With the deal, BuzzFeed gets investment, scale and links to an older audience, as well as more news resources and access to Verizon Media’s ad platform. Telco Verizon has been writing down and selling off media assets like Flickr and Tumblr for the last few years. BuzzFeed gives HuffPost a relevant home.  

BuzzFeed, venture capital-funded and ad-supported, is a bellwether for the health of the digital media industry and a mild obsession for publishers and industry analysts. In buying HuffPost (which Peretti co-founded), the sum of their two parts won’t be much greater than the whole, but given the challenging ad market, their future is more optimistic together, said Alice Pickthall, senior media analyst at Enders Analysis.

“Shrinkage seems inevitable,” she said, “but at a far slower pace and with a more optimistic outlook than if BuzzFeed and HuffPost had remained separate entities.”

“This is a defensive horizontal merger; BuzzFeed is the kingpin,” said independent media analyst Alex DeGroote. “It’s about survival.”

Here’s what the media market expects from the merger.

Scale can be helpful

With the deal, Peretti has advanced his pursuit of scale to combat the duopoly. Hockey-stick growth for both publishers has slowed since their heights. Combined, HuffPost and BuzzFeed News had over 108.5 million monthly visits in October, according to SimilarWeb, with HuffPost accounting for 85.5 million. 

“They are doing what the rest of the media industry was focusing on back in 2010 … but now most of the rest of the industry has found other and better ways to monetize,” said independent media analyst Thomas Beakdal.

That still doesn’t make it a challenger to Facebook and Google, but that’s OK, said Brian Wieser, global president of business intelligence at GroupM.

“If you’re in a position to keep growing, then scale can be helpful,” he said. “Cost can be reduced for every dollar; you can apply more tech for your business.” 

More cost-cutting 

Consolidation mean synergies, but 2020 has already been a year of deep cuts. 

Most analysts expect a decent ad recovery in the second half of 2021, as long as there’s a vaccine, which gives the new entity time to rightsize its enlarged cost base. Both edit teams have unionized. Peretti has already said that BuzzFeed staff are protected. 

With both publishers barely turning a profit, centralized content hubs and shared procurement operations should help. BuzzFeed is expected to break even this year, or slightly best it, after cutting costs by $30 million through furloughing staff, pay reductions and layoffs, according to The Wall Street Journal. At its height in 2016, BuzzFeed was valued at $1.7 billion, but since then growth has slowed and the company has worked itself into a much leaner state, retrenching its international operations especially within its high-profile but loss-leading news operation. 

“In March, we went from expecting to be profitable for the year to simply trying to limit the damage to under $20 million in losses,” Peretti wrote to staff earlier in November. Growth this year has come from its direct-sold business, affiliate deals and display revenue.

At the end of 2019, Verizon valued its media assets at $16 million (AOL acquired HuffPost for $315 million in 2011). That was before the ravages of the coronavirus. “Investor expectations [of Verizon Media’s value] would be low,” said DeGroote. “Verizon Media is not really on the radar for the Verizon parent company.” 

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For one global publisher, revenue for the second half of 2020 is up 22% year-over-year, with still more deals to close. That’s high by any standard. With most of Europe and the U.S. bracing for a second Covid-19 wave, early next year’s revenue health is still too uncertain to tell, and the CRO is cautious of being too bullish.  

“Everything is happening later, that’s for sure,” they said. “We’re in a positive position, but we won’t know whether that will all come in Q1.”

Two other U.S.-based digital media executives said that revenue from the last three months of 2020 will balance the books, making up for the headwinds they suffered between March and May. However, they were also concerned that the momentum was not yet stable, as the nation grapples with the pandemic and cash flow could become a concern by the end of March next year.

“There is a delay on Q1. Everyone is holding back, wondering if people are going to make real decisions in Q1,” said a fourth digital publishing CRO. “We’ve closed quite a bit, but not what I would have expected from this year.”

The last three months of the year are often the best-performing as marketers spend as much of their budgets as they can so they don’t evaporate the following year, coupled with flashy holiday campaigns. This year, pent-up demand, political ad dollars and an extended shopping season have been a blessing for publisher ad revenue. 

Marketers, uncertain of whether budgets will be cut again, are demanding a faster tempo market. Publishers like The Wall Street Journal have said that campaign timeframe, from conception to launch, has shrunk from roughly three months to four weeks. Thanks to Google and Facebook, where it’s not uncommon for multimillion-dollar buys to be booked days before the campaign launch, this short-termism had a foothold before the coronavirus.  

