This week’s media briefing explores the evolving relationship between publishers and advertisers as the pressure mounts to justify marketing budgets with actual proof of driving revenue.
The key hits:
- For some publishers, the time between receiving an RFP and executing a campaign has drastically shrunk at the request of eager advertisers.
- The sales cycle for BDG has decreased by almost half, going from an average of 50-60 days to about 30 days.
- Blavity Inc. has experienced agencies fighting back for more KPIs post-campaign, delaying the start of payment windows by days or even weeks.
- To accommodate higher demand in their advertising businesses, hiring more pre- and post-sales roles has become a necessity.
In times of economic turmoil, like the current period that emerged this summer, advertisers have to balance smaller marketing budgets while still proving those campaigns’ efficacy. As a result, publishers are reporting that their clients have more demanding expectations with tighter timelines and stricter results they need to deliver.
BDG is pacing to be up 35% year over year in total revenue this year, after being up 31% in the first half of 2022, according to the company’s CRO and president Jason Wagenheim, and this is partially because the average deal size in its advertising revenue is up 15-20% year-over-year.
Despite wanting more, however, advertisers want to see the campaigns go live sooner, he said.
BDG’s average sale cycle – meaning the time between receiving a proposal request from an advertiser to signing a contract – has decreased from about 60 days to between 30 and 35 days, said Wagenheim. And then once a deal has closed, there is a shorter window allotted to BDG’s post-sale team to execute the campaign. Earlier in the year, campaigns went live an average of 12-16 weeks after signing a contract, but now, it’s closer to six to eight weeks, “if we’re lucky,” he said.
The Independent is experiencing a similar trend of clients wanting to execute faster and part of the reason is because they’re skipping the request for information (RFI) stage and skipping right to the request for proposal (RFP), meaning advertisers aren’t taking their time weighing other options nearly as much.
“We’re seeing a lot less RFIs and a lot more firmer RFP requests that can move quickly,” said Blair Tapper, The Independent’s svp of U.S.
Tapper declined to share the average length of the company’s sales cycle, but said fulfilling a campaign in six to eight weeks has become standard practice. This is preferred, however, she said, because, “truthfully, a 16-week RFP cycle is really hard on everybody. It drags on. So for us, the shorter the cycle, the better.”
A short sales cycle does not necessarily mean a swift and painless post-sale, or even post-campaign period, however.
Blavity Inc has added more than 50 new advertisers to its client roster this year, increasing its ad revenue by 56% in the first half of 2022, but as the year has progressed, delivering on some clients’ key performance indicators (KPIs), like total impressions, has gotten difficult, if not impossible.
This is not because of condensed timelines, however. The company’s founder and CEO Morgan DeBaun said her team is used to receiving an RFP and executing the campaign within a matter of days, especially for clients looking for display ads.
“Agencies are being held to higher standards by their clients, [but] then it’s actually impossible what they’re promising, and therefore we have to over-deliver to [meet the baseline requirements],” said DeBaun. “Agencies take a long time to pay us and spend a lot of time fighting us on every impression.”
It’s not just that campaigns need to achieve more impressions, but they need to meet the right type of impressions that adhere to agencies’ viewability requirements, frequency caps and brand safety standards.
“Advertisers are absolutely asking for more KPIs to measure success. This is particularly true of advertisers who are leveraging [publishers’] first-party data,” said Seth Hargrave, CEO of media buying agency MediaTwo Interactive, adding that he has seen this trend of asking for more rigorous standards among clients increase over the past several months.
And with campaigns designed to increase brand awareness and product consideration, like video and connected TV, Hargrave’s clients are asking for more “path analysis” data, which measures the customer journey and is meant to connect the dots of a brand awareness campaign to their impacts on the company’s bottom line, he said.
Hiring to help with the demand
To handle the influx of campaigns and the tight timelines, all three publishers have hired staffers to handle the pre- and post-sale funnel, meaning those tasked with securing deals with advertisers and then those tasked with executing the deals once the contracts are signed.
“The biggest functions that we’re hiring for are around events, account management, sales planning – the people that are actually executing deals for us in post-sale. [Those] are the places where a lot of the investment is going right now,” said Wagenheim. “Our post sale team, [specifically] our account management team, has probably grown by 30 to 40% compared to last year.”
For The Independent, project managers have been crucial to handle the demand of clients.
“We are in growth mode. A lot of our hires have fused with some of this increased demand, but the idea of [increasing the] project management [and] marketing [teams] and letting sellers be sellers is absolutely 150% critical,” said Tapper.
Meanwhile, Blavity Inc has seen more of an influx of display-driven campaigns, which are substantially easier to execute, but leave the post-sale team of creatives and marketers with fewer assignments, DeBaun said. Blavity Inc has therefore needed to double the size of its pre-sales team, which includes sellers and media planners, to five full-time staffers.
