Month: February 2023

At the beginning of February, advertising agency Reset Digital launched a new programmatic marketplace for the National Newspaper Publishers Association (NNPA), a trade organization that represents more than 200 Black-owned newspapers in the U.S., including the Sacramento Observer, The Philadelphia Tribune and the Dallas Examiner.

The goal of the marketplace was to connect large advertisers like Procter & Gamble and Verizon with publications that hadn’t been equipped to run national programmatic ad campaigns, which ultimately led them to miss out on critical revenue.

On the latest episode of the Digiday Podcast, Reset Digital’s CEO Charles Cantu said that this collaboration with the NNPA went beyond the creation of a marketplace, to provide these news publications with the tech stacks necessary to run ads, as well as teach them how to sustainably build their online audiences.

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

Building the programmatic foundation

One of the publishers that we like to talk about, as a good use case, is Quintessential Gentleman, an online magazine publication, Black-owned and operated. [It brings in] 10,000 to 15,000 uniques monthly, so not a big site at all. And quite frankly, this young gentleman was making money selling regional, hard coded ad campaigns and sponsorships. So no real digital or real time ad enablement was happening there.

 We brought an ad server to him, we brought our SSP to him, we brought a video player to him, and so now he’s able to participate on a level that he never would have before, right? And those are things that alone would have cost him $1,500 to $2,500 a month in technology fees, which quite frankly, he wasn’t making, so it wouldn’t even make sense for him to do all of that just to come home with a check with 500 or 1,000 bucks, even 5,000 bucks a month. Just wouldn’t pencil out for him. And that’s the same across the board for small publishers. We super serve folks that are underrepresented.

70% goes to the publisher 

The majority of the dollar goes to the publisher, full stop. So unlike other [marketplaces] that are [available], we built all the technology. So in some cases, we subsidize the ad server, we pay a third-party ad server to bring those folks on to because we have a buy-side ad server, not a sell-side ad server, so that’s an important part that we pay for. Same thing with the video player, we didn’t build our video player, we [brought] in a third party. And we bring those solutions to them and we pay for that, so there’s no out-of-pocket for them.

And then on the other side of the question, you know, an example of Procter & Gamble or Verizon, more than 70 cents on the dollar actually goes to the publishers. [That] is very unlike what you see in open marketplaces, and even, quite frankly, big DSPs that have curated their own marketplaces that publish numbers of 60% margins. That’s 30 cents on the dollar going to the publisher. We’re the opposite of that.

Prioritizing stability for publishers

First year, our goal is [to have] about 15% of their inventory monetized programmatically. That may grow, but that’s the initial focus. And it depends on the publisher. So [for] some publishers, I think, an issue in the marketplace today is that a lot of [Black-owned publications] are oversold. And I guess that’s a good problem to have, but at the same time, you’ve got folks trying to figure out how to fill in that inventory and not everyone knows how to do it.

In the case of what we’re trying to do, we’re trying to make sure that we’re growing their businesses and helping them increase their traffic volume, in addition to being able to take down what is the existing 15%. So this is a true grow the pie solution, where we’re helping grow the audiences on the site. So at the NNPA, they had Google teaching Black newspapers how to increase their online rankings and increase their visits because all of these things matter. It’s not just about ad enabling what exists. It’s about playing catch up, so that the whole thing grows the way we want it to grow.

So Matthiesen decided to strike out on his own, launching his independent esports journalism site, Em Dash Esports, in September 2022. As the League of Legends World Championship progressed over the following month, Matthiesen’s efforts were rewarded by growing readership. His traffic more than doubled between the first and last weeks of the World Championship, rising from a four-digit figure to a five-digit figure by the end of the event, according to Matthiesen, who declined to share specific numbers. At the moment, Em Dash is still in the brand- and readership-building phase, and Matthiesen does not yet have a specific plan to monetize the site.

“I can see why people get addicted to this, because the numbers go up, and it’s such a drug,” Matthiesen said. “Like, holy shit, 10,000 people visited my site today. What the fuck?”

Endemic esports journalism has gradually collapsed over the past two years. In addition to Inven Global, publications such as ESPN Esports, Upcomer and the Washington Post’s Launcher vertical have folded in recent memory. Operations such as Venn and G4 brought in millions of dollars in funding before failing spectacularly in 2022. The Esports Observer shuttered its Twitter account and rebranded as the esports vertical of Sports Business Journal in December 2022; even smaller endemic sites like Jaxon are starting to drop like flies.

In the wake of these closures, Matthiesen is not the only esports journalist to find success by going independent. Jacob Wolf’s company, Overcome, made its fourth full-time hire on Feb. 6; Dominic Sacco’s project, Esports News UK, drew record traffic in January; and Cody Luongo’s newsletter Sharpr announced a partnership with +More Media on Feb. 1, among many other examples.

While the exodus of journalists to independent platforms such as Substack is not limited to the esports space, the phenomenon is particularly pronounced in esports journalism due to the lack of full-time jobs available in the industry — and the opportunity for writers to carve out yet-uncovered niches such as Esports News U.K.’s regional coverage or Sharpr’s esports betting focus.

“I saw an opportunity for myself, because I found that the people that were covering esports gambling were the gambling press, and I felt that the esports press wasn’t conceptualizing or understanding the betting industry side of it — and vice versa with the gambling side,” Luongo said.