Baking in cancellation clauses

Digital publishers with a network of brands and diversified revenue streams will win out for their ability to switch content campaigns to podcast, display or video ad spots across titles. As with previous recessions, ad spend leaves old mediums and returns quicker to new ones. Global digital ad spend is predicted to decrease 2% this year to account for 51% of global ad spend, which is higher than previous forecasts, according to Publicis Media agency Zenith. Audio, premium OTT and addressable video saw early surges between March and May. The marketing mix has a chance to reset. 

Digital ad budgets were turned off quickly between March and May, but rebounded quicker because of the flexibility of digital formats. There’s no reason for marketers to secure ad spots for months in advance. That only becomes a real problem when it’s inventory-based versus creative-based, said the fourth exec.

“There’s no gun to their head unless you’re offering a discount,” the exec said. “We have to rely on sellers selling great ideas aggressively; we can say, ‘I am holding this for you but I have to let that IP fall to other advertisers.’ We sell on the power of ideas and the notion that we cannot sit on competitive pricing for six to nine months.” 

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By year’s end, The Information will have hosted 50 virtual events and surpassed ticket goals for each of them, though it wouldn’t say what those goals were. The publisher is fresh off tests with two marquee events usually held in person: its Autonomous Vehicle Summit in June and WTF Summit in September. 

“I was quite nervous about how they would translate, but they turned out to work incredibly well,” founder and editor in chief Jessica Lessin told Adweek. “And I think it gets back to who’s in the room and what are they saying. Our strength has always been our community.”

Therein lies the challenge most organizations face in converting their physical events businesses into virtual equivalents: recreating interactions with the community digitally. Before the pandemic, events were seen as a critical life source for media organizations. Publishers including The Wall Street Journal, The Atlantic and CNBC generated roughly $22 million in event registrations last year, according to event software company Bizzabo.

Virtual and physical events have a different economic model: While the cost of scaling virtual events is far reduced, charging ticket prices for online content that has historically been free is a model that has yet to be proven.

The Information’s WTF virtual conference took place over two days in early September, featuring a lineup of speakers including Facebook’s COO Sheryl Sandberg and chief diversity officer Maxine Williams, according to Lessin. In total, over 500 attendees bought tickets costing $1,000. For comparison, 2019’s event hosted fewer than 200 attendees in Times Square.

To recreate the interactions between attendees, The Information used software Hoppin to chat with people during appointed network breaks in five-minute intervals. The publisher also uses Zoom for its virtual events. Most of the speaker sessions were pre-recorded, which helped with preparation but limited their timeliness. In the virtual world, attendees were more inclined to interact, ask questions and chat, too. According to Lessin, this model generated greater revenue and far lower costs than its physical event.

Both the Autonomous Vehicle Summit in June and its WTF Summit in September retained the sponsors from their physical equivalents, which included Helm.ai and Roku. “It was incredible,” Lessin said, adding that she can’t envision a world in which the publisher would go back to offering just in-person events without a virtual component.

The Information is not alone. Other media companies are investing in virtual events, creating a competitive industry vying to replicate the feeling of gathering in a conference hall on a computer screen.

Ann Marinovich—who just joined as the company’s vp of brand partnerships from Time—noted the low entry barrier for organizations to get into the game (it’s a lot easier to set up a Zoom room, for example, than rent an accommodating space in a major city). Still, the level of engagement among its audience and ticket sales “says a lot that people are willing to pay to come to them as well,” she said.

“Engagement remains by far the biggest challenge. With Zoom fatigue looming over us, attending yet another online event is simply too much of an undertaking,” said Julius Solaris, editor in chief of EventMB, part of travel news brand Skift. “Hopefully, a mix of better event strategy and the evolution of technology platforms will have a positive impact on the overall engagement levels.”

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The U.K. publisher is running a campaign targeting prospective home buyers on its site using data from real-estate company Zoopla. It’s the first campaign using the publisher’s first-party data targeting tool, Unity, which doesn’t use any third-party identifiers, with the goal of winning new business and growing ad revenue. And it’s already delivering on this last point, according to the publisher.

The Telegraph has been building up its first-party data trove since introducing its subscriber-first strategy in 2017. In October, it had 525,000 print and digital subscribers, plus 6.8 million registered users (who can access several articles a week in exchange for an email address), nearing its goal of 1 million subscribers and 10 million registrants by 2023.

