Media Briefing: Pubs’ Q2 earnings look rosy thanks to AI deals and an improved ad market 

Of the five public media companies included in this earnings analysis, four reported increases in digital advertising revenue year over year, with Dow Jones, The New York Times and Gannett even seeing increases over the same quarter in 2022. 

But there were a lot of other positives (digital subscriptions, AI content licensing deals and commerce to name a few) that helped pad publishers’ bottom lines during the second quarter of the year and instill a sense of optimism for how the rest of the year will pan out. 

Below is a look at how publishers’ businesses fared between April 1 and June 30.

By the numbers:

• BuzzFeed’s total revenue in Q2 was $46.9 million, down 24% year over year (after excluding revenue from Complex Networks).  
• Dotdash Meredith’s total Q2 revenue was $425.2 million, up 2.7% year over year.
• Dow Jones’ total revenue increased 4% year over year to $566 million during the company’s fourth quarter (which runs April 1 – June 30 per its fiscal year).
• Gannett’s total revenue for the quarter fell 4.8% year over year to $639.8 million, but digital revenue increased 6.2% to $278.4 million. 
• The New York Times Co’s total revenue in the quarter was $625 million, up 5.8% year over year.

Digital advertising 

Publishers’ digital advertising revenues started to return to 2022 levels during the second quarter of 2024, after last year’s softness. 

Dotdash Meredith, Dow Jones, Gannett and The New York Times all reported increases in their digital ad revenue in the second quarter of 2024, leading to totals that exceeded the corresponding quarter in 2022. (Dow Jones’ digital advertising was calculated based on the reported year over year increases in total ad revenue and share of digital advertising within that business line as the company does not explicitly report out total revenue for the business subdivision.) 

Gannett’s CFO Doug Horne attributed the company’s 4% year-over-year growth in digital ad revenue to an increase in programmatic advertising and page view growth during the quarter, which is a trajectory he said he expects to continue throughout the remainder of 2024. 

“On the media side, our pipeline is the largest it’s ever been,” said Gannett’s CEO Mike Reed during the earnings call. “As we close that business in the third quarter, we’ll start to really see digital advertising revenue pick up both in Q3 and Q4.” 

While Dotdash Meredith’s Q2 2024 digital ad revenue was up by 16% year over year, its $153.4 million did not exceed the $157.5 million it brought in in 2022. IAC CEO Joey Levin said he has optimism that this business is still on a growth path. He attributed the company’s digital advertising growth to higher programmatic rates and a 9% increase in core sessions to its sites. 

“We continue to prioritize ad performance over ad density or frequency, and our programmatic ad rates are up around 36% in the second quarter versus an estimated 15-20% lift in rates for the broader market,” Levin wrote in his shareholders letter. 

BuzzFeed did not report an overall ad revenue increase, but its programmatic ad revenue was up year over year for the first time since the first quarter of 2021. The programmatic uptick was only 3% year over year, though, and not enough to offset “headwinds in the direct sales channel,” as BuzzFeed founder and CEO Jonah Peretti described in a letter to investors. Nonetheless, the publisher’s exposure to those direct sales struggles may be mitigated by the fact that programmatic sales now represents two-thirds of BuzzFeed’s overall ad revenue.

Digital subscriptions 

The three companies that report out their digital subscription bases (Gannett, News Corp’s The Wall Street Journal and The New York Times) all continued their quarter-over-quarter growth pattern, which has held for the past five quarterly earnings. 

Gannett announced that its digital-only subscription business broke new records in the second quarter with total revenue for this business growing about 22% year over year and average revenue per users (ARPU) increasing by 20% year over year. Despite the growth, Reed said ARPU was $7.62 in Q2, which is still “almost 100% below where the market is” and is determined to bring it up to market levels over the next three years. The New York Times’s digital-only ARPU was $9.34 in Q2 by comparison. 

“We expect to be able to double [our digital subscription revenues] over the next three years through ARPU,” said Reed. The expectation is that Gannett’s new paywall strategy and content personalization efforts will convert more readers to paid subscribers. 

The NYT finally crossed the threshold of 10 million digital-only subscribers, adding 300,000 new digital-only subscribers in the second quarter, per its earnings call.  

Traffic trends

While core updates to Google’s algorithm and changes to social platforms’ audience strategies have had a negative impact on many publishers’ referral traffic, BuzzFeed, Dotdash Meredith and News Corp were three publishers that reported wins in audience growth in the second quarter. 

BuzzFeed notched sequential increases in the number of logged-in visitors to its sites as well as in the number of page views per unique visitor, the latter figure increasing for the third straight quarter. “Direct traffic continues to be our largest source of audience traffic, far surpassing referrals from third-party platforms including Facebook,” Peretti wrote in the investor letter.

News Corp’s New York Post achieved profitability in fiscal year 2024 “after decades of chronic losses,” said CEO Robert Thomson during the earnings call, adding that the site achieved 117 million unique visitors in June, up from 145 million a year prior.

As stated earlier, DDM’s traffic increases have contributed to higher programmatic ad revenue in the past quarter, but Levin elaborated that “DDM has done a really great job in holding court within the Google Search ecosystem,” which represents less than half of the company’s referral traffic.  