Indeed, as more esports journalists strike out on their own, it’s becoming increasingly clear that readers looking for the hard-hitting stuff can also go directly to independent media operations and newsletters, rather than the bigger players such as Dot Esports or Dexerto.

“I talked to a lot of people that own these websites, and they had a chance to hire me,” said James Fudge, who launched his own publication, The Esports Advocate, in January. “And they decided not to, through the last year — so now I am their competition, and I’m going to see what I can do.”

It’s not that the larger publications are unable to turn out high-quality esports journalism. Both Dot and Dexerto, two of the only endemic esports publications to claim profitability, have published their fair share of industry-shaking deep dives in the past. But they’ve learned that the audience for hard-hitting truth-to-power esports journalism simply isn’t large enough to support an entire company. Dot and Dexerto have adapted by pivoting to other areas: news aggregation and relentless content churn for the former, celebrity-news-style influencer coverage for the latter.

Amid this, the readership of both sites has consistently risen. Between December 2021 and December 2022, Dot’s traffic increased by nearly one million total unique visitors, and Dexerto’s by nearly 1.5 million, according to data shared with Digiday by Comscore.

The collapse of endemic esports publications in 2022 left many industry veterans worried about the apparent lack of an audience for in-depth reporting on the space. But the growing traffic of independent esports publications in 2023 shows that the audience is there for this type of content. At the moment, this audience is only large enough to support individuals, not entire media operations.

“I think the audience is aging, and they don’t want to know the ‘what’ anymore — they want to know how and why,” Wolf said.

With this growing audience comes new revenue opportunities for the smaller independent esports journalism operations. Most, such as Wolf’s Jacob Wolf Report, rely on subscriptions at the moment to bring in consistent revenue — but Esports News UK just opened up new ad inventory, and going independent has created opportunities for writers such as Wolf and Fudge to do consulting work and author the occasional white paper. The independent players are still figuring out monetization, but the signs are encouraging.

“I’m not here to make loads of money,” Sacco said. “I’m here to serve the UK esports community.”

Indeed, as the esports journalism industry has contracted over the past year, many writers have left it for greener pastures such as marketing or PR. Those who have stuck it out haven’t necessarily done so for the paycheck.

“We are a business, but we are not purely in it for money,” said Claire Farnworth, a co-founder of the independent gaming media site Gamer Guides. “And because we’re independent, we don’t have shareholders breathing down our necks to be profitable, or to cut the losses.”

According to a Digiday+ Research survey of more than 100 agency professionals, the number of agency pros whose clients put at least a very small portion of their marketing budgets toward Amazon has ticked up over the last six months. In Q3 of last year, 54% of respondents said their clients spend at least a little on Amazon, compared with 59% who said so in Q1 of this year.

But for those agencies whose clients do put some of their marketing spend toward Amazon, how much they spend is kind of all over the board. Those who spend a very small portion of their budgets on Amazon make up the largest group at 23%, while zero respondents said their clients spend a very large portion of their budget on Amazon.

It’s a very similar story for Walmart, Target, eBay and other non-Amazon retail sites: The percentage of agency pros who said their clients spend at least a very small portion of their marketing budget on these other retail sites grew slightly from 41% six months ago to 49% today. And the same percentage of respondents who said their clients spend a very small portion of their budgets on Amazon said the same of other retail sites (23%), with zero respondents saying their clients spend a very large portion of their budgets on other retail sites, just as with Amazon.

One difference between Amazon and other retail sites that is worth noting is the percentage of agency pros who said their clients spend a large portion of their budget on these channels: 7% of respondents to Digiday’s survey said their clients spend a large portion of their budgets on Amazon, but only 1% said the same of non-Amazon retail sites. 

When it comes to Amazon’s ability to actually drive marketing success for agencies’ clients, Digiday’s survey found that confidence in Amazon as a marketing channel is actually growing: 67% of agency pros expressed at least some confidence in Amazon’s ability to drive marketing success for their clients six months ago, and that number has risen to nearly three-quarters (73%).

However, the survey also found that Amazon is making the biggest gains in the slightly and somewhat confident categories, while the percentages of respondents who said they’re confident or very confident has actually fallen. Ten percent of respondents to Digiday’s Q3 2022 survey said they were slightly confident in Amazon, and 10% said they were somewhat confident. Both of those percentages have risen to 19% this quarter. However, the percentage of those who said they’re confident fell from 36% in Q3 2022 to 27% this quarter, and those who said they’re very confident in Amazon fell from 12% to 9%.

Digiday’s survey found that confidence in other retail sites has been slowly building, as well. A year ago, 58% of agency pros said they were at least slightly confident in Walmart, Target, eBay and other non-Amazon retail sites’ ability to drive marketing success for their clients, which rose to 63% this quarter (which was about on par with what agency pros said six months ago).

But as with Amazon, these other retail sites still don’t elicit a lot of confidence from agency pros. In fact, the biggest growth in confidence occurred in the slightly confident category: 16% of respondents to Digiday’s survey said they were slightly confident in other retail sites six months ago, a percentage that has risen to a full quarter (25%). Meanwhile, those who said they’re somewhat and slightly confident fell slightly from 21% six months ago to 17% today, and those who said they’re very confident remained steady at a very low 4% of agency pros.