Media Briefing: Publisher execs fear lack of visibility for Q3, but feel steady year over year

This Media Briefing covers the latest in media trends for Digiday+ members and is distributed over email every Thursday at 10 a.m. ET. More from the series →

This week’s Media Briefing highlights the thoughts, feelings and concerns shared by publisher CROs and media execs as the second quarter comes to a close.

  • The CRO says
  • Podcasters rely on bonus content to grow paid subscriptions
  • Chris Licht is out at CNN, the summer of media strikes carries on and more

The CRO says

As the second quarter comes to a close, publishers are still surveying just how poorly the first half of the year performed and whether or not those trends will carry into the back half of the year. 

According to one media exec: “Things pretty much suck.” But thankfully, that’s not the shared sentiment among the five media revenue leads who spoke with Digiday for this story.

In fact, despite there being lower visibility for Q3 than what publishers forecasted earlier this year, two said that revenue was flat year over year in the second quarter and another exec said that RFP volume, value and win rate are all up for the back half of 2023. 

Below are top takeaway quotes from the virtual desk-side interviews I had with publishers this week about the state of their media businesses:  

Q2 in review: 

“It’s been a little slower to pick up this year than we anticipated at the end of last year,” Riva Syrop, president of Apartment Therapy Media. 

“Our second quarter doubled what we were able to achieve in our first quarter,” said Rachel Oppenheim, CRO of Semafor.

“Without disclosing revenue detail, we’ve cleared eight-figures from a revenue achievement perspective so far, which we’re incredibly proud of and see a lot of upward momentum,” said Oppenheim. 

“Where we landed for Q2 is basically like neck and neck with where we were at last year at this time. My hope had been for us to go above that, to be honest with you. I thought that things were going to sort of loosen up sooner than they did. However, we’re not unhappy with where we’re landing,” said Syrop. 

“We’re doing well. Obviously you see softness in areas – you’re not allergic to it by any means. But you also see some parts of the business are doing more [deals] than ever,” said a third exec who spoke on the condition of anonymity.  

“We feel pretty stable. Is it going to be like COVID [times] when things were flying high? No, it will be a little bit different than that. But we’re actually having very good conversations with our advertisers,” said the third exec.  

“What’s been really interesting in Q2 is that clients just seem to be buying much differently than they did in the past. And we’re seeing [that] on the direct sales side specifically. Data is literally somehow at the center of all of it. We’ve been using a ton of data gathering to drive the creative for the campaign,” said Syrop.

“The other big thing that I think is very different is the campaigns we were seeing in Q4, Q1 were very much serious bottom of the funnel, because everybody was trying to find every dollar that they could as quickly as they could. Where more of our brands are landing right now is in this purchase consideration set. They’re not necessarily scraping at the bottom, but they also don’t want to do something that’s simply [just putting their] brand out there,” said Syrop.

“[Programmatic] campaigns [are] renewing definitely. It’s been very easy – not that you’re on autopilot whatsoever. The conversations we’re having with clients are very real, in the sense that they’re like, this is where we’re frustrated, this is what we can spend our money on. This is what we can’t. And that’s kind of nice because that doesn’t always happen. So I feel like the realist in us is pretty strong, which is good,” said the third exec.  

“Q2 last year was a huge experiential quarter for us. Thankfully, we made a good call pushing back [our tentpole event] Small/Cool [to the fall this year]. We did not see an appetite for experiential in Q2 – not for individual pop-up things, not [for tentpole events]. We definitely did not find that that’s what our clients were looking for,” said Syrop.

Midsize deals aren’t coming in. “What we hear is definitely budget cuts and they’re pursuing lower funnel solutions like retail media [networks,” said a second digital media exec who spoke on the condition of anonymity. 

“Zero to $150k is definitely still going strong for direct [sales] and then it’s really haphazard. We’re actually doing the best in terms of conversion rate between $400k and $500k because we think it packs the most value for the least amount of substantial budget. But below that [it’s] crappy [and] few and far in between,” said the second exec. 

“Unique franchises that we have that excite brands, these are unique moments for us where we have a strong voice. So we’re holding our own there [and] those moments could pull in dollars.  But like daily, evergreen, utility-driven,like back to school sponsorship-type RFPs – it is a dogfight. Like if it’s us versus 40 other publishers, it’s going to be tough,” said the second media exec. 

Still selling big deals: 

“We’ve had a ton of clients who ran with us in the first half already rebook for the second half. I think we’ve had about a half a dozen big partners already locked in for their back half campaigns. They’re really gravitating more towards proven, trusted, easy to work with [partners]. They just want to do what they know is going to do really well for the brand and prove out,” said Syrop.

