Month: December 2019

While this is a new selling approach for BuzzFeed, the model is reminiscent of how display campaigns were often sold in the internet’s earlier days, when ad buyers often worked with publishers’ salespeople to purchase a share of voice against specific types of content. The twist now is that BuzzFeed is creating new content specifically to meet buyers’ demands.

Ironically, BuzzFeed says the offering has resonated most with agencies’ “programmatic” buying teams so far, despite the fact these campaigns are not actually transacted programmatically. With the slow demise of the cookie and growing privacy regulation, marketers are increasingly looking for new ways to find and target ads to specific audiences. Contextually targeted advertising is enjoying a comeback, as a result, and it’s this wave of interest that BuzzFeed is attempting to ride.

“BuzzFeed really has built its brands on creating content so when we decided to do display through programmatic, we did the basics. Now, we’re looking to translate native through programmatic and to use SponCon to bridge the worlds between the two,” said Michele DeVine, senior director of programmatic partnerships. “For the first time, programmatic buyers have direct access to the editorial team.”

While all of BuzzFeed’s sales teams can offer SponCon, DeVine’s programmatic sales team has sold around a half-dozen campaigns. To date, SponCon has been sold to both existing programmatic advertising partners and buyers interested in branded content campaigns, offering them a simpler and cheaper alternative to larger, high-touch media packages.

“It’s a little antithetical to the idea of programmatic,” said Miles Pretlove, digital strategist of programmatic media buying agency eEffective. “This is a more direct, custom buy.”

But because programmatic has grown to be a leading revenue source for both media companies and the agencies that purchase from them, Pretlove said it stands to reason that BuzzFeed might try to connect the dots. “It makes sense that in-house programmatic teams are more ingrained in the strategy-based content alignment conversations,” he said.

BuzzFeed first integrated programmatic into its advertising business in 2017 and since then has looked for ways to bring together its direct sales team and its programmatic sales team, including opening its programmatic inventory to its entire sales staff in 2018. It first began offering SponCon to select partners in the fall of 2018, but the service launched officially this summer.

The baseline product for SponCon is five posts revolving around the topics that the advertiser specifies, with six weeks of 100% share of voice ownership. Pricing for this product is tier-based, similar to its branded content pricing, with variations on number of posts or duration of ownership, according to DeVine.

“Branded content is a heavy lift. It takes a lot of time to create the product,” said DeVine. “This is a lighter touch to create.”

You’ve been having trouble running ads on Facebook. Tell us about that.
I’ve been running ads for seven or eight years. I’ve run ads for fashion companies, my own companies and spent multiple millions of dollars on Facebook ads. This year, I got disabled. I wasn’t running ads at the time. I thought it was done in error. I submitted an appeal and got an instant response that it was final. The next day, I got an alert that not only was that account disabled but I’d lost access to all advertising tools. It’s been a while since that happened. It’s a bummer, considering I make my living through running Facebook ads for other people and/or managing some of our ads for our company.

What have you done to try and fix the issue?
I have some friends at Facebook that I’ve reached out to and asked about it, but that hasn’t been much help. Other than that, I don’t feel like I’ve gotten a human reply. Their live chat is kind of a joke. It’s just a person who responds back to you and links you to their support forms. They don’t have access to do anything on behalf of you. They can just tell you where to find information. If you already have the links, it’s a dead end. Also, when you’re disabled, you’re not able to submit appeals anymore.

You said Facebook support isn’t helpful. Can you elaborate?
Their support team doesn’t talk to salespeople which doesn’t talk to the policy and compliance teams. All of that makes Facebook’s support a black box and a shit show. If you have an ad rep and you’re spending enough money, it doesn’t matter. You can send a text and all of a sudden you have your stuff fixed and it’s restored within five minutes. If you’re not spending hundreds of thousands of dollars a month [you don’t get that kind of response]. Also, during this whole process, I’m still getting calls from Facebook marketing experts like, “Hey, Q4 is around the corner. It would be really nice to increase your budgets.” I’m like, “This is the third time you’ve called me in seven days and I haven’t had ad access. I would love to spend some money, but I can’t.” They still call me, and I also get automated emails from Facebook for an advertising account that’s disabled and linked to a profile that’s unable to use advertising tools.

