Media Briefing: How the pandemic did — and didn’t — change the media industry
The Media Briefing this week looks at what the lasting impact of the pandemic this past year has been on the media industry (spoiler: it may be smaller than you expect).
- The year media business changed — then didn’t
- The pandemic’s impact on the local news business
- 3 questions with gal-dem’s Mariel Richards
- The Wall Street Journal’s SEO strategy, Teen Vogue’s outcry over its new editor and more
The year the media business changed — then didn’t
Since March 11, 2020, the media industry experienced all sorts of changes. Media companies left their offices as stay-at-home orders went out. They laid off employees as advertising revenue dried up. They pivoted to virtual events and remote video production as much of the industry began working from home. But a year to the day since the coronavirus crisis was declared a pandemic, the media business has not been permanently transformed all that much — at least not yet. And it isn’t likely to as a direct result of the pandemic, according to media executives.
“In the end, I don’t know that much changed. I think for us, and probably a lot of others, we did a gut check on costs, trimmed away unnecessary costs and got in better fighting shape,” said one media executive.
The key hits:
- Media companies’ advertising revenues rebounded by the end of the year.
- The pandemic’s impact on companies’ event and subscription businesses may not last, for better or worse.
- Media businesses have been more greatly impacted in the past year by issues like the outcry over racial inequality and tracking crackdowns from Google and Apple than by the pandemic.
Last spring, media companies’ advertising businesses seemed primed to undergo the biggest permanent transformation. But while ad revenue dropped off a cliff in the second quarter, it rebounded by the end of the year. So much so that multiple media executives said their companies’ fourth-quarter ad revenue in 2020 ended up being higher than in 2019.
“We all thought in March, April, May and June that advertising was shot for the media industry, but it came back strongly in the fourth quarter and is just fine now,” said a second media executive.
To be clear, not all areas of media companies’ businesses have recovered or even stabilized.
Events, for example, remain virtual, but the media executives interviewed for this article expect that, within three years, media companies’ events businesses will not look fundamentally different from what they were pre-pandemic. Furthermore, they expect virtual events will become a relic as in-person events return and people acclimate to the post-covid world. “I don’t know that [virtual events are] here to stay because they’re terrible. Everyone has Zoom fatigue,” said a third media executive.
Additionally, the subscription bump news publishers saw during the pandemic is likely to subside as the news cycle (hopefully) settles down compared to last year. “The subscription bump was more of a demand for news when crazy shit happens. It was a year of crazy shit happening non-stop, so the demand for news and people’s willingness to pay for it will decline,” said the second media executive. “That bump will be reduced.”
More to the point, the pandemic did not really disrupt the revenue mixes for media companies that had diversified beyond advertising into other money-making sources like subscriptions, events and commerce. A rise in subscription revenue helped to offset some of the ad revenue declines that media companies suffered in the first half of 2020, and virtual events lessened some of the sting from losing in-person events. But by the end of the year, media companies’ revenue mixes were largely restored to pre-pandemic form, with advertising as the biggest single source. “In October, I would have said there would be a real material change in the makeup, but then the end of the year was really strong from an ad perspective, which actually restored the previous balance,” said a fourth media executive.
None of that is to say that the pandemic has not made a lasting imprint on media businesses. The shift to remote work, as well as the cost-cutting many media companies underwent to weather the economic downturn, are likely to have some lasting impacts, as will the fluidity of the advertising market. But media executives are still ascertaining how long exactly those impacts may last, for which companies — and to what ends.
Companies are still determining to what extent they will continue to work remotely once it is safe to return to the office at normal capacity. They are also sorting out the permanence of the expenses that evaporated in 2020. Whether companies return to offices will inform whether their real estate and electricity costs return, but business travel is another line item to which companies may take a red pen, not only because it lowers costs but also streamlines employees’ work hours. “There are so many things we do that take an astronomical amount of time, like traveling to the West Coast for a meeting. So much can be done via Zoom,” said the first media executive. And finally, they are getting their arms around whether the shortened pitch cycles for advertising deals as well as advertisers’ focus on tried-and-true ad formats, i.e. units that can be delivered via an ad server versus custom-built branded content, will continue to trend as advertisers in the travel and theatrical sectors return to market — and the third-party cookie ultimately goes away.
