A song to read by: "Don't Be Cruel," by Billy Swan
What I’m reading: "No One Is Talking About This," by Patricia Lockwood
Follow the money
In the midst of reporting out my latest story for Adweek, an exploration of why publishers’ digital ad revenues skyrocketed last year, a few realizations struck me.
First, you should check out the piece if you have the time — it was my first major effort constructing data visualizations from the ground up, and four of them are built using data exclusively provided to Adweek.
But one major takeaway loomed large: Publishers saw their digital ad revenues increase because marketers continue to increase the portion of their budgets that goes to digital.
If that sounds obvious, consider that aggregate marketing spend on digital channels only surpassed aggregate marketing on “traditional” channels in 2019. When I first encountered that statistic a few years ago, I had a kind of Mandela effect moment: Hadn’t that happened already?
As somebody who encounters the overwhelming majority of their advertising through digital channels, even three years ago I assumed that shift had taken place long ago. Instead, in 2019 digital had just eked in front of print.
Now, on the heels of a pandemic that fast-forwarded the media industry a decade into the future, the gap has only continued to widen.
When I spoke to a number of publishing executives about this trend, they spoke with the vindication of a group whose long-ago prediction has finally come true.
When digital-only publishers launched — in some cases up to 15 years ago — they had anticipated this shift. They knew that eventually digital would come to overtake its channel peers, and they wanted to position themselves to benefit when that sea shift occurred.
Now, it appears to have happened. Digital advertising accounts for almost two-thirds of all marketing, meaning publishers prepared for the moment are reaping the benefits.
Plus, that proportion is expected to continue climbing: By 2026, digital advertising could be 71% of all ad spend, according to GroupM data. (This is a Medialyte exclusive; I did not include that figure in the Adweek piece.)
Put simply, as the size of the pie grows, even smaller slices will become sustainable. As long as the proportion of ad spend devoted to digital continues to increase, publishing will grow more viable, not less. And the publishers already in dominant positions will see their advertising revenues expand to unprecedented levels.
Brand safety, digital privacy and ecommerce could boost this rise
Growing the pie is one way to increase the value of your slice — another way is to increase the size of your slice. For the last decade, publishers have been bullied by digital platforms like Facebook, Google, Amazon, Instagram and a variety of other firms.
However, a slew of changes in the media ecosystem portend a rosier future for the news media. I have covered these extensively for Adweek, but here is the quick rundown.
First, as social platforms increasingly struggle to clear away misinformation, toxic commentary and vitriol, brands’ willingness to advertise on the platforms diminishes. At the moment, Facebook is the best example of this phenomenon, but even new entrant Reddit is feeling similar pangs.
Crucially, the platforms will never be able to ensure a brand safe environment — they can clean up muck using machine learning and content moderators and all other manner of reactive solutions, but they can never stop people from posting their inane ideas in the first place.
Publishers, however, can. Brand safety, with a few exceptions, is of little concern when advertising against the content of premium publishers. This advantage has always been the calling card of news media — content is king! — but it has taken on renewed importance in light of the next item: privacy changes.
Over the next two years, a slew of restrictions to the way digital companies can track your web history looks to turn the tide even further in favor of publishers. In short, the ubiquitous tracking of the last decade is on its way out. In its place, most likely, will be contextual advertising, beefed up with machine learning and other ways of turning blind guesses into informed estimates.
This change will also benefit publishers, which offer brands some of the most clear-cut homes for sensible contextual environments. The digital giants that built empires by disregarding your privacy are seeing those dynasties crumble, and publishers will be one of many parties that stand to expand in their absence.
Finally, the rise of ecommerce also looks to reshape the advertising landscape, and commerce-minded publishers like BuzzFeed Inc. BDG, Future, GMG and others will be one of two major parties to benefit.
As privacy changes restrict retargeting, the best way to market clothing will be to advertise on the websites of fashion publishers, like GQ, Vogue or any other number of titles. This alone could lead to a massive influx of advertising revenue for publishers. These publishers have taken steps, such as building on-site shopping features and enabling buy-now, pay-later options, to make it as easy as possible for readers to buy an item that catches their eye.
Others, like the Wirecutters, Strategists and Good Housekeeping’s of the world, are cashing in on this online shopping bonanza by positioning themselves as trustworthy sources of product recommendations, then taking a small commission for their effort. As ecommerce booms, affiliate advertising follows right behind.
These new capabilities, combined with the rise of contextual revenues, will make the future a more hospitable, sustainable place for publishers.
Indeed, after years in survival mode, the promise of a more comfortable future for publishers now appears on the horizon: digital has become dominant; contextual is king; and commerce has blossomed. Optimism is a rare emotion in the industry, but a refreshing one.
Some good readin'
— My data visualization story! (Adweek)
— Another cool one about a new text-to-purchase concept from PureWow. (Adweek)
— When war arrives, crucial advertising dollars disappear. Great system! (Insider)
— I have been really into Stephen Colbert all week. (WSJ)
— I am also always into J. Kenji Lopez-Alt. (The New Yorker)
— I also love Ligaya Mishan, perhaps one of the best food writers of our moment. (New York Times Magazine)
— And this is the author of the book I am currently reading! (New Yorker)
Cover image: "Red Hills, Lake George,” by Georgia O’Keeffe