Month: June 2022

It is safe to assume that these percentages will continue to rise as an ad-enabled Netflix gets closer to becoming a reality. By the time the fourth quarter rolls around, it is likely agencies and brands will be clamoring for a piece of the Netflix ad pie. How the pie will be served and distributed remains to be seen. But there are many who will be eager to find out, and start writing checks, when the time comes.

Cut to the core

The key hits: 

• New York Magazine and The Cut dedicated a cover story last month to an abortion guide as part of a larger package on reproductive rights and women’s health.
• With some advertisers viewing abortion coverage as a brand safety issue, journalism dedicated to this topic could run the risk of not having financial support. 
• The Cut’s editor-in-chief Lindsay Peoples said service journalism for readers hasn’t led to any push back from the sales team or advertisers. 

Over the past couple of years, brands have become more outspoken in their marketing strategy, prioritizing brand awareness campaigns that are rooted in social impact, such as vocalizing their support of Black Lives Matter, sharing their sustainability efforts and speaking out against gun violence. 

But in the month since the leak of the Supreme Court document that challenged Roe v. Wade – the 1973 ruling that gave people in all 50 states the right to an abortion – it seems that advertisers are taking a more measured approach to messaging on this topic, or staying quiet altogether.

For publishers, this could become an issue in getting the financial support needed to cover pressing issues such as abortion rights, particularly with service journalism aimed at educating people about where and how they can access this health care. 

For New York Magazine and The Cut, however, the threat of brand safety did not keep their editorial teams from printing a 20-page cover story titled “This Magazine Can Help You Get An Abortion,” as well as a state-by-state online directory for abortion facilities, with a multi-channel social strategy to boot. Not only that, but the publisher removed the reader revenue component of the online package by taking down the paywall on all of the stories in the guide. 

Without the fear of demonetization holding her team back, The Cut’s editor-in-chief Lindsay Peoples said she spearheaded the magazine’s abortion guide in order to provide readers the service journalism they needed in this moment, and in doing so, did not meet any resistance from the sales team or the audience growth teams in the process. — Kayleigh Barber 

Below are highlights from the conversation, which have been lightly edited and condensed for clarity. 

Why was the abortion guide an important editorial package for you to work on? 

One of the things that I personally wanted to do in coming back to The Cut was to do a lot more collaborations between The Cut team and the New York Magazine team, specifically on issues that have to do with inclusivity, equity and equality. The issue that we did earlier this year on 10 years since Trayvon Martin’s murder was a good example of that. Back in December, we started to do a lot of brainstorms about different things that we wanted to [cover] this year and one of them was about how we can best serve our readers in the country without legal protections to abortion access. 

There [were] a lot of conversations around Roe v. Wade, and then, obviously things changed with the leak of the Supreme Court draft and, for us, it felt like something that New York Magazine had already been covering the changing landscape of abortion access. We published our first guide to where and how to find abortion services back in 1972, the year before Roe v. Wade made abortion legal in all 50 states, and so it felt like that guidance was still needed [today]. We wanted to make sure to continuously be where our readers need us and that’s the most important thing to me.

You mentioned that in December you identified abortion rights as being one of the topics that you wanted to focus on this year. Did you have an idea of when that package would have originally been published? Or did you already have some reporting in the works that allowed you to expedite publication of this guide?

We already had a lot of different things in the works and so then the timeline obviously got sped up as things happened in the real world. But it’s something that we constantly brainstorm around and meet in the moment, and leading that conversation in culture is always my goal as an editor. So it is a juxtaposition of having to be prepared and maybe be over-prepared on some things [in order] to be of service to our readers.

To your earlier point about access to abortion being an ongoing – and an ever-changing issue – are you treating this guide like an evergreen resource, given the fact that new bills and restrictions seem to be regularly introduced across the country that could drastically change the content of this guide? 

