Category: Affiliate Marketing Tips

But it’s clear that publishers are still working out the best approach to their events businesses in the wake of the pandemic that changed people’s perspectives on gatherings — and now, on top of that, an economic downturn. This is according to a Digiday+ Research survey of 112 publisher professionals.

Digiday’s survey found that, like the post-Covid-19 period, publishers’ attitudes toward their events businesses have seen ups and downs in the last two years. Throw in the state of the economy and it’s hard to know what to make of the events revenue category.

Overall, publishers grew their revenue from events throughout 2022. Sixty-three percent of publishers made at least a very small portion of their revenue from events as of Q1 of last year, and that percentage rose to 71% by Q3 2022. People were ready to be out and about again, and publishers were ready to capitalize on that. However, likely due to the downturn in the economy, the percentage of publishers who said they get even a little revenue from events fell significantly to 57% as of Q1 of this year.

Now, publishers who get no revenue from events (43%) make up the largest percentage in Digiday’s survey, followed by those who said they get a very small or small portion of their revenue from events (33% said this in Q1 of this year).

Overall, though, publishers do see events as an area for potential revenue growth. While 57% of respondents to Digiday’s survey said in Q1 that they get at least a small amount of revenue from events, 67% said they will have at least a very small focus on growing their events business in the next six months.

Although the focus appears to be much smaller this year than it has been in the past.

While two-thirds of publisher pros said they’re at least a little focused on building their events businesses, that’s actually a drop-off from 2022. A year ago (in Q1 2022), 71% of publisher pros told Digiday they would focus at least a little on building their events business. And that percentage rose to 78% by Q3 2022 before dropping to 67% in Q1 of this year.

Additionally, the number of those who said they will focus on building their events business soared six months ago before falling off at the beginning of this year. In Q1 2022, 29% of publisher pros told Digiday building their events businesses was a large or very large focus. In Q3 2022, that percentage jumped significantly to 40%, before plummeting to 25% in Q1 2023.

For large publishers (or those who made $50 million or more in revenue last year), the enthusiasm shown at the beginning of last year in the afterglow of the pandemic is clearly petering out as they wade into uncertain economic waters. A full three-quarters of publisher pros who work for large publishers (75%) told Digiday in Q1 2022 that they made at least a very small portion of their revenue from events. That percentage dropped to two-thirds (66%) as of Q1 of this year.

Meanwhile, of the large publishers who do make money from events, the percentage of those who said only a very small portion of their revenue comes from that category jumped in the last year — from 17% in Q1 2022 to 27% in Q1 2023. At the same time, the percentage of large publishers who said they make a moderate portion of their revenue from events has fallen from 19% in Q1 of last year to just 7% in Q1 of this year. And the percentage of those who said they make a large portion of their revenue from events has seen a similar drop, from 17% in Q1 2022 to 7% in Q1 2023.

But large publishers do still see the potential in events as a revenue stream. (Which can’t hurt in this economy, because any port in a storm, right?) Seventy-one percent of publisher pros who work for large publishers told Digiday in Q1 of this year that building their events business will be at least a very small focus for them in the next six months. This is a slight drop from the 75% who said the same in Q1 of last year, but it’s still more than the 66% who said they currently make at least a little bit of money from events — which indicates that large publishers see room to grow when it comes to events.

It’s worth noting that the percentage of large publishers who said building their events business will be a large focus in the coming months dropped from 17% in Q1 2022 to just 2% in Q1 2023. However, notably, the percentage of large publishers who said growing events revenue will be a very large focus shot up from 4% last year to 12% this year.

On the small publisher side of things (which includes those who made less than $10 million in revenue last year), events appear to not have as much potential, compared with their larger counterparts. For instance, the percentage of small publishers who said they get at least a very small portion of their revenue tanked in the last year, falling from 71% in Q1 2022 all the way to 47% in Q1 2023.

Additionally, not one small publisher respondent to Digiday’s survey in Q1 of this year said they make a very large portion of their revenue from events, compared with 10% who said so in Q1 of last year. And the percentage of those who said they make a large or moderate portion of their revenue from events fell from 22% last year to 11% this year, while the percentage of those who said they make a small revenue portion from events rose from 6% last year to 14% this year.