What would you like them to do?
All I’m trying to do is get in touch with a human to understand why I was disabled in the first place. I believe it was in error, but if I did something I’d like to know what I did so I can not do that again. But if this is a final decision, maybe the internal team should share that so their products aren’t sending automated emails or suggesting people who are banned or disable to try new things. They should talk to each other, but none of them do. Facebook support is like going to the DMV.

This is a problem specific to your account. Have you heard of other people dealing with similar situations?
I know it’s not just me. There are Facebook ad buyer groups and media buyer groups where people are also confused about if they’ve gotten banned in error, if it’s automated or if it’s scrutiny in the media or if they’re trying to tighten the grip. And I follow a lot of the media buyers on Twitter, and they have similar issues. I don’t have a lot of faith in getting my account back. I don’t know what the next steps are. Do I get a new IP address? New credit card? New legal entity? New Facebook profile? All just to run Facebook ads. If there’s any relationship to the future account, entity, Facebook address could be instantly revoked if the account is somehow connected with your old one. That’s what one of the reps from Facebook suggested to me: “In the meantime, if you want to spend money for Q4, I would suggest making a new profile.” You work at Facebook, and you’re suggesting that I make a new profile?

Do you think it’s scalable for them to have more human contact?
It’s hard to scale it, for sure. At the same time, if it’s hard scale [how do you have] marketing reps calling people five times in a row while they’re banned? Obviously they can scale trying to get me to spend money. I can’t spend money. I would’ve already been spending money on the first call. You’ve wasted their time and mine. Equip the marketing experts, the people who are doing the outreach with the same level of elevated access or permissions as someone on the policy team. Or have them looped in immediately [on the shutdown of an account] so they’re not wasting their time.

With all of the trouble you’re having on Facebook, have you considered other channels? 
We have, but Facebook has been the best way to target people and the best solution. It’s where we’ve spent the majority of our marketing budget over the last year, about 85%. Twitter doesn’t really have the optimization tools or the targeting tools. At least, they aren’t as sophisticated. Every time we’ve tried there, it’s just been a massive waste. Within Google, we tried recently and the CPC was just so high. It’s like $30 a click, whereas we’re paying $2 or $3 a click, for example, on Facebook. It’s just not feasible.

Publishers use email in various ways to drive people to sign up for subscriptions — either with marketing via offers sent to those already in their database, or sending more email about specific parts of the subscription product, like dedicated member-exclusive pieces, to their audiences.

However, only 23% of respondents said sharing email lists has proved an effective tactic for them.

When Digiday last conducted this research, 65% of publisher executives said their most effective tactic for customer acquisition is email, and 16% said it was house ads.

Subscriptions are the most important focus for publishing execs. Almost 46% of respondents said growing subscriptions were a major focus for them over the next six months. Other major priorities are building direct-sold ads: 64% of publishers said that was either a large focus or a very large focus area for them.

Those extras are part of a longer list of revenue diversification plays Stat has made. Earlier this year the publisher created a full-length documentary that it is entering into film festivals. It also launched its first ticketed event, the Stat Health Summit, which filled out its 250-capacity room. Stat already has two other ticketed events planned for next year.

While each of these should contribute modestly to revenue next year individually, Stat’s chief revenue officer, Angus Macaulay, expects them to account for a meaningful amount of revenue collectively. In 2020, Stat’s “other revenues,” which includes branded content in addition to the above, should deliver 10% of Stat’s revenues, Macaulay said. Subscriptions currently account for nearly half of all Stat’s revenue, delivering 49% of revenue in 2018, Macaulay said.

Stat launched Stat Plus in December 2016, barely a year into the publication’s existence, with the goal of amassing 10,000 subscribers in three years. Stat hit that target in the first quarter of 2019, thanks to 81% growth in subscribers between 2018 and 2019. Since launching Stat Plus, Stat has also raised the price, moving annual subscriptions from $299 per year to $349 and monthly ones from $29 to $35.

A significant chunk of that growth has been powered by group subscriptions, which Stat sells as yearly contracts. Groups accounted for 20% of Stat’s subscriptions in 2019, and Stat expects its group subscriber base to grow 67% in 2020, Macaulay said.