This is an evergreen resource so it’s something that we’re constantly talking about in the background. Our goal with this package is service journalism. We wanted this type of fearless usefulness to be part of our mission across the magazine and readers are the most important thing to me. What we do directly impacts their ability to live their lives and to have affordable, affirming health care and so, for me, it was 100% wanting to be a resource in that. 

As far as the abortion tool and any criticism around that, during the initial launch of the tool, errors were brought to our attention and we quickly resolved them. We knew that there were going to be a lot of changes in the world and we would constantly have to be updating it as well. We have our own internal team of journalists and fact-checkers and individuals from legal who will be working on this diligently to ensure that the tool is actually serving our readers. 

Outside of updating the directory tool or fact-checking information, are you going to be adding new content to this package beyond the initial publishing date? 

We’re waiting for the Supreme Court to issue a ruling, which could be late June or early July, but that is why we wanted to make this into a larger package. 

[The aborition guide] actually led into the State of the Uterus package [that debuted this week] and for us, it felt like there was this fear of devastating consequences for communities to be able to access basic health care and that feels more real by the day. But [the package] also has to do with reproductive health and people feeling like they actually have the tools and resources to get what they need and women’s right to health care that is affirming and affordable. We’ll continue to have a lot of information on where and how to find abortion services and resources to expand coverage on gynecological care, fertility and reproductive health, birth and a lot more as well.

There is a brand safety element of the debate around abortion rights, where some advertisers don’t want to be a part of the conversation. From a business standpoint, have you run into any kind of resistance from the sales team or from advertisers while creating this package?

No, [but] I think it’s not really surprising if you look at the track record of my work. I think people would often describe a lot of the things that I’ve been passionate about covering as polarizing, [but] I think of them as fundamental rights for people and so I think whether it is talking about inclusivity, or diversity, or abortion, or gun rights and violence, all of those things are topics that shouldn’t even be polarizing. These are things that we should be talking about more often, and they aren’t things to be afraid of. They are things that should be on the table for all of us to be discussing. 

We haven’t gotten any pushback because I think that people understand that these are things that we should be confronting, and these are things that we should be talking about in order to create change.

Was there a process of needing to alert the sales team at all that this package was coming up faster than it was originally anticipated?

No, they were aware that this is something that we were working on, and I have a really great relationship with our sales team so they knew that this was happening and honestly, it’s something that we were all really proud of. Everybody was on board that this was something that we felt like we needed to do. So they were totally fine with us moving it up.

From an audience perspective, how is your team getting this guide in front of women who are in the position of needing it based on the location they live in? New York City-based readers likely won’t have to face the restrictions or bans to abortions as drastically as someone living in the South or Midwest. What is the awareness strategy of making sure people in areas where their rights are in severe danger can discover this guide?

[We] wanted to eliminate the paywall to make sure that these resources will be available for people, no matter if they subscribed or not. We’ve done a big push to share it with our subscribers via email and [have published] a lot of organic social posts. But we’ll also be leveraging paid digital ads across Facebook, Instagram, etc. to amplify the package and the tool to people across the country who may not regularly engage with our content, or may think, “I haven’t subscribed, so I can’t access that,” because we definitely wanted to make it available for anyone. We’re also just exploring working with a few content creators to amplify the tool on their social platforms as well.

We are in the talking stages of figuring out how we can get this information to people who need it most or people who may not be familiar with the brand. We’ll be rolling a lot of [those distribution strategies] out over the course of this year because we’re waiting until a lot of the things happen over the summer, with this decision actually happening in June as well.

Pausing the paywall is not always an easy decision for publishers. Why did you feel it was necessary for this package and did you receive any pushback on that decision? 

I felt passionate about it for this specific instance. I’m really passionate about people feeling equity and equality, and that that is my goal in being an editor. That felt appropriate for this specific package and we’ll do it when it makes sense. Obviously, for this, it made sense as far as service journalism goes.