Digging further into Google’s changes – namely its rollout of AI Overviews in May – Levin’s letter to shareholders said that impact to IAC’s overall traffic has been “negligible,” with click-through rate differentials on pages with AI overviews versus those without AI overviews being “minor” so far. 

A peak behind the Al negotiation curtain

Speaking of artificial intelligence, DDM, News Corp and Gannett shared a bit more about their approach to working with (or against) AI tech companies at this point in the year. 

Reed shared that the reason Gannett hasn’t struck any content licensing deals with AI tech companies yet, despite being open to them: “We haven’t seen a deal yet that we think represents fair value for our content [in the long run].” 

“As an industry, as a company, we’ve witnessed the impact of Big Tech in the past and we want to make sure that we’re not trading short-term gains for the long-term impact or long-term value,” added Chris Cho, Gannett’s president of digital marketing solutions. 

Meanwhile, DDM shed a bit more light on the deal it signed with OpenAI in May. Licensing and other revenues, which is the revenue line that contains the fee from the OpenAI deal, increased by 18.7 to $31.1 million in Q2. The OpenAI deal represented roughly half of the $4.9 million bump, IAC evp, CFO and COO Christopher Halpin said during the company’s earnings call. And Levin added that the company is in the process of shopping around for further deals with AI companies. 

And as for why News Corp was able to score such a high price (more than $250 million over five years) for its content licensing deal with OpenAI in May, Thomson said during the earnings call: “In news media, our profile and impact have only grown over the past year when many news organizations lost the plot editorially and commercially … The quality of our journalism was a prime motivator for Sam Altman and his talented team at OpenAI with whom we are genuinely proud to partner.” 

While BuzzFeed repeatedly touted itself during its latest earnings call as “the media company for the AI age,” in Peretti’s words, deals with AI companies did not come up. Instead, the publisher talked up its work to create “AI-powered content,” including for advertisers such as Target. “Our AI-powered content generators have demonstrated higher audience engagement and participation relative to other formats,” Peretti said during the earnings call.

Counting on commerce

The NYT, Gannett and BuzzFeed each mentioned positive momentum in their commerce businesses in Q2. 

As part of its “digital other” revenue stream, which was up 20% year over year to $24.3 million in the quarter, Gannett reported that affiliate revenue grew more than 100% year over year. The company is pursuing additional affiliate partnerships to further capitalize on this growth, Reed said. 

The Times’ “other revenues” category, including affiliate commerce and licensing, grew 4.9% year over year to $67 million, which the earnings report said was “largely” due to affiliate commerce from the company’s product review site, Wirecutter. 

BuzzFeed’s affiliate commerce revenue increased by 9% year over year to $10.4 million. In the investor letter, Peretti cited commerce alongside programmatic advertising as “two of our largest and highest margin lines of business.” And BuzzFeed seems to expect the commerce growth pattern to continue. This year’s Amazon Prime Day occurred in the third quarter and was BuzzFeed’s “biggest Prime Day Ever, growing revenues over the two day period by a strong double-digit percentage year over year,” said Peretti during the earnings call.

What we’ve heard

“We applaud the work of the U.S. House Judiciary Committee in pursuing the misnomer that is the Global Alliance for Responsible Media or GARM, and its coordinated boycott of media platforms perceived to be unfashionable by illiberal liberals. GARM harm has been real, and there need to be commercial consequences.”

– News Corp’s Robert Thomson on the fall of GARM

What we’ve covered

Lawsuits against GARM call into question the politics behind brand safety

• Elon Musk launched a antitrust legal assault on the World Federation of Advertisers (WFA), accusing the trade group of acting like a mob to block ad dollars from his platform, X.
• Then, right-wing video platform Rumble jumped in with its own lawsuit against the same group. Now, News Corp sounds like it wants to join the fray with similar intentions.

Learn more about the ongoing lawsuits here.

Future of TV Briefing: Disney, Paramount and Warner Bros. Discovery quantify the TV-streaming divide

• If there’s ever going to be a specific point in time marking the Rubicon between the TV business’s past and future, it may have been last week.
• As Disney, Paramount Global and Warner Bros. Discovery released their latest quarterly earnings reports, they revealed streaming businesses finally getting into the black and traditional TV businesses getting even bleaker.

Read more about TV versus streaming divide here.

Criteo is holding M&A discussions with Skai to bolster its retail media play

• Criteo is in M&A talks with Skai, a company formerly known as Kenshoo, with the negotiations potentially leading to a deal worth hundreds of millions of dollars, according to sources as the France-based outfit looks to position itself as a retail media specialist.
• The two companies have been in talks for some weeks, indicating negotiations are in a relatively advanced stage.

Read more about how ad-tech M&A has been heating up here.

What we’re reading

The New York Times Will Stop Endorsing Candidates in New York Races

The New York Times editorial board will no longer endorse candidates in local races beginning immediately. Kathleen Kingsbury, The Times’s Opinion editor, did not give an exact reason for the change.

News outlets were sent leaked Trump campaign files. They chose not to publish them

Hours after President Joe Biden dropped out of the 2024 presidential race, a person who claimed to be inside Republican nominee Donald Trump’s campaign emailed three major news outlets and said they had interesting information about the race. The outlets declined to publish them.

NYT to debut weekly Wirecutter podcast

The New York Times is creating a weekly podcast surrounding its recommendations site, Wirecutter. “The Wirecutter Show” will debut next Wednesday.