Down 30% in ad revenue, G/O Media weathers the storm with a new CRO
G/O Media — parent company of brands including Deadspin, Jezebel and Gizmodo — expects a 30% decrease in its total advertising revenue during the second quarter. Like other publishers, G/O has made cutbacks, laying off 14 staffers (about 3% of staff) in April.
The crisis hit at an inopportune time for G/O, fresh off a mass defection of staff at Deadspin last November that led to G/O’s editorial union asking for CEO Jim Spanfeller’s ouster in a letter sent to G/O’s private equity owners in January.
Now, G/O is projecting an image of stability, with Deadspin under a new editor-in-chief Eric Barrow and editorial director Jim Rich. It has a full-time staff of 10 in addition to some freelancers — down from the more than 20 staffers it had back in October.
Spanfeller has also brought in a new chief revenue officer, former Bleacher Report svp of ad sales Brian Kelly.
Traffic to Deadspin has steadily been increasing since February when it had 717,000 unique visitors, to more than 1.9 million unique visitors in April, according to Comscore. However, year over year, traffic is down almost 85%, with Comscore reporting that the site had 13.8 million unique visitors in April 2019.
“We relaunched Deadspin for appropriate reasons and had already started hiring the staff, but it basically restarted right when sports stopped,” said Spanfeller.
The company’s other brands have seen a general decline in traffic from last year to this year, with its largest property Gizmodo having about a 58% drop in unique visitors from approximately 28 million April 2019 to 11.6 million in April 2020, according to Comscore. During that same period, Comscore also reported that Jezebel dropped from 8.9 million unique visitors to 4.2 million (a 52% decrease) and Lifehacker went from 12.5 million unique visitors to 9.5 million (a 24% decrease).
Spanfeller said he sees a comeback in the making as activity slows picks up as the U.S. economy begins the process of reopening.
“One of the reasons that we pulled the trigger on bringing Brian on board is we’re seeing light on the horizon,” said Spanfeller, adding that RFPs and conversations with clients have been gradually increasing back to what they were before the pandemic.
Kelly said that he is joining the team with a level of optimism for selling the brands, regardless of advertising being down. This is because 50% of G/O Media’s total traffic is direct, which he said proves a true affinity for the brands.
Spanfeller added that this direct audience has also enabled the company over the past three to six months to start preparing for the end of the third party cookie by building profiles of first party users. But it has also allowed his team to implement a series of popup surveys across the company’s sites over the past few weeks to learn what audiences want from advertisers in this moment.
From that, Spanfeller said they received thousands of responses, which they’ve shared back with advertisers to help inform potential campaigns.
“I can’t guarantee that we’re going to see brightening spots in June and then an explosion into Q3. I can hope that, but there is still a lot to be determined. Emblematic of that are the events of the past week or so,” said Spanfeller.
Similar to how he said his team saw brands stop spending on advertising during the outbreak of coronavirus, many brands that were just finding their footing are now facing the instinct again to go quiet to see how the situation unfolds.
To help offset some of the advertising declines, Spanfeller said that its ecommerce business, which usually brings in half of the revenue that advertising brings in, has been holding steady throughout the pandemic, helping the company “weather the storm.”
As for future growth, Spanfeller said that immediately the goal is to get “our house in order as it relates to the pandemic and revenue streams,” but beyond that, he is very focused on potential mergers and acquisitions, not just in the verticals the company is already in, but potentially expanding into new spaces. “We’re definitely keeping an eye on the marketplace to see what’s out there,” he said.
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