And no, [we didn’t get pushback]. I think everyone is really just happy that we’re doing important work that matters. I don’t want to create work that is just part of the noise, or created just for the sake of it. And I think it’s something that we’re all really proud to be there for people in this moment.

What we’ve heard

“Google is really intensifying its own shopping areas on its search engine as opposed to pushing up more [publisher-produced commerce] articles because they want more revenue.”

— Publishing executive

Recurrent Ventures buys its fourth military publisher

North Equity-owned Recurrent Ventures has acquired We Are The Mighty, a media company targeting the military community, according to the company. A Recurrent spokesperson declined to say how much the company is paying for We Are The Mighty.

We Are The Mighty will add to Recurrent’s group of three other military titles, including Task & Purpose, The War Zone and MilSpouseFest. In an emailed statement, Recurrent CEO Lance Johnson said WATM’s sales and content partnerships were attractive to the company. “The way this team celebrates service and produces thoughtful perspectives about our country’s military community is as inspiring as it is informative, and we’re proud to add that work to our portfolio,” he added.

We Are The Mighty runs its website, social channels, video and events businesses as well as a media agency that works with clients like Roku, World Wrestling Entertainment and Craftsman. The eight-year-old company has eight full-time employees and is led by military veterans. All of its staff will stay onboard.

Mark Harper, We Are The Mighty’s CEO and an Air Force veteran, will continue to oversee operations for the WATM team, within Recurrent’s auto and military vertical, which is led by gm Jason Lepore. WATM’s tentpole event “Military Influencer Conference” will remain under the purview of its founder, Army veteran Curtez Riggs, at Recurrent. 

Harper told Digiday a big reason the company was interested in selling to Recurrent was to be under the same owner as Task & Purpose and The War Zone. “It was very like-minded publishers that were joining the Recurrent portfolio and starting to build up a really amazing military audience segment,” he said.

Recurrent’s modus operandi of acquiring small, enthusiast media brands and centralizing non-edit resources while preserving editorial departments was another big draw for WATM. The acquisition “gives us access to a whole lot of shared services behind the scenes,” which will allow the team to focus on content creation and its work with advertisers, Harper said. He cited resources like SEO, operations, legal and engineering support.

Recurrent now owns 24 digital media brands, including Popular Science, Domino, JancisRobinson.com, Field & Stream and Donut Media. In March, Recurrent acquired interior design and furniture Business of Home, its first B2B title to join the portfolio. 

Last month, Recurrent Ventures announced $300 million in new funding led by Blackstone Tactical Opportunities, bringing its total amount raised to more than $400 million. — Sara Guaglione

Numbers to know

£4.2 million ($5.3 million): How much audio revenue 12 publishers generated in the first quarter of 2022, a 500% increase year over year.

5%: Percentage share of NPR employees who leave the company each year, up from 2% in the past.

What we’ve covered

How Front Office Sports is leveling up its branded content business through educational courses:

• Front Office Sports expects to generate at least $10 million in revenue this year, CEO Adam White said in the latest Digiday Podcast episode.
• The sports business publication relies on advertising for 99% of its revenue.

Listen to the latest Digiday Podcast episode here.

Why eFuse is acquiring esports media business Esports.GG:

• The esports tournament and infrastructure platform has acquired a media outlet to roll into its existing editorial operation.
• Esports.GG launched in February 2021.

Read more about eFuse’s acquisition here.

Platform stocks swing, hiring in flux, purchasing personalized tech and more:

• Digiday has started publishing a weekly rundown of company deals and executive hires.
• The first edition touches on Twitter-Musk, Taboola-Gravity R&D and SiriusXM-Team Coco.

Read more about the latest deals and hires here.

Bloomberg Media will debut five new podcasts with iHeartMedia this year:

• iHeartMedia will market and distribute the shows for Bloomberg.
• Both Bloomberg and iHeart will sell the shows’ ad inventory.

Read more about Bloomberg’s podcast slate here.