What we’ve heard
“While we’ve driven a lot of page views, we’re not driving as many conversions as we forecasted. There are barriers to getting consumers [in] the mindset that our sites are a place you can actually transact.”
— Jason Wagenheim, CRO and president of BDG on how its commerce business has performed in the two years since launch.
At the Digiday Publishing Summit held in person in Key Biscayne, Fla. next week, media executives will gather to discuss how they have adapted their business models to brace against the current economic downturn, from building up their first-party data sets to developing NFT businesses and creating new editorial products.
Here’s a sample of the topics likely to dominate town hall discussions. — Sara Guaglione
Building on the blockchain
Publishers are looking to emerging technology to develop new revenue streams, including experimenting on the blockchain. Time is probably one of the most active media companies developing and selling NFTs, and the company’s president Keith Grossman will explain at the summit how the publisher’s Web 3.0 business brought in over $10 million in a year. Alanna Roazzi-Laforet, CRO at crypto news publisher Decrypt, will also discuss how their branded content studio is using blockchain tech.
Developing first-party data to prepare for the post-cookie era
Despite Google continuing to push back the deprecation of the third-party cookie, many publishers are developing their own first-party data suites to prepare for the inevitable. At the summit, Salon CRO Justin Wohl will discuss the cookie alternatives the publisher is adopting around its programmatic business, the potential of seller-defined audiences and the importance of first-party data. Blavity Inc’s founder and CEO Morgan DeBaun will also share how the media company built out its ad network and adjusted its programmatic business during these challenging times.
Keeping up with commerce
Many publishers’ second-quarter earnings reports pointed to a slowdown in commerce revenue year-over-year and placed the blame on a softening of consumer demand post-pandemic. Next week, Eric Karp, svp of brand licensing at Vox Media, and Michelle Myers, Wright’s Media CRO, will discuss the role licensing can have on driving publishers’ affiliate revenue and increase traffic. And during a live recording of the Digiday Podcast, Sheel Shah, svp of consumer products and partnerships of Hearst Magazines, will share insights on the company’s commerce business.
Reaching audiences through inboxes and headphones
Publishers have increasingly turned to new audio and email products as a way to reach audiences, drive them back to their sites, develop first-party data and create more opportunities for advertising. At the summit, Jessie Katz, vp of audio programming and podcasting for A+E Networks, will reveal how the network is using its podcast slate to cross-promote its content and push audiences from audio to TV and vice versa. And Adam White, CEO of Front Office Sports, will share how the company is focusing on brand-lift studies to show advertisers how newsletter ads can impact their businesses.
Numbers to know
3: The number of years in which The New York Times hopes it can make The Athletic, its subscription-only sports site, profitable by adding advertising into the mix.
69%: The percentage of publisher execs who haven’t worked in an office full-time in the past year.
What we’ve covered
The season of change: Digiday’s editors recap summer 2022’s top trends in media:
- Heading into the fall, a lot of media execs are trying to strategize for a business environment that doesn’t reflect how it used to look even six months ago.
- On the latest episode of the Digiday Podcast, my co-host Tim Peterson and I unpack the biggest takeaways from that time period as well as chatted through what this could mean for media companies’ fourth quarter and the start of 2023.
Listen to the episode here.
WTF are seller-defined audiences?
- The IAB Tech Lab’s seller-defined audiences specification is one of many digital ad industry efforts to replace the third-party cookie with purportedly privacy-friendly alternatives.
- It’s effectively a cohort-based targeting method packaged with a nutrition label for the corresponding ad targeting data.
Learn more about this third-party cookie-alternative here.
A few Gannett employees hold protest over recent layoffs:
- Last week, a few unionized Gannett employees stood outside Citi’s Global Technology Conference in New York City to get the attention of Gannett CEO Mike Reed.
- Ultimately, the protestors said they spoke with Reed and discussed the contract bargaining negotiations that have been going on since January, as well as the union’s main grievances with management’s handling of the company.
Read more about the protest here.
How high tuition costs and low salaries lead to painful student debt for some journalists:
- U.S. President Joe Biden’s initiative announced last month could provide a little relief, with the potential to wipe up to $20,000 in individuals’ federal student loan debt.
- However, the program won’t fix the underlying discrepancy between expensive journalism programs and low entry-level salaries, working journalists say.
Read more about the state of journalists’ debt here.
What we’re reading
Since going public with their labor organization efforts in March, Condé Nast employees have finally won unionization recognition, according to The Washington Post. Staffers have been asking for better pay as workloads have increased.
After a redesign, The Verge’s homepage now includes a feed of content that’s curated by its top editors and reporters, according to Axios.
After announcing almost 20 new editorial hires this week, the new media company born from media veterans Ben Smith and Justin Smith, Semafor, is almost ready for launch, according to Puck.