencing can be a reliable revenue stream for publishers, but it is important to have a brand before you can license it. Read our Becoming Series to learn how some publishers built the biggest brands in the publishing industry.
The Economist’s Subscription Strategy
During the pandemic, we saw many publishers skyrocketing their number of subscribers. Increased traffic due to the lockdown was the major factor behind the success. But, the subscription strategy of the Economist shows us another way of gaining subscribers.
The Economist focuses on LinkedIn for subscribers. The number of subscribers from LinkedIn has tripled YoY for the publisher, at the same time, the traffic from the same source has doubled. The publisher currently has 11.5 million followers on the platform.
Every day the publisher puts out 9 stories on the platform. The stories are published at similar times so that the readers become habitual of receiving them. EU focussed stories are published according to the local time. The content has a mix of videos, graphics, article links, etc.
By following a simple approach, the Economist is attaining consistent growth. LinkedIn is allowing the publisher to grow organically, this is something that we rarely see on Facebook’s platform. If a platform is allowing you to grow organically, then there’s no harm in putting your efforts on it. But publishers should also avoid being over-reliant on such platforms because a simple change by the platform can completely shatter their traffic source.
Moments that Matter
- Open letter asks tech firms to stop targeting ads at users under 18 – Neowin
- Digital publishers unite with fears ACCC code may ‘disadvantage the rich variety of new media voices’ – Mumbrella
- FTC Preparing Possible Antitrust Suit Against Facebook – WSJ
- IAB Tech Lab’s Project Rearc Chugs Along On Open Standards, But The Browser Makers Are Wildcards – Adexchanger
- Google Says It Doesn’t Monopolize Digital Ad Market. Senators Don’t Buy It – NPR