What we’re reading

Forbes’ SPAC IPO falls apart:
The special purpose acquisition company that Forbes had set to merge with in order to go public – Magnum Opus – missed its May 31 deadline to file the paperwork necessary to complete the merger, according to Axios. As of this writing, Magnum Opus had still yet to file for an extension with the U.S.’s Securities and Exchange Commission, and following Axios’ report, The New York Times reported that Forbes canceled its plan to go public.

Substack scuttles funding round:
Newsletter platform Substack had been looking to raise up to $100 million in funding but has decided not to go forward with the raise, yet another sign that the media investment wave has ebbed, according to The New York Times.

Google’s latest antitrust investigation:
The U.K.’s Competition and Markets Authority – which is overseeing Google’s third-party cookie-replacing Privacy Sandbox program – is investigating whether Google has used its ad tech dominance to bolster its own ad tech products over competitors, according to Bloomberg.

“Media placements aren’t adequate for public relations to be seen as of high value anymore,” Milan Mobley, CEO of Umanagement Strategic Communications and Public Relations Agency in Atlanta, said in an email. “We honestly are the first to be chopped from the budget.”

Last year, Mobley said Umanagement drummed up 75 million digital impressions for a client during a campaign only to be dropped shortly after. “Their focus was going viral on TikTok,” she added. She did not disclose further details regarding the brand.

“Reputable as media platforms are, clients would only have bragging rights of being featured, not going viral, or having the popularity they assumed it would bring,” Mobley said. 

Over the last two years, brands have been focusing more of their earned media efforts on TikTok in hopes of going viral to boost brand awareness. Small businesses, especially, have leveraged the platform as a cost-efficient option with a low barrier to entry, per previous Digiday reporting. Meaning brands may be more focused on going viral as a way to build brand awareness instead of earned media from publication clippings via a communication firm.

In that reporting, a communications professional told a similar story, stating that the firm was able to place media for a brand in TechCrunch. The client-agency relationship ended a month later because it wasn’t enough, per the professional.

While there have been countless success stories on TikTok, going viral isn’t guaranteed, making it harder for PR professionals to recommend it as a strategy or guarantee it will garner the results brands are seeking. 

Even before the pandemic, clients were inching toward a more-for-less attitude, said Samantha DiGennaro, founder and CEO of DiGennaro Communications. But the pandemic “put that on steroids,” she said, adding that as brands pulled back on earned media spend, communication agencies often worked for less in hopes to retain clients and ultimately stay in business.

“That has driven fair markets down a bit in my own assessment,” she said. “So clients have gotten away with demanding more for less.”

When DiGennaro started her agency out of New York City nearly 20 years ago, the average contract lifespan was between two to three years. Now, the average contract term is three to six months, meaning clients are less willing to spend time building their brand narrative, she said.

As brands jump from agency to agency looking for a quick fix to their marketing strategy, some experts have labeled them jumpers, according to previous Digiday reporting.

That’s not to say the onus is solely on brands to fix the relationship with agencies, DiGennaro said. “We need to be accountable as agency leaders to not just blame the client for being bad behaved but holding ourselves accountable for clients we want to take on our roster,” she said.

Part of the solution going forward, experts say, is re-opening lines of communication between clients and their agencies.

As one professional previously told Digiday: “You hired me to be your expert. Let me talk you through this and walk you through what this landscape looks like, and how we can get you to where you want to go.”

BuzzFeed’s stock is trading at roughly less than a third of the value it had when it debuted, at $3.39 when the market closed on Wednesday. Not to mention, 94% of the $287.5 million the SPAC raised was withdrawn by initial investors when it merged with the publisher to take BuzzFeed public.

Conversely, Forbes announced on Wednesday morning that it will forgo its plans to go public via SPAC, terminating its business combination agreement deal with Magnum Opus.