And small publishers likely won’t be betting big on events anytime soon. Digiday’s survey found that the percentage of small publishers who said they will put at least a very small focus on building their events businesses in the next six months fell in the last year, from 71% in Q1 2022 to 64% in Q1 2023.

However, nearly two-thirds is still a significant number of small publishers who will focus at least a little on building their events businesses. And of those small publishers who will focus on events, the ones who said they’ll put a large focus on that part of their business account for the largest percentage, at 22% (which is unchanged from a year ago).

Meanwhile, the percentage of small publishers who said they’ll put a moderate focus on building their events business in the next six months fell from 22% in Q1 2022 to 14% in Q1 2023. And the percentage of those who said they would put just a small focus on building events bumped up a bit in the last year, from 6% in Q1 2022 to 11% in Q1 2023.

Other small- to mid-sized publishers and media buyers are still uncertain about the state of the second quarter after seeing even more deals get bumped into the second half of the year, leaving Q2 just as precarious as Q1.

“It seems like Q2 will be in a much better place than Q1 was. I feel Q2 could be a really good quarter,” said a sales executive at a large digital publication who spoke on the condition of anonymity. “It could all change, but from what I’m seeing right now, clients are starting to open up and release those budgets.” 

The sales executive declined to share exactly how much they anticipate the company’s advertising revenue to grow by in the second quarter year over year, but that Q2’s projection will be “quite a bit stronger,” particularly in programmatic. They continued that one of the reasons for that possible growth is the fact that advertisers are more willing to talk about longer, multi-month or multi-quarter deals now. Whereas a lot of the campaigns in Q4 2022 and Q1 2023 were focused in-quarter and prioritized fast execution.

Not all advertisers can or want to secure longer-term deals, said Stacey Stewart, chief marketplace officer at UM Worldwide. “People want to keep a lot of flexibility right now so we’re not seeing a lot of longer term investments,” she said. This trend began about a year ago during the 2022 upfront cycle where clients began cutting back on year-round deals and that trend “continues to this day,” she said.

IAB’s Internet Advertising Report for 2022, which was published Wednesday, showed that digital advertising spend grew last year, but slowly. While internet ad spend in Q3 and Q4 were down year over year by 8.4% and 4.4%, respectively, the total annual spend was almost $210 billion, a 10.8% increase over 2021, per the report. 

As a whole, Stewart said her clients’ budgets are down on average between 15-20% year over year, depending on the category. Categories typically considered to be “tried and true” — like consumer packaged goods — are down.

“Q2 is slow. I don’t think we’re seeing any big massive change in spend [compared to the first quarter of the year,” Stewart said. And the secured advertising is focused on more flexible channels like programmatic and CTV.

Another publishing exec who also spoke anonymously with Digiday said Q2 is “looking relatively promising” when compared to the first quarter of the year, adding that advertisers that started coming back into play in the later weeks of Q1 seem to be holding steady and signing more deals in the second quarter.

“I’m cautiously optimistic about Q2,” said the second executive on April 3. The only caveat to that optimism is coming from the fact that more prospective advertisers than usual are ghosting their sales team after receiving an RFP response, meanwhile other advertisers are asking to delay launches of custom campaigns to later in the year.”

Otherwise, “I feel pretty good about the level of visibility,” the second executive said. “In Q1, we had a pretty good sense [by February] of where we were going to end up and it’s where we ended up — not that I wanted to necessarily end up where we ended up, but I knew what it was going to be. So I have largely the same degree of confidence that I have a sense right now of where Q2 will be — plus or minus a bit on the fringes.”

Not all publishers are in as comfortable a spot as the first two sources, however. In fact, it seems as though while advertisers might have more of a budget to work with, they want more reassurances upfront before any money exchanges hands — or even before ink dries on the contracts. And even then, it’s hard to keep a thumb on the deals that do close.

One publisher who was given the opportunity to speak anonymously under Chatham House rules during a working group session at the Digiday Publishing Summit on March 28 called it a “rinse-and-repeat” cycle of ad dollars getting approved and released on a week-to-week basis.

“We’re seeing a lot of deals [stay] at [the verbal stage] forever and they’ll push the campaign down [making it] impossible to forecast,” said another publisher during the DPS working group. They added that “campaigns that were supposed to start in January are now starting in July, or so they say.”

