As the idea for an Advertising Initiative became real for INMA over the past two months, and that I would lead the initiative, I began reaching out to members worldwide to better understand their priorities.
Whilst I have spent much of the past three decades intersecting with advertising in the United Kingdom and beyond, I wanted this new Advertising Initiative to capture the voice and aspirations of INMA members across the world.
From those conversations, I was able to construct three main focus areas for the year ahead:
- The rise of ad formats: To include best-in-class case studies on contextual advertising, content studios, branded content, new advertising formats, self-serve advertising, and programmatic.
- Our revised sales teams: Getting the right talent, motivating sales teams, emerging team structures, selling first-party fueled advertising, franchise selling, and where does e-commerce fit in? What should our salespeople be selling in future?
- The new role of print: How to leverage print’s advantages in an increasingly digital world and where print fits in the emerging marketing mix, still the cornerstone for many of our media offerings to advertisers. Is there too much money still left on the table for us to ignore it?
In this inaugural newsletter, I want to touch on the legacy possibilities of print advertising and an ambitious re-imagining of “advertising” by BuzzFeed and how that parallels our own challenges ahead.
The new role of print in the advertising mix
Print advertising’s importance to media companies can’t be ignored. But where does print fit in our fast-emerging digital world?
The fact is many media companies continue to struggle with turning digital advertising revenues into the levels we’ve seen in print’s past. For many, print remains an important component of the advertising mix, part of the choice of channels to offer advertisers.
Over and over, INMA members in Europe, North America, Latin America, and Asia/Pacific tell us that the emergence of economies from the pandemic will lift advertising fortunes — and finding smarter ways to contextualise print is too big an opportunity to ignore.
A CEO for a North American news media company put it best when he told me: “The main issue is that there is still too much money on the table with print, which can’t be ignored. A focus on digital is good, but it will not, in itself, solve our industry’s revenue problems we will all face over the next 12 months.”
When I asked the CEO what we should do next, he insisted: “Prove digital works better, but don’t write off print just yet.”
This reflects many comments from INMA members who realise digital is our future, yet print is vital for the next two years at least — probably many more years for some.
A Brazilian CEO told me that demonstrating proof of print’s performance remains vital. “It is enough to fully measure customer action attribution (sales, leads). This a deal breaker for many advertisers. Print is important, but how can we effectively measure it?”
The CEO of a U.S. regional media company told me a home truth, which related to the many publishers who promote and believe strongly in print: “We must determine a way to communicate that we are more than (just) a newspaper, while maintaining the credibility that comes along with being a newspaper.”
Yet another publisher particularly wanted to know how “print plus digital” stands up versus, say, Facebook.
What is the print advertising opportunity in the economy’s upward trend? Where does print really fit in the Digital Era? How do we measure print in an advertising world that demands measurement? How should print advertising be communicated in a publisher’s multi-platform storyline? These are the questions coming from news industry CEOs as we fine-tune the new INMA Advertising Initiative.
BuzzFeed’s approach to advertising: A lesson for all publishers?
BuzzFeed describes itself as the world’s leading independent digital media company, leveraging data and innovation to reach hundreds of millions of people worldwide — and a far cry from an organisation born often of cute cat pictures.
Whilst I live in London where our advertising landscape is somewhat unique, I draw inspiration from this U.S.-based company, especially as we aim to future focus the media industry. To say the least, they have an ambitious view of what advertising means to them.
When BuzzFeed confirmed in June its plan to go public, it made an investor pitch saying that it can accelerate growth through newer, fast-growing businesses like commerce. Interesting in itself, yet the details of its presentation to investors shows BuzzFeed still expects to be heavily reliant on advertising, a business in which it has struggled to grow over the past few years.
Speaking of commerce, I recently called on a leading South Pacific publisher who confirmed that he saw e-commerce being a key part of the future sales teams’ armament. I wonder if you do, too?
What exactly is “content”?
BuzzFeed told investors it expects to generate US$654 million in revenue in 2022, up 25% from this year, with traditional advertising accounting for 48% of the total and the rest coming from commerce and content. However, the “content” business consists mostly of new formats such as branded content, making videos and articles that look like editorial items but are actually ads. So that means close to 77% of BuzzFeed’s revenues next year will effectively come from advertising.
By 2024, when the company projects it will surpass US$1 billion in top-line revenue for the first time, these advertising-based revenue streams are expected to account for nearly 70% of the business.
And yet, BuzzFeed’s growth has slowed over the past couple of years as it struggled to compete in the digital ad market with giants like Facebook, Google, and Amazon.
As Big Tech grows, so does BuzzFeed
The Big Tech companies are swallowing up the vast majority of digital advertising dollars, and their share is only increasing. A report earlier this year from research firm eMarketer said Google, Facebook, and Amazon, combined, accounted for 65% of the U.S. digital ad market alone in 2020 — with Amazon surpassing the 10% share threshold for the first time.
BuzzFeed CEO Jonah Peretti said recently: “Advertising can still be a good business.” He also said, controversially, that BuzzFeed will benefit as the Big Tech platforms take a larger share. The company sells advertising or collects a revenue share from ads appearing next to its content on Google-owned YouTube, Facebook, Snap, and other platforms. So if the platforms grow, BuzzFeed’s platform-based ad revenue grows, too.