Why Forbes scrapped its SPAC

Bill Hankes, Forbes chief communications officer, called the SPAC environment “increasingly inhospitable.” The “scrutiny and amount of time” it’s taking to go public via SPAC has “increased exponentially,” he added.

Forbes, he noted, was supposed to close on this deal in February. The deal was extended as it neared two prior expiration dates. Asked about the delay on stage at the Digiday Publishing Summit on March 29 — following the second extension — Forbes COO Jessica Sibley cited the “slow and standard” auditing process, heightened diligence around SPACs and an SEC backlog of SPAC deals to assess but said, “We’re confident that we’ll be able to go through the IPO process.” The third expiration date was on Tuesday — this time, Forbes and its majority owner, Hong Kong-based investment group, Integrated Whale Media decided not to extend it again.

The associated financing through private investments in a public entity (PIPE) — in which Forbes announced it had raised $400 million from private investors back in August — will also no longer close. None of that money exchanged hands, as it was contingent on the SPAC closing, Hankes said. The SPAC was sponsored by Magnum Opus, a blank-check firm based in Hong Kong. The original deal announced in August valued Forbes, a 104-year-old company, at more than $600 million.

SEC delays

In March, the SEC said it would start cracking down on SPACs. Hankes said this was what slowed down the process of closing the SPAC deal. “Additional review cycles by the SEC takes a lot of time and a lot of effort by all parties involved,” Hankes said. “At the same time, the SPAC vehicle itself has fallen out of favor with investors,” as many companies that have gone public via SPAC have “performed poorly,” he added.

“There are other alternatives we can pursue,” Hankes said. While the decision to go public via other means or to find an investor to acquire the company outright is “up to our majority shareholder [i.e. IWM],” Hankes said, “nothing is off the table at this point.”

Analysts Digiday spoke to agreed that companies are struggling through the additional level of scrutiny from the SEC in regards to SPACs going public. The large draw of choosing this route was to avoid the lengthy process of roadshows and less pressure from investors along the way.

Daniel Kurnos, senior equity analyst for internet, broadcasting and media at investment banking firm The Benchmark Company, said Forbes was likely “caught up in the SEC review process given their high concentration of foreign ownership.” In addition to IWM’s majority ownership, in February Forbes sold an ownership stake to Binance, a cryptocurrency exchange that was founded in China.

‘Terrible market for a SPAC’

Most of the analysts Digiday spoke to agreed Forbes’ business is ripe for investment — but it is not the right time to go public via SPACs.

“It’s a terrible market for a SPAC,” said Shahid Khan, partner in the telecommunications, information technology, media & electronics practice at management consultancy Arthur D. Little. 

“I do not think the market is doing anyone any favors right now in terms of going public via any method,” added Kurnos. “Overall volatility and sentiment likely need to improve first.” 

However, Kurnos did not believe Forbes’ decision to terminate its SPAC deal “in any way shape or form reflects on the media investment landscape,” Kurnos said. Sam Thompson, senior managing director at M&A advisory firm Progress Partners, also did not think this signals the end of the SPAC route among media companies necessarily, but instead blamed the timing given how the economic landscape has weakened amid rising inflation and interest rates. “SPACs are not a bad idea, but who wants to IPO in a market where we’re not even sure we’ve hit the bottom?” he questioned. Plans for a public listing, he added, are likely being “put on hold” in the media industry.

Private equity boom

However, the uncertainty in the stock market means it’s a “great” time for private investment in the media, Khan said. North Equity-owned Recurrent Ventures, for example, announced $300 million in new funding last month led by Blackstone Tactical Opportunities, bringing its total amount raised to more than $400 million. Khan cited other examples, such as Apollo Global Management’s acquisition of Yahoo last September. “The media industry is actually quite ripe for investment,” Khan said.

But media ownership by private equity firms can feel like a death knell for employees and for their jobs. Hedge funds like Alden Global Capital have a reputation for gobbling up local news organizations, stripping them down to cut costs and firing staff.

