After Cutting Open-Market Programmatic, Bloomberg Media Sees Efficiency Gains, Revenue Losses

On Jan. 1, the privately owned business publisher Bloomberg Media shut off its open-market programmatic advertising, a move to better control its user experience and drive advertisers to reach its audience by buying directly from the company itself.

Six months later, the strategy produced its first batch of results, showing early signs of success through higher clickthrough rates and higher CPMs.

“If you look at your website like a math equation, you lose the magic of what readers are coming for,” said chief digital officer Julia Beizer. “We know readers are coming for journalism first, so monetizing that through ads and subscriptions has to be our second priority.” 

When the publisher first made the transition, it began using the newly available ad space, which generated less than 5% of its overall ad revenue, to promote in-house products, such as its subscription offering, newsletter stable and original reporting.

Although the decision threatened to decrease advertising revenue in the short term, the publisher reasoned that the improved site experience would lead to a net gain in revenue brought on by improved rates of subscriber conversion and retention, among other factors.

Since the transition Bloomberg Media has seen its average ad-load time reduce by 15%, its page-load time drop by 40% and its viewability across all ad units rise by 20%, according to Beizer.

After replacing select underperforming ad units with recirculation modules, its in-house editorial has also driven clickthrough rates up to four times higher than the ads they replaced, and CPMs are up roughly 20%.

“The math is deceptively simple: The more pages you can get a reader to visit, the more ad revenue they generate and the likelier they are to subscribe,” said Myles Younger, the head of innovation and insights at U of Digital. “Bloomberg is betting that an investment in its brand will ultimately yield more financial upside.”

More broadly, the company has seen its number of digital subscribers grow 7% year over year, and sign-ups to its newsletter suite have risen 30% in the same time period. 

If your readership is general or your content is undifferentiated, it gets a lot harder to make this move confidently

Jacob Donnelly, media analyst

The figures come with a smattering of caveats. For instance, upticks in subscription and newsletter sign-ups are the product of a variety of factors and cannot be attributed solely to the recent adjustments. Likewise, the increase in CPMs is the natural mathematical outcome of eliminating the least lucrative tranche of its ad business.

Critically, Bloomberg Media has seen a decrease in advertising revenue, and it has not yet recouped that decline. Its advertising revenues were down year over year in the first half of 2023—the result of both the elimination of open-exchange and the depressed ad climate—but the publisher anticipates that its second-half ad revenues will be up year over year, according to Beizer.

But the preliminary data—although mixed—represents the early fruits of a larger, philosophical shift from the publisher toward an audience-first mindset. 

As part of this reorientation, Bloomberg Media has replaced six of its on-site ad units since January. In April, it unveiled a new, proprietary ad product for its newsletters, which has doubled its email ad revenue and increased clickthrough rate by 80%, said Beizer.

And now that the company no longer sources open-exchange demand, its ad units no longer need to be IAB-compliant, creating opportunities for the publisher to integrate richer, more dynamic ad products, such as its new “curtain leaderboard” unit.

Happy readers are lucrative readers

In removing open-market demand, the experiment exposes the conflicting interests of ad-funded publishers, who must continually strike a balance between monetization and user experience.

As a venture of its eponymous billionaire founder, Bloomberg Media benefits from an ownership group that makes long-term decisions, which lets it weather temporary financial shortfalls in exchange for the promise of future profitability. 

Ultimately, the calculus makes sense for a deep-pocketed publisher with a valuable audience, according to media analyst Jacob Donnelly, the author of the newsletter A Media Operator.

The decluttered ad experience appeals to advertisers and readers alike, encouraging both to deepen their relationship with the publisher. And the increased real estate with which to promote its content and products will only lead more readers to hit the paywall. 

“If you have a high-quality audience that is hard to get in front of, you can do this,” Donnelly said. “If your readership is general or your content is undifferentiated, it gets a lot harder to make this move confidently.”