Media executives said of all the events in the last year, those not related to the pandemic will have more of a longstanding impact on the industry. Google’s and Apple’s digital tracking crackdowns threaten the status quo of digital advertising and have pushed publishers to collect first-party data from their audiences to strengthen their ad businesses and reinforce their non-advertising revenue streams. Former President Donald Trump’s ouster from office removes a lightning rod that had powered news publishers’ site traffic, video viewership and subscription businesses for four years. And the outcry over racial inequality calls for media companies to finally take significant steps to address the lack of diversity within their organizations, especially among their leadership ranks, or risk losing their BIPOC employees — as well as their BIPOC audiences and the advertisers who want to reach them — to companies in which diversity is supported.
“A lot of the changes were things like Google and Apple [announcing moves that will limit tracking for targeted advertising]. Those are the big changes. Those are going to happen one way or another, but they have nothing to do with Covid-19,” said a fifth media executive. — Tim Peterson
“When I first read about [Google announcing it will not support alternate identifiers for tracking people online], it sounded like a cannonball. But when I read into it, it’s basically them saying they’re not going to bring a solution to third-party cookies [going away. They’re not going to service the open web, but they will service the Google ecosystem. Google is sacrificing some business, but focusing on where their core business is… When Google does anything, it’s in their best interest.”— Publishing executive
The pandemic’s impact on the local news business
While the pandemic rocked the entire media industry, perhaps no segment was hit harder than the already-struggling local news ecosystem. Several recently released reports and initiatives highlight the exact impact on the local news industry, how diverse communities were disproportionately affected and what can be done to help.
A report released March 3 — by Knight Foundation, Google News Initiative, Democracy Fund and Impact Architects — argued measuring the “health” of a news environment should include an assessment of the diversity of business models and how newsrooms’ staffs reflect the communities they cover. The report found that in the nine communities evaluated, those with more racial and ethnic diversity have lower levels of trust in journalism as well as fewer journalism outlets and national newspaper chains.
But it’s not all bad news. Report for America reported in February that increased attention on racial inequality in the U.S., the unfortunate economic impact of the pandemic and a call among Black communities for more news by and for African Americans, resulted in funders increasing support for Black journalism. Black Voice News’s income has doubled in the past year, for example, in large part because the publication started accepting grants to bolster its ad-supported business. (The Knight Foundation report also found inequity in philanthropic investment in journalism across the nine communities included in the project, ranging from over $50 per capita in Macon-Bibb County, Georgia to less than $1 per capita in Youngstown, Ohio.)
The Tow Center for Digital Journalism and the Columbia Journalism Review hit the one-year mark of tracking newsroom cutbacks in the wake of the pandemic. One of the key takeaways is that media companies suffered from declines in ad revenue and significant layoffs across the board, though newspapers were hit the hardest. More than 60 outlets have shut down, including 56 newspapers, five magazines, three digital outlets and one radio station.
Meanwhile, ad agency Allen & Gerritsen partnered with Boston Globe Media to launch the Protect Our Press initiative in February, a call-to-action to agencies, brands, publishers and consumers to curb the decline of local news. The initiative asks agencies and advertisers to reinvest 20% of their programmatic ad budgets directly with local news outlets, remove local publishers from keyword blocklists and commit to maintaining existing investments in local journalism. — Sara Guaglione
Numbers to know
22%: Percentage of top editors who are women across 240 news outlets.
70: Number of HuffPost employees who were laid off on March 9 by BuzzFeed, which also shut down HuffPost’s Canadian outlets.
28%: Percentage decline in traffic to publishers’ political news content in February compared to January.
436,000: Number of digital-only subscribers that Tribune Publishing had at the end of 2020.
$3 million: Amount of subscription revenue that Quartz expects to bring in this year.
3 Questions with gal-dem’s Mariel Richards
Digiday spoke with Mariel Richards, CEO of U.K.-based magazine gal-dem, for a story earlier this week about the emergence of agency-run multicultural private marketplaces and why some Black-owned media companies are hesitant to take part in them. Below is more from that conversation, with a specific focus on how independent media companies in the U.K. are banding together to help increase ad spend on their own terms. — Kayleigh Barber
Why do you think that going through agencies limits how brands reach marginalized audiences?