With Unity, ad buyers can use their own first-party data pools to locate and match audiences. Using secure data clean rooms called bunkers from tech platform InfoSum, marketers can only target The Telegraph audience that overlaps with the marketers’ own databases. These types of second-party data deals have been gaining steam now that there are more reliable ways to guarantee against the leakage of valuable data.

Third-party cookies have a limited shelf life, and publishers like The Washington Post, Insider and Vice are exploring a future without them. Ad buyers can still target audiences using cookie-based identifiers, but they are becoming less effective as web browser makers increase opacity to protect user privacy.

With a $19 billion industry riding on the back of third-party data, publishers are readying themselves to take a slice of it as cookie-based vendors dwindle.

Traffic surges to property sections

Since March, when stay-at-home orders went into effect, The Telegraph has seen a surge in traffic to its property section, with the number of monthly visitors and pageviews doubling year-on-year as people explore upgrading their living spaces. As such, its knowledge about this audience grew. 

Zoopla’s data set of two audience segments—first-time buyers and upsizers, recognized by demographics like age from registering on the site and inferred by site behavior and content consumption—is securely stored in InfoSum’s data bunker. The tech matches that audience on The Telegraph’s own data, targeting each segment with a different, relevant creative message that links back to Zoopla’s property finder site.

“What we can now do is add an extra layer of intelligent insight about an audience that Zoopla knows really well,” said Karen Eccles, senior director for commercial innovation at The Telegraph. “We can understand different things about content consumption, preferences and activity to find users elsewhere on the site.”

As the campaign is still ongoing, The Telegraph declined to share performance metrics. 

The buy side is catching up

A number of other advertisers in the telecoms, tech and finance verticals—with rich first-party data pools—are speaking with The Telegraph about Unity with campaigns coming down the pike, according to Eccles, though she didn’t share any brand names.

Even so, the ad targeting tool is already contributing to a “substantial” increase in ad revenue due to winning new business and increasing in campaign size, although Eccles again declined to give specific figures. The Zoopla campaign was awarded £50,000 ($66,000) in media spend by The Telegraph for winning a competition set by the publisher to support clients through the tough summer months.   

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Before she was named acting president in July, she had been executive vice president and chief financial officer. Chirichella joined the company in 2011.

“She has expertly led the division over the past several months, and we are confident in the future as Debi and her team continue to build on the legacy of our great brands around the world,” said Hearst president and CEO Steven Swartz.

Chirichella will be tasked with continuing to grow the media company’s subscription business after the publisher released a metered paywall and invested in diversifying its revenue strategies, such as adding events and branded products.

“This is an important moment in our culture and in our industry, and I am honored to lead our remarkable teams at this time of transformation,” Chirichella said.

Her promotion comes as the company looks to move beyond allegations levied against former president Troy Young, who resigned in July. Former staffers accused Young of inappropriate workplace behavior.

Young’s fall from the top came after he was widely praised for his efforts to digitally transform the 133-year-old publisher of magazines including Cosmopolitan, Elle, Esquire, Good Housekeeping, Marie Claire, Car & Driver and Road & Track. In fact, Adweek named Young its Magazine Executive of the Year in 2015.

Chirichella is already leaving her mark. In September, she announced the launch of Premium Print, an initiative that includes a multimillion-dollar investment to enhance quality across its 25 publications. This includes using better paper and adding up to 10% more editorial pages for some brands and larger trim sizes for others.

The deal, valued at $235 million, means Spotify can offer its proprietary Streaming Ad Insertion (SAI) to third-party podcast publishers for the first time.

“We are still in the early chapters of the streaming audio industry story, but it is absolutely clear that the potential is significant,” said Dawn Ostroff, chief content and advertising business officer at Spotify, in a statement.

Spotify is making even more aggressive moves into the podcast space after making a splash last year with its acquisition of podcast monetization platform Anchor, production studio Gimlet Media (behind podcasts like Homecoming and ReplyAll), podcast network Parcast and media company The Ringer.

Earlier this year, Spotify introduced SAI for advertisers across its in-house podcasts that attracted brands like Harry’s and HelloFresh. Releasing the technology to monetize these podcasts is a route competitors have taken as well; iHeart Media introduced its own suite of tools to entice buyers, called iHeartPodcast AdSuite, a month after Spotify released SAI.

Spotify has continued to expand its foothold in podcasting with a $100 million partnership with Joe Rogan to stream his podcast and reaching deals with Kim Kardashian West and Michelle Obama.

