Dotdash Meredith’s Digital Ad Revenue Grows 12%, Powered by Cookieless Ads

Digital media firm Dotdash Meredith, an IAC company, notched its second consecutive quarter of double-digit advertising growth, largely due to the continued performance of its cookieless targeting tool called D/Cipher.

The media company, which houses a portfolio of titles including People, Serious Eats and Southern Living, saw a 12% increase in year-over-year digital advertising revenue, growing from $212 million to $238 million, according to its second quarter earnings announced Tuesday.

Overall, it generated $425 million in quarterly revenue, up 3% from the same period last year, and grew its adjusted Ebitda (earnings before interest, tax, depreciation and amortization) by 25% to $66 million. 

The growth is a product of a variety of factors, but its cookieless solution D/Cipher has played a key role as a sophisticated targeting tool that has no reliance on cookies — and in fact consistently outperforms them, according to Lindsay Van Kirk, senior vice president and general manager of D/Cipher.

In a recent case study with jewelry brand Pandora, D/Cipher performed better than any other form of targeting — including third-party cookies and demographic targeting — in two key areas for Pandora: foot traffic and sales lift.

“The performance is amazing because the industry is always trying to find ways to tie media buys to real results,” said Van Kirk. “This proves that Dotdash Meredith can drive national brick-and-mortar sales for a brand without any cookie or identifier.”

The results, detailed below, help explain why Dotdash Meredith has seen consistent digital ad growth over the last three quarters, bucking the industrywide trend of decline or stasis. The company now uses D/Cipher in more than 50% of its direct transactions, according to IAC CEO Joey Levin.

“Advertisers are adopting our marquee ad targeting product, D/Cipher, which outperforms cookie-based offerings and reaches a differentiated audience — a powerful weapon for our premium sales force,” Levin said in a shareholder letter.

D/Cipher performs for Pandora

Pandora was the first advertiser to test the D/Cipher guarantee, in which Dotdash Meredith promised brands that its cookieless tool would outperform any other targeting solution or it would re-run their campaign.

For Pandora, its goals for the campaign were to elevate brand perception, create style relevancy and consideration, and fuel sales, according to Annie McAndrews, Pandora’s director of media and CRM. The jewelry company also wanted to drive in-store foot traffic.

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To measure the campaign, Dotdash Meredith worked with third-party research provider InMarket, which uses a panel of people who agree to share their data, including location and purchase behaviors.

Dotdash Meredith tagged the creative it used for Pandora, which allowed InMarket to compare the impact of exposure to the Dotdash Meredith campaign against a control group that had not been exposed.

The results found that consumers exposed to the D/Cipher intent-targeting tool visited Pandora physical stores at a 76% higher rate than those not exposed to it — a lift three times higher than the typical InMarket benchmark. Nearly half of this incremental lift came from new consumer purchases, according to McAndrews.

“Whether or not third-party cookies exist, D/Cipher and its custom intent targeting are more valuable to us,” McAndrews said. “It also allows you to tap into the Apple iOs audience, which is incredibly valuable. So bigger reach, more targeted, right dollars, right place, right time.”

In total, across 27 client case studies since its launch, D/Cipher targeting has consistently outperformed all other forms of targeting, according to Van Kirk.

Dotdash Meredith continues its momentum

The continued traction of D/Cipher comes on the heels of news that Google no longer plans to deprecate third-party cookies. 

The July announcement has left the advertising industry scrambling to anticipate how the about-face will affect signal loss across the open web.

But D/Cipher, which blends the high-intent nature of Dotdash Meredith content with machine learning, allows brands to serve relevant ads to users without third-party cookies or alternative identifiers, circumventing the issue entirely. 

It also enables advertisers to serve relevant ads to users in cookieless environments, such as Safari, which make up nearly 50% of all web inventory, according to a recent estimate from 33Across. 

Dotdash Meredith is also one of a number of media companies to sign a licensing partnership with the artificial intelligence firm OpenAI. In addition to a revenue source, the deal allows Dotdash Meredith to use OpenAI technology to improve its audience segmentation capabilities, which it hopes will further improve its targeting in the coming months.

“We believe digital revenue will accelerate from here and growth could exceed 15% in the third quarter,” Levin said. “If incremental revenue continues to convert to digital-adjusted Ebitda at current rates, we should be growing digital-adjusted Ebitda at least 25% in the upcoming quarter.”