Change is certainly coming to the media industry this year, analysts agreed. Kurnos suggested further consolidation of the media market. “We would not be surprised to see a wave of consolidation over the next 12 to 36 months. That, more than anything, would be the reason media companies, and digital media companies in particular, do not go public: They get gobbled up by the larger players looking for greater data lakes and scale benefits,” he said.

Thompson said he is seeing media companies reorganize, some are going private, and others are bringing in further PIPE investment to bring in outside capital. “I think we’re probably going to see different forms of layoffs coming forward,” Thompson added. In the past few years of the pandemic, “it was a matter of ‘growth at all costs.’ Now, it’s like ‘Oh wait a minute, we got to start thinking about the costs.’”

As the stock price of the Facebook parent company continues to stumble — while down by 2.5% after hours on the day of the announcement, its market cap remained comfortably north of $500 billion — Digiday asked the ad industry to reflect on her tenure.

The ‘adult in the room’

Widely deemed as “the adult in the room” at the social network, Sandberg joined Facebook in 2008 just four years after it was founded by CEO Mark Zuckerberg — he was aged just 23 when she joined directly from Google. “Sheryl architected our ads business, hired great people, forged our management culture, and taught me how to run a company,” he wrote in a press release reflecting on her tenure.

During her 14-year run at the top of the company, Facebook scaled the heights of social media unseating incumbents such as MySpace, while Sandberg’s efforts in developing its advertising offering ultimately played a huge role in its transition from Silicon Valley start-up to publicly listed behemoth.

Matt Prohaska, CEO of Prohaska Consulting, said her efforts at “two of the best mousetraps ever built in media” are worthy of credit, but she must also be held accountable for the lowlights that happened on her watch.

“Zuckerberg has always been put out as the face of the franchise but she clearly has been the brains of the entire operation,” he said. “Every decision that was central to monetization regarding its use of data, both use and abuse, have been under her control.”

Facebook changed its name to Meta in October 2021 amid a broader industry reckoning on consumer privacy — and a move to dazzle advertisers in the metaverse. “She’s also become central to what the company has become in trying to earn its well-earned bad reputation by changing the name of the company to distract people,” Prohaska said.

Meanwhile, another advertising executive, who requested anonymity given their company’s interactions with Meta, noted that controversies concerning Facebook’s media offering, such as the multiple snafus over performance measurement, not to mention data security and content-curation concerns, have marred its reputation.

“She hung on for longer than many had expected — not just because of the metrics but also the sense that there was a drift politically towards the Peter Theil camp in Zuckerberg land,” noted the source. “Advertisers right now are already deeply cynical when it comes to Meta so this doesn’t necessarily change that.”

Exits at a time of existential threats

The announcement of Sandberg’s exit comes less than a year after Carolyn Everson, an exec that many also considered as one of the faces of the social networking giant on Madison Avenue exited the company.

Mack McKelvey, founder and CEO of strategic marketing firm SalientMG, noted how these key departures emerged at a time when its ads team faces growing competition from the likes of TikTok as well as emergent threats such as retail media, not to mention opposition from platforms such as Apple.

“Given the rise of Amazon’s advertising business, a potential ad strategy from Netflix on the horizon, and the continued challenges Meta faces from Apple’s privacy features; it’s certainly time for Meta to recalibrate its approach to advertising,” she wrote. “Sheryl’s departure should certainly pave the way for new approaches and plenty of discussions in Cannes.”

Allen Adamson, co-founder of brand consultancy Metaforce, noted how Sandberg’s departure is “the last thing the company needs right now” when it comes to its reputational stock on Madison Avenue given her stabilizing role in Meta’s C-suite.

“No way the next 5 [sic] years will be as fun as the first 10,” Adamson wrote in an email. “One more piece of the foundation is shaky, COO keeps all the balls in the air all the time. Replacing her is easier to do in title than capabilities.”