A third publisher at DPS said that they’ve resorted to only working on deals stemming from in-bound RFPs rather than trying to sell existing or prospective clients on larger tentpole campaigns this year to hopefully lockdown the ad dollars more securely in the coming quarters.

There is a degree of a “bumper car effect” in the ad market right now, said Seth Hargrave, CEO of media buying agency MediaTwo Interactive, where several of his clients’ ad budgets that were supposed to be approved for Q1 were bumped into Q2. That trend could potentially persist throughout the remainder of the year, however, until a recession is no longer viewed as a possibility, he continued.

“A bumper car effect is probably the safest way to think about budgeting through the remainder of the year,” Hargrave said. “Talk of recession is still everywhere and I do believe that there’s a tremendous weight on the shoulders of brands as a result of not knowing what the latter half of this year is going to bring. Until we’re at a point where the dreaded R-word is no longer being mentioned, I think you’re going to continue to see [delays happen].”

Hargrave predicated that Q2 2023 will end relatively flat in terms of the size of his clients’ budgets compared to their budgets in Q2 2022. Though a few notable categories are expected to be up year over year in terms of advertising spend, including finance and banking (up about 20%) and government and higher education (also about 20%), he added.

Mia Vieira, group media director at MMI Agency, oversees a higher education client’s ad budget and she said that she’s “pretty confident” that their budget will stay intact at least through the end of June. Even her client’s full-year budget — which has remained pretty flat from 2022 to 2023 — is relatively planned out, she continued, though admitted that come Q3 and Q4, there may be some changes to the budget or pre-planned campaigns depending on the economy or how well lead-generation has worked in the first half of the year.

“From a budgetary standpoint, a lot of [advertisers] are still banking those funds. I think they have them, they are just delayed to spend [them],” said Hargrave. And once they are ready to spend, they’re going to be a lot more strategic about how they execute on campaigns, he added.

What we’ve heard

“And I will say that sometimes you don’t have the resources to hire the way you want to [in terms of improving diversity] … but what you can do is think about what are other ways that you could support this. One of the things we’re doing, for instance, for our events is being really mindful that at least 50% of our speakers represent [people from diverse backgrounds] and/or are women.”

— Gina Joseph, chief strategy officer of VentureBeat, on the latest episode of the Digiday Podcast

VC market slowdown continued in Q1

U.S. venture capital activity fell in the media sector in the first quarter of 2023 compared to 2022, according to data from capital market research firm PitchBook. It’s a continuation of the slowdown that began in the latter half of last year.

Key numbers:

There were 68 VC deals in the media sector in Q1 2023, compared to 137 in the same quarter in 2022. 

Q1 2023 had the lowest deal count in the first quarter of the year since at least 2013, which is as far back as Pitchbook’s data goes.

However, the value of deal activity in the media sector remained steady compared to Q4 2022, at $200 million in Q1 2023. 

There were five VC exits (when investors sell their investment to exit the company) in Q1 in the media sector, the same as in Q4 2022. 

Holistically, fundraising momentum has slowed across the U.S. venture capital market to just $11.7 billion in Q1 — compared to $170.8 billion raised in total in 2022 (notably, 74.4% of the capital raised in 2022 was closed in the first half of the year).

“The sluggish pace of fundraising for emerging and first-time fund managers could be a precursor to formidable fundraising experiences through the end of the year,” Pitchbook’s report reads. The report cited geopolitical tensions, inflation rates and bank failures for spreading “anxiety across the markets.”

Media analysts and investors told Digiday last year they were seeing the start of a market correction, bringing down media company valuations and making it a difficult time for publishers looking to raise capital to do so — especially from new investors. The first quarter of this year was a continuation of that trend, said Sam Thompson, senior managing director at M&A advisory firm Progress Partners.

“It’s a flight to quality. It’s larger investments into a smaller number of companies. We’ve seen a slowdown overall, whether it’s in venture or private equity. There’s no frothiness whatsoever,” Thompson said. “Revenue is of all importance.”

Bonin Bough, co-founder of Group Black, said at the Semafor Media Summit on Monday that the media collective, which is reportedly looking to acquire BDG, Vice Media Group or Vox Media, is waiting for the market to “settle” before swooping in. “We are not going to make a mistake and purchase something and acquire something where we’re upset at the price point,” Bough said. 

