Despite Q1’s slow start, publishers are bullish about events revenue for 2023
With publishers reporting that Q1 advertising revenue is tracking 10% to 25% down from forecasts and with RPMs (revenue earned per 1,000 pageviews) from open marketplace programmatic ads down even further — between 20% and 55% year over year — finding silver linings is more important than ever. And based on four publishers’ experiences so far this quarter, it looks like events might be that small saving grace.
Earlier this year, several publishers said they were pushing back the timelines for their tentpole events to the second half of the year, in order to give advertisers more time to secure the budgets necessary for higher-cost event partnerships. This strategy, combined with advertisers’ quest to get the most bang for their buck, seems to have paid off.
Publishers are finding that not only are advertisers willing to sign campaign deals this quarter, but they’re also willing to commit to events as far as nine months out. With these promising indicators, some publishers are anticipating doubling their event revenue this year.
“Experiential [is] something that we’re still really committed to being a big platform for ’23, despite the potential economic challenges for brands,” said a digital publishing executive, who spoke on the condition of anonymity. And early indicators show that brands are willing to spend on event partnerships if they can achieve the ever-desirable, full-funnel reach.
Publishers’ event strategies have been ramping up over time. In the summer, a Digiday+ Research survey found that 78% of publishers said they planned to focus at least a small amount on building their events business in the next six months, with 40% saying building up their events would be a large focus.
But not all publishers agree that experiential will be the saving grace for 2023, especially because quick-turn campaigns are still being prioritized by clients and many publishers don’t have a permanent event space at their disposal.
Another publisher who spoke on the condition of anonymity said they will be prioritizing “a lot more private marketplace and programmatic guaranteed deals.”
“I don’t think you’ll see from anyone in this space, some ginormous, meaty, experiential [campaigns] that would be too top-of-the-funnel [focused], given the uncertainty [of the economy this year],” the publisher added.
Guaranteeing more results
A significant appeal of events is they can offer a more holistic set of data post-campaign that advertisers are not always able to get from digital campaigns or social media branded content, according to the publisher. For example, being directly in front of audiences can guarantee people interact with the brand, and social amplification around events can provide more impressions even beyond the people in attendance. In some cases, adding commerce components can also provide a full-funnel effect, from brand awareness to point of purchase.
“From a client’s perspective, they want to spend their money where their money is gonna work the hardest and they’re going to get the most return from every dollar spent,” said Jon Lefferts, evp of integrated investment at UM.
Apartment Therapy was one publisher that pushed back the timeframe for its tentpole event Small/Cool to the fall of 2023 after it took place in spring during the year prior. About nine to 10 months out from the event, the company signed two sponsors that together represent a quarter of the anticipated revenue for Small/Cool, according to Apartment Therapy president Riva Syrop.
Overall, interest in events (both standalone custom events and sponsorships on editorial events) has “significantly increased” year over year, Syrop added. She declined to share exact growth figures, but said that this increase in interest from advertisers is largely attributed to brands wanting to be a part of “proven franchises” that will deliver on the objectives, or key performance indicators, they need to justify their marketing budgets in 2023.
“They want a proven franchise or format that they’re confident will perform against their KPIs in terms of consumer turnout, press coverage and online reach,” Syrop wrote in an email to Digiday. She did not say whether AT is offering any guarantees on specific KPIs.
Another experiential format that’s picking up interest from Apartment Therapy’s clients is in-store activations, including creating curated displays in retail spaces that have the AT stamp of approval, Syrop said. These activations are very centered around commerce, which has been a desirable way for events to achieve the bottom-of-funnel quality that’s largely desired by advertisers during an economic downturn.
For BDG, which has had a “surprisingly difficult” start to 2023, per an internal email from CEO Bryan Goldberg (the company has laid off 8% of its total staff and shuttered Gawker 2.0), its events business is on an upward trajectory, counter to the industry trends reported around advertising revenue.
So far, BDG’s Nylon House and ZOEasis event franchises have sold five sponsorships for their Coachella iterations this year, according to BDG president and CRO Jason Wagenheim, who declined to share hard revenue figures. This is halfway to the number of sponsors attached to the company’s Coachella events in 2022, said a spokesperson.
The Nylon House franchise will also launch at Formula One in Miami in May and is already attracting sponsor interest, though Wagenheim wouldn’t say whether sponsorships have already been sold against that event, and the house will return to Art Basel again after a profitable run in 2022. More events from that franchise will be built if they’re sold to advertisers, he added.
Last year, BDG invested heavily in revamping its events business. That revenue stream doubled in 2022 over 2021, growing to represent “nearly” $10 million in revenue, Wagenheim said.
“The model is working for us. I’m expecting this to be another year where we double the experiential business,” said Wagenheim.
Making events cheaper and more turnkey
Another reason publishers are bullish on events this year is that some, including Forbes, have gone to great lengths to decrease the overhead costs that typically fall back on sponsors to foot the bill, like investing in permanent or semi-permanent event spaces.
The first publisher who spoke to Digiday for this story said that their event space enables their team to avoid signing new rental agreements for each event and building up a new space each time. They declined to share how much upfront cost savings amount to as a result of the strategy.
“One-off custom events are really cost prohibitive for brands and then also very production-heavy because you’re constantly rebuilding a space. [We have] an always-on, programmable space, that allows us to not have to pass a massive investment off to a brand,” the first publisher said.
Forbes’ permanent events space is called Forbes on Fifth and is located in Manhattan. And Sherry Phillips, CRO of Forbes, said having the space available for both tentpole editorial events and custom events for sponsors has made experiential campaigns much faster to execute — though she declined to share exact timelines. This is something many advertisers and media buyers look for when advertising budgets get approved last minute and in-quarter ad buys are still top of mind. Phillips did not share how much the space costs to lease or own.
“[Clients] don’t want to put down dollars that [they] can’t recoup. You don’t know what’s going to happen in two months, and you’re [being asked to] put money down for six months in advance. I think publishers, networks, whoever it might be, need to be more flexible and need to condense their timelines” when it comes to these large media buys, Lefferts said.
Wagenheim added that event execution is getting faster in general, as brands seek shorter turnaround times and in-quarter executions.
“Ideally, it’s about four to five months out that we’re able to lock them up, but realistically speaking, it’s typically more in that two to three months range,” said Wagenheim.
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