“We are incredibly excited to join Spotify to help advance the podcast medium for publishers and advertisers alike,” said Brendan Monaghan, CEO of Megaphone, in a statement. “We believe that Megaphone and Spotify’s shared value in innovation will drive the podcast ecosystem forward around the world.”

Unsurprisingly, publisher website traffic and cable viewership has been eye-popping this week. The Guardian recorded its highest-ever digital traffic on Nov. 4 reaching more than 190 million page views and 52.9 million unique browsers globally in 24 hours. CNN Digital also broke records that day, as 116 million unique visitors logged on to the site. The Washington Post had its “highest number of pageviews in history by over 40%.”

For The Washington Post, that traffic led to a “surge” in subscribers. It was all the result of years of assiduously building a framework to grow and retain its subscriber base, said chief marketing officer Miki King. Bloomberg Media has also seen subscriber gains this past week. On the local news front, digital subscriptions for The Philadelphia Inquirer rose 83%.

“The Trump Bump” refers to spike in news interest at the beginning of the president’s term. These spikes in web traffic and viewership tended to be triggered by the latest presidential controversy, no matter or trivial. Some publishers claim the Trump Bump was ephemeral. But for most, the breathless coverage of the president has served as an addictive shot in the arm for publishers’ digital businesses. As of this writing, it appears the expected end of the Trump era is upon us. And publishers feel in danger of that extreme reader interest deflating.

Pushing readers beyond politics

The New York Times now has 7 million subscribers. For the first time, the company is generating more revenue from digital subscribers than print (which is a statement about the macro downward trend of print subscriptions). The Times is not reliant on any single story or topic to drive its growth, said CEO Meredith Kopit Levien. “In fact, the breadth of our core news report is both a differentiator and a driver of our business,” she said on its third-quarter earnings call this week.

Each additional topic someone engages with on The Times increases their likelihood of subscribing by 50%, the publisher said. And it’s not just politics that people are reading: Around 80% of readers go beyond politics to read other subjects each week. The popular Games and Cooking properties have 1.4 million subscribers combined. The Times will also continue investing in ancillary revenue lines like affiliate sites such as Wirecutter. It is also banking on audio, as the company was buoyed by its acquisition of subscription audio app Audm in March this year. 

Nonetheless, investors anticipate a slump in subscription growth under a Biden administration. 

“If [Trump] is no longer President, this bump will fade,” said independent media analyst Alex DeGroote. “The post-Trump world may feel very boring, and this may impact news consumption.” 

Without an antagonist, those titles who have set themselves up in opposition to the president may lose subscribers who paid as a political act of support. Not having Trump in office could have implications on a media organization like CNN’s identity and purpose; it’s all about that “symbiotic relationship.”   

However, Trump and interest in his pronouncements are unlikely to disappear. It’s possible that Twitter might crack down more on his more salty tweets. Media outlets then face another existential dilemma on how much oxygen to give Trump’s words.

Deals can be dangerous

In the US over the last few months, the election frenzy has protected post-pandemic traffic fatigue, said James Henderson, CEO of Zephr which helps publishers drive subscribers. Traffic, and so subscriber bumps, will plateau in the next few months. 

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In all, total ad spend nationally will near $14 billion, according to a recent S&P Analysis of dollars spent this election cycle, with TV stations absorbing a significant portion. In June 2019, Kantar predicted this election would attract $6 billion across mediums in political ad dollars.

The record-breaking political ad spend was fueled by the contentious presidential race between President Donald Trump and former Vice President Joe Biden, according to the analysis, but also got a boost from high-profile House and Senate campaigns.

“Record fundraising means record advertising,” said Steve Passwaiter, vice president and general manager of Kantar’s Campaign Media Analysis Group. “An enormous amount of passion in this year’s cycle brought out donors like never before.”

In the lead-up to Election Day, some networks notched record-breaking ratings surrounding political coverage, largely seen as an opportunity for the linear networks even as audiences have shifted their viewing to streaming services.

The S&P analysis did not provide an exact breakdown per medium, but both presidential campaigns spent over 40% of their budgets on broadcast TV advertising. Elsewhere, dollars also flowed to digital channels, radio and OOH advertising. Online ad platforms, including Google and Facebook, released new rules concerning political advertising this year, refusing to accept new election-related ads a week before Nov. 3.

