Media Post, the US based online media industry daily, reported a couple weeks ago that two major news groups, UK based Daily Mail and General Trust, along with the New York Times Co in the US, achieved year on year revenue increases. Both reported growth in digital advertising strong enough to overcome the all too familiar declines in print advertising. This may be the first time a global publisher has accomplished that. Since many of us in this industry, from publishers to advertisers to service providers (including this observer) are so resigned to the seemingly endless news of inevitable demise, this was a most welcome surprise.
Is this an indication of a turnaround in the industry overall, or among some major publishers? Or is it just another blip along a path of long term decline? We should await financial results from other global publishers before reaching a conclusion. But I believe that at least some companies are getting results from better managing their online operations. They are improving their use of technology, especially online advertising, thus increasing revenue.
Over the past year or so, major news organizations have focused more intently on getting higher yield from their audience based advertising CPMs, and put less emphasis on high volume but low value, commoditized low quality inventory. Instead of making a massive number of online ad slots available through open real time bid (RTB) platforms where publishers lose control, and a large portion of revenue, to middlemen, they are keeping their ad inventory close, and limiting the number of ad slots available. They are doing this in a few ways. First, the most familiar is by maintaining direct channels to the advertisers and agency buyers. These guaranteed arrangements are familiar to all participants in the advertising business. However, publishers are applying automated methods closer to RTB in selling programmatically. Header bidding presents inventory based on desired audience targets to interested buyers, improving ad yield in return for presenting better defined audience segments to advertisers. Private marketplace programs go further, since publishers limit bids to preselected buyers. So far at least, advertisers seem willing to spend more as they expect a higher level of interest in the ads. In each case, participation by middlemen is limited and more tightly controlled by publishers. More of the ad spend flows to the media itself. Is this the beginning of improving fortunes for the news media industry? Will online finally provide sustainable revenue growth? Let’s watch and see.
(The MediaPost article referenced is https://www.mediapost.com/publications/article/308217/dont-look-now-but-some-newspapers-are-breaking-e.html )