Overall, group and individual yearlong subscriptions account for 70% of Stat Plus’s subscriber base. But Stat’s subscriptions team has also been experimenting with selling “team” subscriptions, which are available for groups of up to three people.

“We will hit a point where the corporate subscriptions will affect the growth rate of individuals,” Macaulay said. “But there’s still plenty of runway.”

The consumption data and feedback Stat’s gotten from subscribers has helped inform its diversification strategy. Next year, Macaulay said Stat’s small subscriptions and product team will figure out how to engage them even more effectively, giving subscribers a more personalized experience when they visit the site.

“I think publishers are sitting on a gold mine, which is their first-party data,” said Rob Ristagno, the CEO of the consultancy Sterling Woods Group. “If you talk to them and get feedback, you’re answering the important question of why they’re doing what they’re doing.”

Being able to serve a paying audience over the course of a year gives a publication time to demonstrate the value of a subscription over and over again. But the goal with each of these incremental projects is to ensure they are valuable in and of themselves. “We wanted to make sure that, for the first go-round, people came away saying, ‘That was worth my time,’” Macaulay said of Stat’s first health summit.

The terms of the deal were not announced, but SEC filings indicate that earlier this month Quantalytics sold $3.9 million worth of equity to four unnamed parties. The same filings indicate that Forbes Media’s chief financial officer, Michael York, and Forbes Media’s mergers and acquisitions lead, Taha Ahmed, were named as directors of Quantalytics. Two years earlier, Quantalytics had sold equity in its company for $2.65 million.

The acquisition, Forbes’ first since acquiring The Memo in 2018, is part of a recent focus on diversifying its revenue streams. Over the past five years, the percentage of annual revenue Forbes earns from non-advertising sources has doubled, from 18% in 2014 to more than one-third in 2019, a source close to the company said.

Much of that growth has been powered by Forbes’ events business and revenue generated from licensing, the source close to the company said. But more recently, Forbes has expanded into other areas.

It has experimented with bringing established offerings to market in new ways. In 2019, the company began offering its branded content platform — which includes both a studio as well as a distribution system — to advertisers in a software-as-a-service format, giving customers unlimited publication and distribution.

Forbes also has plans to further diversify revenue through franchises such as “30 Under 30,” which it is hoping to build into a kind of paid membership product.

The Quantalytics offering represents another avenue. Over the next year, Forbes will begin figuring out how to offer Quantalytics insights and information to its reporters, who will be free to use the information as they see fit. Forbes’ newsroom will have no obligation to incorporate the Quantalytics information into its output, said Matt Schifrin, Forbes’ vp and managing editor, but the expectation is that the data should present natural opportunities to offer more useful information to Forbes readers.

“I look at revenue diversification as the development of any non-advertising revenue, with advertising being the core product,” Forbes Media CEO Mike Federle said. “This, I look at a little differently. It will allow us to create new products that will create new revenue streams, but I look at it more as an application of technology on what has been one our core competencies, which is around investing.”

Forbes has been exploring ways to incorporate artificial intelligence into its product and operations. At the beginning of this year, a number of artificial intelligence features were added to its content management system, including an AI that recommends article topics to Forbes contributors.

“It’s exactly the kind of use of artificial intelligence that makes sense in a newsroom,” said John Wilpers, a senior director at Innovation Media Consulting. “Five years ago, 10 years ago, you would have had trouble convincing reporters to use it, what everybody saw AI as a threat to their jobs.

But now I think that it won’t be a struggle at all to convince the reporters to use this, because it will free them up to do the kinds of things only they can do.”

Eventually, Forbes will rebrand and repackage Quantalytics as a standalone subscription product, though the final product may look different. An earlier version of Quantalytics cost $100 for three months. It is not clear how much traction the company had. Mathai-Davis declined to answer questions about how many customers the business had amassed before Forbes acquired it.

The deal is the latest in a string of mergers and acquisitions. Last year, the owner of The Mirror newspaper group, now known as Reach, acquired the Daily Express and Daily Star newspapers from Northern & Shell. A big question still lingers over the future of the Daily Telegraph owner Telegraph Media Group, which is also reportedly up for sale and could fetch a price of up to £300 million ($388 million), according to analysts at Liberum Capital. DMGT is among the interested parties, according to reports. And elsewhere, regional newspaper owner Newsquest is reportedly the frontrunner to snap up JPI Media’s local titles.