VC and PE-owned media conglomerates will likely start to shed assets that are “non-core” or underperforming, Thompson said. One recent example of this was PE-backed Recurrent Ventures selling off Saveur magazine on Monday – the only food publication in its portfolio of 20 titles. In an internal staff memo obtained by Axios, Recurrent Ventures CEO Alex Vargas cited the lack of “meaningful opportunities” to acquire other food titles as one of the reasons for offloading the publication. – Sara Guaglione

Numbers to know

<1%: The amount of money towards NPR’s $300 million total annual budget that comes from the federally funded Corporation for Public Broadcasting. Given this, Twitter still labeled NPR’s account on the platform as “state-affiliated media” – later revised to “government-funded media” – causing the nonprofit news organization to leave the platform altogether this week. 

$800 million: The valuation of Forbes by a consortium of investors that is looking to acquire the publication, despite losing its lead investor, Sun Group, due to concerns over its tie to Russia. 

10.8%: The amount that total internet advertising revenues grew by from 2021 to 2022, increasing by more than $20 billion to a total of $209.7 billion, per IAB’s Internet Advertising Revenue Report.  

What we’ve covered

How newsletter publishers are expanding and diversifying beyond inbox-based revenue: 

A media company can only grow so much when sticking to one channel. 

At least that’s what four newsletter publisher executives said when outlining their plans to Digiday about expanding into events, video and podcasts to diversify their businesses and grow their revenue this year.

Read more about revenue diversification in newsletter media here. 

SSPs break with the past as push comes to shove in ad tech: 

Competition in ad tech is ratcheting up, especially among supply-side platforms as leading lights in the sector jostle for differentiation, or even just “stickiness.” 

In certain cases, this involves exploring new routes to market and new revenue models.

Learn more about how ad tech is coming to terms with disintermediation 2.0 here. 

Publishers create task forces to oversee AI programs:

What started out as an informal dabbling with generative AI technology inside publishers’ newsrooms has developed into a full-fledged focus area for some media companies. 

New teams are being formed within BuzzFeed, BridgeTower Media, Forbes, Ingenio and Trusted Media Brands, all dedicated to overseeing AI initiatives within different parts of their respective companies, ranging from editorial to tech.

Read more about publishers’ approaches to AI strategy here.

Publishers test generative AI tools to boost SEO: 

Generative AI chatbots like ChatGPT and Bing could present a threat to some publishers if the chatbots end up siphoning away search referral traffic from their websites. 

But not all publishers are ready to let go of SEO-driven content, though their strategies to address this vary.

Learn more about how generative AI can assist in publishers’ SEO efforts here.

What we’re reading

Vox Media is spinning off NowThis ahead of the 2024 election: 

A year after buying the political video brand, Vox Media is letting go of NowThis, allowing it to become an independent media company ahead of the upcoming presidential election, The New York Times reported. The deal still gives Vox Media a minority share in the brand, meaning that it will earn financial benefits from NowThis without needing to cover upfront operational costs. 

CNN’s chief executive is backing Don Lemon after misogynistic allegations:

Following a report by Variety earlier this month that claimed CNN anchor Lemon of exhibiting a history of misogynistic behavior, Insider reported that the news network’s CEO Chris Licht will stand by Lemon.

Experts debate if AI-generated images will cause a misinformation crisis 

Reuters Institute spoke with several journalists, experts and fact-checkers to explore the possible impact of generative AI technology like DALL-E and ChatGBT on the misinformation problem. 

Elon Musk’s Twitter wants to take on the media industry:

The Wall Street Journal reported that Musk is expecting that citizen journalism shared on Twitter will be able to disrupt traditional journalism’s business model, despite a large constituency of the platform being employees of the media industry. 

Semafor’s first media event brought together top media executives: 

Semafor’s Media Summit on Monday – attended by Digiday’s media team – featured conversations with Group Black’s co-founder Bonin Bough, IAC’s chairman and senior executive of IAC Barry Diller, CNN Worldwide’s chairman and CEO Chris Licht and The Messenger’s founder and CEO Jimmy Finkelstein. The event covered topics ranging from the risks of generative AI in the media industry to the role of viewing reporters as talent.