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The advertising recession is over

Earlier this year, it became pretty apparent that we were in an advertising recession, especially once the large tech platforms started reporting disappointing earnings. Given the easing inflation and the strong economic indicators over the last few months, a lot of publishers were hoping that advertising demand would pick back up in Q4, but Digiday reports this demand isn’t materializing:

“It’s a really tough ad market out there, with pressure on CPMs and an uncertain performance advertising market due to questions about the consumer. Everyone is taking the chance to reset the cost bar,” said Daniel Kurnos, an internet, broadcasting and media analyst at investment banking firm The Benchmark Company. He said he was not seeing any notable positive signals to indicate that the situation would improve anytime soon.

Doug Arthur, managing director at media research and advisory firm Huber Research Partners, echoed that sentiment: “Interest rates are up, the ad backdrop has softened and any degree of ad momentum appears to be turning more toward the large platforms, [such as] Meta, Google, Amazon, squeezing smaller players.”

I'm not sure it's accurate to say we're in an "advertising recession" anymore. I think what we're really in is a "publisher advertising recession."

Ad revenue at major platforms like Google and Meta has mostly recovered, but brands are becoming less and less interested in advertising on traditional media outlets.

Part of it probably has to do with brand safety concerns, but I think there's a growing recognition that the display advertising that publishers rely on just doesn't produce much marketing ROI. It was always a shitty ad delivery system, and brands just have access to too many more effective ad platforms to bother with it.

The publishing industry needs to get serious about building performance-driven ad products, and that probably involves embracing native advertising at scale.

Will consumers listen to podcasts on publisher apps?

Is it possible to get an audience to consume your podcast on a platform outside their normal podcast-listening app? I'm skeptical, but Tortoise Media is making a go of it:

In order to support this audio-first approach, the company decided to revamp its mobile app to focus squarely on its podcast content. Although the company launched with an app, its original purpose was to allow members to consume its written journalism rather than podcasts, and over time, these consumption patterns have shifted with more subscribers reading on the website or in their inboxes.

“The app wasn't as fit for audio purpose as we would have liked,” says Alice Sandelson, Tortoise’s commercial director for audio. “You could listen to our audio, but it wasn't the kind of beautifully curated experience that we thought our audio deserved… So it felt like an obvious place to double down on our audio content was on a new and updated app.”

ICYMI: How Maria Brito used Instagram to build a 7-figure art consulting business

She eventually grew her audience to over 200,000 followers across Instagram, Facebook, Twitter, and email.

The internet is a video-first medium now

Ryan Broderick, the writer behind the Garbage Day newsletter, explained why he now devotes a large portion of his work week to adapting his newsletter content for video:

At some point in the last two-three years, a likely-permanent shift happened online. It’s a video-first medium now. And most major social platforms use short videos as coal for their recommendation engine and if you want to build up an account quickly in 2023, which in turn helps you promote the content you’re making online, then the easiest way to do that is with video.

Brands will always find room in their budgets for live events

Why are publishers doubling down on events? Probably because brands see actual ROI from sponsoring them, something that can't really be said for programmatic display advertising:

“We’ve made our bets in the right places, and advertisers continue to come to us for things that Google, Facebook, linear [TV] networks and other big platforms out there just don’t do or can’t do,” said [Jason Wagenheim, president and CRO of BDG] …

… One media buyer, who spoke on the condition of anonymity, said that while their clients tend to only pay for one experiential or larger brand activation per year, digital publishers are the proprietors that they tend to look when spending those budgets.

“That’s a harder business model to maintain, but it is where I think we can get the most value [and] where the publishers can play and show their value in the space,” the buyer said.

Why a star journalist left journalism

Adam Davidson, who co-founded Planet Money and was a staff writer at places like The New Yorker and NYT, explains why he mostly left journalism:

I believe in journalism. It is absolutely necessary. And, in my experience, the vast majority of journalists are hard-working, earnest people willing to sacrifice a lot for a great public purpose. I love journalists. And much of the work they do is not just good it’s absolutely vital.

But I hate how many journalistic institutions are structured. Ask any journalist about how decisions are made within their company and they will almost certainly tell you that decisions are made without transparency; without deep knowledge; without a clear, bold eye on truth.

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