“We’ve moved to a world where partnerships with the biggest media owners are adding huge value to clients, with the need to be across all channels and have the greatest impact with brilliant creative executions,” said David Counsell, trading director at U.K. media agency the7stars. “Having a handful of publishing groups in control of those exciting opportunities means that it’s far more competitive for those bigger budgets, as the risk of losing out to competitors is much more painful.”

Back in 2010, the i marked the first national daily newspaper launch in the U.K. in 25 years. It began life as a sister paper to The Independent (which has since gone online-only), offering quick-hit content at a relatively low price point, an eye-catching design and no clear political allegiance in its editorial. The i newspaper and inews.co.uk were sold in 2016 for £24 million ($30.9 million) to regional press owner Johnston Press, which became known as JPIMedia last year after a consortium of hedge funds took control of the company.

The i will immediately add cash to DMGT’s balance sheet. The i generated £34 million in revenue ($44 million) and £11 million ($14.2 million) in profit last year, according to DMGT. Around three-quarters of the i’s revenue is derived from newspaper sales, while the rest is generated through advertising in print and online, according to DMGT. The i’s new owner said there will be “opportunities for synergies” with the wider group — in back-office, production and ad sales functions, for example — but insisted the i will remain editorially independent from its other titles.

The obvious immediate benefit of the deal to media buyers is the ability to reach larger and differentiated audiences across several titles via one buying point.

The i sells around 170,000 papers each weekday and 190,000 copies on Saturdays, while the website garners around 300,000 daily unique browsers per day, DMGT said. Meanwhile, the Daily Mail had a total average circulation figure of 1.1 million in October, down 7% year over year, according to the latest Audit Bureau of Circulation figures.

The audiences, however, are different, with the i newspaper generally attracting a much younger reader than that of the Mail, which leans right politically. DMGT attracted 37.5 million U.K. monthly visitors across its websites, including MailOnline and Metro.co.uk, in October, according to Comscore data

For now, the i will be ringfenced as a separate operation in the expectation that U.K. competition regulator the Competition and Markets Authority will look to review the acquisition. In an email to media buyers seen by Digiday, i commercial director Andrew Webb told partners that process could take around six months but that “business will very much continue as usual.”

Ad buyers praised the i’s ability to maintain a profitable operation with a lean team: The i newspaper’s current headcount is only around 80 people in total. Buyers also credited its small but senior sales team for proactively maintaining strong relationships in a competitive market.

Looking ahead, a potential DMGT/Telegraph/i combination would present a much more formidable rival to he largest U.K. newspaper group News Corp’s News U.K. — which owns The Sun and The Times newspapers. Both competitors would then have broadly similar newspaper revenues of around £900 million, according to Colin Morrison, an independent media consultant.

“News U.K.’s The Sun now claims a larger digital audience in the U.K. than Mail Online. But DMGT (plus the Telegraph and i) would actually have a gross audience of some 4 million per publication day — almost twice that of News U.K.,” Morrison wrote in his Flashes & Flames newsletter on Friday.

Not everyone is a cheerleader for newspaper market consolidation — particularly from an editorial and political standpoint. U.K. Labour Party leader Jeremy Corbyn tweeted Friday in response to the i newspaper acquisition, “Two billionaire press barons now own half of the top 10 daily newspapers. Remember this when they attack Labour’s plan to make the super-rich pay their fair share.”

Still, in a market where advertising spend on national news brands is expected to drop 2.3% in 2019, according to the Advertising Association and market research company Warc, observers said consolidation is a necessity.

“I think these acquisitions are needed. There needs to be some consolidation in the market, partly to take some costs out to help the newspapers survive,” said Steve Goodman, former managing director of print trading at GroupM and co-founder of recently launched media agency The Press Business.

On the flip side, the deal shows there is still a market for profitable newspapers.

“It shows people still want to invest in the news product. I newspaper having a group like [DMGT] behind them is a long-term investment and protects the i in the long run,” said David Mulrenan, head of investment at media agency Zenith U.K.