The agency model doesn’t work when it comes to this idea of authentically telling a story to intersectional identities. And I know we’re talking about advertising here — we’re not talking about writing a novel — but the more direct the relationship with the audience you’re trying to reach, the more authentic the story is.
When we look at some of the things that I think affect people’s perceptions of brands and their importance or their necessity in their lives, it is not the display ad that they see on the screen. It’s not even the 60-second TV commercial. The way that Nike has worked to sponsor basketball and football courts around London [and] Adidas sponsoring learning opportunities online, it’s these things that feel specific and direct into a community that I think tell a story of a brand’s intentions. And those things are harder and harder to do the more removed you become from that community.
As a niche publisher, do you worry about the issue of scale that advertisers traditionally look for in media buys?
That’s one thing that clients are kind of scared of. They want to work with you because you’re the niche publisher and you speak to that demographic, but then there’s another one and another one. But the reason that we’re present is because we admit that there is a plurality of voices, and there is a plurality of experiences. We all speak to our communities in different ways from different perspectives. [When] agencies come in and try to sell us as one group, it really tells the story that they don’t understand that plurality, and that we are being sold to diversify something rather than to speak to a specific interest or a specific behavior pattern.
How have you attempted to solve this problem on your own?
One thing that we’re doing more of to try and step away from this network approach is to prove that we’re capable of collaborating with other media [brands] when it’s appropriate. So if a brief comes in and it’s speaking to Muslim women, we’ve got absolutely no qualms about saying, ‘Actually, we need to split this budget, or we need to hand over the majority of this budget, we need to collaborate with Amaliah to reach this target audience.’
We work with other magazines [regularly]. We’re all trying to change the media industry in the same way, so there is less competition between us as startup magazines than there would be between some of the larger houses who wouldn’t necessarily want to share a budget or to share work.
What we’ve covered
Digiday’s updated breakdown of 12 publishers’ diversity statistics:
- Publishers’ employee bases continue to be largely white, according to Digiday’s roundup of self-reported diversity data from 12 publishers. Nearly all of the companies included have majority white staff, leadership and new hires.
- There were no Bleacher Report employees at the vp level or above who were Black, a larger portion of promotions went to white people at Buzzfeed than the share of white people at the company overall, and there nearly 80% of people in management level at Hearst are white.
Read more details on diversity (or lack thereof) at publishers including Gannett, New York Times and Vox here.
The Washington Post readies its self-serve buying platform:
- In the beginning of the second quarter, Zeus Prime, a self-service ad platform, will be opened up so ad buyers can reach users across all of the sites using Zeus Performance, the header bidding wrapper plus ad rendering engine from the Post.
- Zeus Prime is entering an increasingly crowded field, with publishers ranging from Vox Media to Forbes to BuzzFeed standing up solutions built on first-party data.
Read more about Zeus Prime here.
Why independent Black-owned media companies are not participating in agency multicultural marketplaces:
- GroupM, Havas Media and H Code all launched new multicultural private marketplaces or networks in the past year so brand clients could more efficiently buy ads in Black-owned media.
- Without programmatic offerings, independently owned publishers struggle to garner interest from buyers, while publishers lament a lack of autonomy over which advertisers appear on their sites.
Read more about the challenges for multicultural marketplaces here.
Google’s ad targeting limits expose publishers with reliance on open programmatic market and first-party data weakness:
- Publishers expect a revenue hit following Google’s changes that will end behavioral targeting in its ad exchange, which drives a significant portion of revenue for some.
- Publishers without first-party data strategies say they are particularly worried about generating ad revenue as advertisers seek authenticated audiences, but while some are testing alternate identifiers, others await advertiser interest in that approach.
Read more about how publishers are planning to counteract the impacts of Google’s latest targeting decision here.
How The Week successfully created a children’s media property amid the pandemic:
- Right before its expected launch, The Week had to tear up its plans for a kids-aimed look at the news when the pandemic hit in order to incorporate coronavirus information for its young audience.
- A survey conducted by YouGov and The Week Junior helped inform how it brought the news to Generation Alpha, a generation who believe in their ability to change the world and consider access to health care a particularly important issue.
Read more about how The Week Junior was born here.
Identity tech providers try to make sense of Google’s plan not to support alternate identifiers:
- Identity tech firms put on a happy face as Google told the world it would not enable its technologies in inventory it sells. But LiveRamp hoped it could partner with Google’s ad exchange to pass its identifier to non-Google DSPs.