The top three markets that saw the most political advertising were in areas that proved crucial to the presidential election: Phoenix, Arizona (where companies like the Meredith Corporation, Tegna, Fox Television Stations and E.W. Scripps have holdings) and two Florida markets, Orlando-Daytona Beach-Melbourne (Hearst Television, Graham Media Group, Fox and L4 Media Group) and Tampa-St. Petersburg (Nexstar Media Group, Tegna and Fox).

“Everybody in media is going to crow about how well they did in political ads this year, and that’s a good salve for the industry seeing what’s happened with ads in general,” Passwaiter said.

Indeed, those public TV companies have already noted the success they saw in political advertising in their most recent quarterly earnings.

Scripps’ 2020 local media political advertising totaled about $265 million through Election Day, beating its projections earlier this year of $196 million. Of those dollars, 50% came from political action committees and another 16% from presidential candidates, according to the company’s quarterly earnings, announced this morning.

“Despite the lingering economic disruption, Scripps achieved record political advertising revenue,” Scripps president and CEO Adam Symson said.

Meredith, too, saw benefits from political ad dollars. “We are off to an encouraging start to fiscal 2021, with 15% growth in national digital advertising to a record high, and a 43% increase in local political spot advertising from the prior cycle two years ago,” said Meredith president and CEO Tom Harty. In all, first quarter revenue for the company totaled $694 million, thanks to growth in political advertising.

Fox, which owns 17 stations, including in 9 of the top 10 markets, said it attracted $969 million in advertising in its most recent quarter. Without saying precisely how much of that was political advertising, executive chairman and CEO Lachlan Murdoch said political advertising at local TV stations “will have achieved a record for any election.”

The offering is called Washington Post Signal. It’s powered by the Post’s contextual targeting platform, Zeus Insights, which the company created in July 2019. The promise of Signal is more sophisticated ad targeting for buyers who aren’t reliant on third-party cookies. The added layer of first-party reader data is also meant to differentiate the capability from the basic parameters of contextual ad targeting. 

Advertisers, like launch partner Bank of America, can access Signal via its own dashboard. The tool monitors hundreds of consumption data cues, such as identifying where the reader came from. The program can also pick out the topic or article entry point (often a clear “signal” of intent) a reader first engaged with. In addition to highlighting all the articles a reader viewed, Signal gathers audience demographics, specific ad engagement and most frequently read topics.

All those data points are ultimately connected to nearly 2,000 of Zeus Insights’ contextual taxonomies on how it categorizes its content, such as topics like fashion or innovation. 

For instance, a brand running an ad unit featuring a Post editorial, such as the ones that appear under its PostPulse unit, can swap out articles quickly based on consumption data. Signal’s analytics can include whether the reader is more active on Tuesdays, or arrived from Facebook, whether they are politically engaged or interact more with video ads rather than slideshows. 

Signal’s launch represents the Post’s desire to act as a deeper partner with brands. As evidence, the Post notes that Signal audience data profiles can be used outside the publisher’s ecosystem. Still, Signal is a tactic to drive more publishers to join Zeus Insights and integrate with its Arc technology platform, which the Post licenses to publishers for a fee. To attract those outside content companies, the Post says Signal can expand publishers’ abilities to compete with the scale and targeting of platforms like Facebook and Google.       

“There are obvious challenges today, but we think about what will happen tomorrow,” said Jarrod Dicker, vp of innovation and commercial strategy. “[Signal] is built to be universal. We think about how we can enable the open web and premium publishers who have their own strategy. We think about how we can strengthen our products so it can be on [publishers’] owned and operated platforms. We can affect all that through product.”

The pendulum swings to context

Contextual targeting has been heralded as a replacement to third-party cookie based audience targeting, the engine powering digital advertising over the last decade. But basic contextual targeting—soccer ads on a sports site—won’t cut it. Publishers like The New York Times and Insider are making contextual tools smarter.

There’s a chunk of change at stake. The global contextual ad market is set to top $447.9 billion by 2027, according to a July report by market research Global Industry Analysts. It was the fourth most effective programmatic ad targeting tactic in a June study by content marketing research firm Ascend2, with 26% of marketers claiming its effectiveness (still, 73% named audience targeting as most effective).

Growth in contextual targeting is primarily being driven by marketers’ knowledge that cookies are going away, said Joe Root, co-founder of publisher data targeting platform Permutive. Complementing that, publishers like Hearst and Immediate Media are stringing together contextual and user action or consumption data to better understand and access audience insights. “That used to sit in the hands of the ad ecosystem tech vendors; now it’s in the hands of the publishers. That’s the real shift we’re seeing,” said Root.

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