“Our RFP volume in Q2 for the back half – some of them starting at the end of Q2 – is double where it was last year at this time, and the value of the RFPs is up 50% year over year. Our win rate, year to date, is up 20% year over year in terms of deals that we know for sure if they’re going or not going,” said Syrop.

“There is money if you can convince clients like, ‘Walmart’s great, but you’re already fishing where the fish are. We can help you drive all the way down.’ Those are the seven-figure deals that were closing,” said the second media exec. 

“Last month we closed three seven-figure deals. If it was a frothy marketplace, we’d want to do 10 of those. Some of them are $3 million, some of them are $1 million, but no single deal is crossing $5 million-plus in this market.” said the second exec. 

“Nothing’s easy to sell. It’s an ultra competitive space and we want to compete on the merits of the quality of the convenings and the quality of the audience,” said Oppenheim. 

“We’re going in and listening. I think in an environment like this, that is the posture that any revenue executive or sales team has to take. It’s actually not really relevant what’s on your docket to sell it. What’s relevant is what is on your client’s docket to solve,” said Oppenheim. 

Just this week … 

“We actually just got another seven-figure deal in yesterday. That said, it’s not how you win, writ large. How you win is [through] the daily deal flow of $250k deals, the $350k deals, the midsize deals, and those have definitely gotten fewer and farther in between,” said the second media exec. 

Visibility is still hazy for most, but not as bad as this time last year: 

“Clients are waiting closer to the quarter to release budgets, so we don’t yet have great visibility into Q3. However, we have seen an uptick in programmatic [guaranteed] buying which we expect will continue,” said the first exec. 

“I really don’t think that there’s a full recovery until [2024],” said the second media exec. 

“We do have, I’d say, fairly good visibility into Q3 and Q4, but that’s by way of the long term launch partnerships and relationships that we established before we debuted last October,” said Oppenheim.

“There’s more visibility now than there was in the first half. Coming out of January, people just really didn’t know what’s what,” said the third exec. 

“We were experiencing a very different trajectory for direct sales this year than we did last year. We’ve already booked in for Q4 twice as much as we had last year at this time,” said Syrop. 

“A lot more [clients] aren’t holding on as tightly [to ad budgets]. They seem to be releasing the funds with a little bit more confidence,” said Syrop. 

“Retail is significantly kneecapped right now. You see it even just in the sales. Every day it’s like a calamity. It was Adidas and Kanye and then it was Target and Pride Month, and no one can catch a break. There was a glimmer with the finance category starting to come back and then SVB collapsed. That’s been the narrative throughout this year and that will kill an entire category,” said the second publisher. 

Podcasters rely on bonus content to grow paid subscriptions

As podcasters look to grow their subscription businesses they are finding that bonus content is a better motivator than ad-free listening in converting listeners into paid subscribers. 

“For us, we’ve seen ad-free listening as table stakes and then looked across our offering for what additional benefits would be engaging for our subscribers,” said Tracy Kaplan, head of operations & partnerships at podcast company Tenderfoot TV.

Ad-free listening is a less appealing benefit because listeners can easily skip ads on podcast platforms already, podcast execs said. Insider Intelligence data from 2021 shows only 15.7% of monthly podcast listeners “never” skip ads. Meanwhile 33.6% of podcast listeners skip ads “almost all the time.” 

“We haven’t seen great traction when we only do ad-free because I don’t think it’s enough. But it is an expectation where – if you are paying – everyone expects that there shouldn’t be ads so it is a part of every offering, but oftentimes not the key driver of it for us,” said Emily Rasekh, Sony Music’s svp of podcast business development & operations. Sony declined to share how many total paid podcast subscribers the company has, but noted that the company averaged 10% month over month growth in its paid podcast subscriber count. 

Five of the top six NPR shows with the most paid subscribers offer exclusive benefits like bonus episodes and early access, according to Joel Sucherman, NPR’s vp of audio platform strategy. NPR’s “Embedded” show – while not NPR’s largest in terms of audience size – has had “huge uptake” in paid subscribers who pay $2.99 a month or $29.99 a year, said Leda Marritz, program manager of NPR+, NPR’s paid podcast bundle. Marritz declined to share the total number of paid subscribers to the show. 