BuzzFeed, meanwhile, is also banking on growth in commerce, currently its smallest business, to accelerate its top-line growth. Like other digital media companies, it makes money in affiliate commerce by putting links to retailers’ Web sites within its articles. If readers click on a link and end up buying something, BuzzFeed gets a cut of the revenue.
BuzzFeed also sells products directly in areas like cookware, which relates to its “Tasty” food brand. They generated US$57 million in commerce revenue last year, or 14% of total revenue. The company expects that number to hit US$150 million next year, or 23% of its total, and US$330 million, or 31% of the total, by 2024.
INMA has reported recently about publisher efforts in this space, though none more relevant than “Content-to-Commerce Brings Revenue in a Post-Advertising World.” Legacy leaders in this space include Aftonbladet, Dennis Publishing, The New York Times, South China Morning, and Times Internet. Meanwhile, I have put together a custom link on publisher commerce initiatives from INMA’s Best Practices archive. I also recommend an April report by eMarketer titled Publishers and Commerce 2021.
Is this a trend you need to look at? In an era of things like programmatic, what will we require our sales teams to actually sell in future? How will we structure them? What skills will we require from them?
A safe and effective place to advertiser?
BuzzFeed pitches itself as a more brand-friendly, safe place to advertise. And they point to how ad spending is shifting away from traditional TV and towards digital media, a trend BuzzFeed aims to take advantage of. Do we compare other media and try to stack up ourselves in comparison? How does print hold up with our digital offerings combined versus the likes of, say, Facebook?
RAMetrics data points towards print advertising driving higher levels of Web visits (20% vs. 19% for digital), for recommendations (32% for print vs. 23% for digital), and discussions (20% vs. 14% for digital).
Meanwhile, in terms of where we actually are, The Guardian recently stated that advertising spend across the U.K. media fell by more than £1 billion year-on-year during the pandemic lockdown, which resulted in a 48% decline in ad spend from £2.3 billion to £1.2 billion year-on-year attributed to the lack of spending on traditional media.
However, according to the U.K.’s Sunday Times, global ad spend is expected to grow by more than 10% to US$634 billion this year. Data from Momentum Worldwide suggests pent-up demand for experiences and events could pose increased opportunities for brand sponsorship deals as lockdown constraints are loosened.
Perhaps this is one of the keys to our future revenue streams? Take a look at the summary article of my recent INMA Webinar with The Wall Street Journal and see how they are grasping the event experience mettle.
Can we achieve industry consolidation and collaboration at last?
BuzzFeed’s Peretti also highlighted that media consolidation and collaboration could be the way forward, at least partly because bigger companies might have more leverage to extract better terms from the Big Tech platforms.
BuzzFeed recently acquired digital lifestyle publisher Complex Network, the company’s second acquisition aimed at increasing its scale after purchasing HuffPost from Verizon earlier this year.
Is it time for increasing scale to attract better and more advertising and collaboration with other publishers to sell advertising? The United Kingdom has seen this recently with a project called The Ozone Project, a publishing industry collaboration with a digital ad platform built for brands that claims to reach 99% of the UK’s online adults and offering an easy way for advertisers to reach highly attentive audiences at broadcast scale. All this, in brand safe, known environments, trusted and proven to deliver real business results.
Can working together finally work for publishers in an industry, certainly in my own experience inside large media houses, where politics and personalities always seem to get in the way?
BuzzFeed looks at “advertising” opportunities in a comprehensive way: branded content, partnering with Big Tech, affiliate commerce, a safe place to advertise, and collaboration. How can news publishers match this breadth of vision?
How to get involved with the Advertising Initiative
This is the inaugural newsletter for the INMA Advertising Initiative and represents just one of a number of ways you can get involved and communicate with your global peers in the media advertising community.
The basic premise of this initiative is to look at how we rejuvenate data and research-backed media advertising sales for what will we think be a resurgent post-pandemic market. Our aim is to provide actionable, unique insights, thought leadership, and education into future media advertising opportunities for CEOs, senior managements, and sales teams.
There will be many ways for you to connect with us. Here are a few:
- Newsletters: Get bi-weekly Advertising Initiative newsletters in your inbox. Sign up here. At the launch of our initiative, this newsletter will go to all INMA members. At some point, you will need to be subscribed (free, part of your membership).
- Meet-ups: Join your advertising peers for practical members-only upcoming meet-ups where we can discuss the latest trends and case studies in our industry. Join us for the first Advertising Initiative Meet-Up on Wednesday, October 27, when our guest presenter will be Michael Beckerman, chief client officer of Torstar in Canada. Mike will provide his insights into the media buying process from both a client and agency perspective. Come prepared for an interactive session. Register here.
- Master classes: Link to the best advertising minds, exchange ideas at deep-dive master classes. We have just completed our first Master Class in September, which generated 118 participants from 29 countries — and a fantastic 50 Net Promoter Score (NPS). Watch out for news of our next one which is scheduled to take place in February. We are currently finalising the details of next year’s agenda so will be conveying more on this shortly.
Meanwhile, look for reports, presentations at INMA conferences, and private briefings for corporate members.
I hope to see you getting involved in one or more of the above channels. We will only be as strong as the community we serve. So, I personally encourage you to contact me at firstname.lastname@example.org or on Twitter (@challinor) with any thoughts, comments, or suggestions, and I promise to get back to you.