- While some identity tech execs dismissed the news, others suggested Google would have influence on whether advertisers and publishers want to invest in alternate identifiers.
Read more about how Google’s decision could affect cookie-replacing identifiers here.
Bloomberg Media is testing paid tiers for virtual events:
- To drive growth, Bloomberg Media is experimenting with a “freemium” events model which includes free and paid offerings for access to additional features at its events which bring attendees closer to its journalists and stories.
- There’s a $125 three-month “New & Networking” subscription tier and a $475 “Premium Pass” for a full-year subscription.
Read more about Bloomberg’s new event model here.
PopSugar Fitness expands health and wellness coverage after success with at-home workout videos:
- PopSugar needs to keep audience momentum going as people return to on-location gyms after turning to its workout videos during lockdown.
- The publisher will launch an online hub to highlight its coverage for Mental Health Awareness Month in May and plans to produce more articles and videos around sleep, stress and anxiety management and meditation.
Read more about how PopSugar is flexing its fitness content muscles here.
What we’re reading
The Wall Street Journal’s SEO strategy:
The Wall Street Journal has known for years that it is too focused on its older print subscriber base. Its solution, improbably, includes a bigger shift toward “What time is the Super Bowl”-esque service content, reported Insider.
Substack’s local news potential:
Substack has already proven it can support small local news operations. Now, with many journalists either laid off or worn out by years of cost-cutting in local news, the newsletter publishing platform is turning its eye toward local news as a growth area, Poynter reported.
Billionaires’ news publishing bailouts:
The benevolence of several billionaire media company owners has been tested during the pandemic, CNN’s Kerry Flynn writes. Even though publishers including Fortune and the Los Angeles Times are just a few years removed from ownership’s assurances of support, they now face a squeeze familiar to the rest of the media.
Teen Vogue’s outcry over its new editor:
Two years ago, Alexi McCammond, the former Axios White House reporter and just-announced editor-in-chief of Teen Vogue, apologized publicly for a clutch of racist tweets she published while she was in college. This week, 20 Teen Vogue staffers publicly repudiated McCammond (and Condé Nast management for hiring her) over those same tweets, according to The Daily Beast.
Facebook’s TikTok copycat:
Facebook is trying to learn whether Reels, its TikTok-esque videos created originally for Instagram, can get traction inside Facebook’s news feed, Reuters reported. The test, which is being conducted in India, is the latest move Facebook has made to try and breathe life into its version of the widely copied short-form video format.
Oprah Winfrey’s continued TV draw:
As streaming giants race to lock up exclusive deals with A-list talent, it can create collaboration headaches. Case in point: Oprah Winfrey’s news-making interview with Meghan Markle and Prince Harry had to air on broadcast television partly because Oprah has an exclusive deal to create content for Apple TV+, while the ex-royal couple has a $100 million deal with Netflix, according to The New York Times.
For many influencers, speaking out on Roe v. Wade is an obvious choice
Influencers are concerned about losing potential brand deals because they don’t want to work with those that don’t share their values on choice.
Gannett reviews employee blowback to social media policy memo after Roe overturn
After receiving criticism for forbidding its journalists from posting opinions on the Supreme Court striking down Roe last week, Gannett is reviewing employee perspectives.
Companies turn to employee resource groups to manage internal discourse around the abortion ruling
Companies are using ERGs to facilitate employee conversations, as well as executive leadership via companywide emails to employees stressing their support for wellbeing and the availability of managers for support.
SponsoredWhy the caliber of content is paramount for advertisers
Agata Brodniewska, brand safety manager, Dailymotion Content is king when attracting consumers but is equally essential when courting advertisers. While both stakeholders want many of the same things, they most notably want relevant content they can count on to deliver an accurate and honest message without confusion or misinformation. This is especially important for advertisers […]
Member ExclusiveMedia Briefing: The pros and cons of three commerce pricing models
In this week’s Media Briefing, media editor Kayleigh Barber breaks down the different pricing models that commerce publishers use.
Bloomberg Green’s expansion increases its service-oriented coverage
Bloomberg's climate vertical is adding new products and coverage areas to lean into solutions-oriented journalism.