Ad-free podcast subscriptions are “not necessarily going to drive growth. Or at least this type of growth that any business looking to make it a meaningful part of their revenue would like to see,” added Marritz. “That’s a big part of why this last year, we spent so much time focusing on the introduction of bonus content… Those are the types of benefits that we feel we need to offer to drive the kind of growth we want to see. And that is what we’re seeing.” — Sara Guaglione 

Numbers to know

$23.09: the average CPM rate for a 60-second podcast ad in May 2023, a $0.62 decrease year over year, according to podcast platform Libsyn.

+250: The number of Insider union members who went on strike last Friday, which has carried through this week.

13 months: The length of time Chris Licht served as the CEO of CNN before being ousted on Wednesday.  

74: The number of newsroom staffers being cut from The Los Angeles Times, due to financial strife caused by the macroeconomic impact on both advertising and subscription revenue. 

5%: The amount of BDG staffers who were laid off on Tuesday – the fourth round of layoffs within the past year. The majority of the 21 job cuts took place within the Inverse team.

What we’ve covered

Spotify cancels six true crime podcasts amid layoffs, Gimlet-Parcast merger:

  • Spotify is canceling six shows and laying off 200 people as it merges its Gimlet and Parcast podcast units into a combined Spotify Studios operation.
  • Five Parcast shows and one Gimlet show will be shuttered as a result.

Read more about Spotify’s plans to make its podcasts profitable here.

MediaMath and Viant are in talks to join forces:

  • Two of the most prominent demand-side platforms in ad tech have held talks in recent weeks with potential outcomes including Viant purchasing MediaMath.
  • The exact nature of the proposals on the table is unclear,

Learn more about the possible merger here

‘Not the future’: European publishers remain steadfast in blocking alternative IDs to third-party cookies:

  • No matter the situation, there will always be some publishers that flat out reject any touted alternatives to third-party cookies that they can’t control (sorry, ad tech).
  • Can’t blame them, though. The owners of those technologies often profit more from a publisher’s audience than the publishers themselves.

Hear from European publishers about their aversion to third-party cookie alternatives here.

What we’re reading

Complex Networks could be for sale:

After acquiring the Complex Networks in 2021 for $300 million, Insider reports that BuzzFeed is looking to offload the company, which houses brands like Complex, First We Feast and Sole Collector. In May, LeBron James and Maverick Carter’s media entertainment company SpringHill was reportedly in talks to buy Complex Networks.

The Atlantic profile on Chris Licht that preceded the CNN CEO’s dismissal: 

CNN’s CEO Chris Licht spent just over a year at the company’s helm before being let go, and the 15,000-word profile by The Atlantic on the executive’ tumultuous tenure seems to have been final nail in the proverbial coffin, as it was published just days before the executive was ousted. 

Publishers argue that generative AI content could violate copyright law: 

Digital Content Next, a publisher trade association that represents The New York Times, The Washington Post and NBCUniversal, among others, drafted a list of guidelines for the use of generative AI that bears in mind the implications of copyright law, according to Marketing Brew.

Advertising investment in Black-owned media is limited to a handful of scaled publications: 

Black media executives told Adweek that while many advertisers and marketing agencies have upheld their pledges to direct more ad dollars towards Black-owned and operated media companies, the majority of those dollars have been allocated to a few scaled publications.

This summer is a big one for media strikes: 

Unions spanning Insider and Gannett to the Screen Actors Guild – American Federation of Television and Radio Artists and the Writers Guild of America are on strike or are bracing for one this summer, reports Axios. 

Gannett journalists protest the decimation of local newsrooms:

On Monday, hundreds of Gannett journalists walked out of the job in protest of the company’s leadership slashing local newsrooms, The New York Times reported. 

https://digiday.com/?p=506742

More in Media

Walmart rolls out a self-serve, supplier-driven insights connector

The retail giant paired its insights unit Luminate with Walmart Connect to help suppliers optimize for customer consumption, just in time for the holidays, explained the company’s CRO Seth Dallaire.

Research Briefing: BuzzFeed pivots business to AI media and tech as publishers increase use of AI

In this week’s Digiday+ Research Briefing, we examine BuzzFeed’s plans to pivot the business to an AI-driven tech and media company, how marketers’ use of X and ad spending has dropped dramatically, and how agency executives are fed up with Meta’s ad platform bugs and overcharges, as seen in recent data from Digiday+ Research.

Media Briefing: Q1 is done and publishers’ ad revenue is doing ‘fine’

Despite the hope that 2024 would be a turning point for publishers’ advertising businesses, the first quarter of the year proved to be a mixed bag, according to three publishers.