The channel has arguably revived Criteo’s fortunes as the third-party cookie dwindles into irrelevance. Walmart, Target, Kroger, Best Buy, Home Depot, Gap, CVS—it seems like every other week another major retailer carts out a brand-spanking-new retail media network.
All that ad spend sure sounds great for retailers. But what about publishers? Are retailers siphoning spend away from the already beleaguered publisher set?
Quite the opposite, in fact. The retail media revolution is helping line the pockets of premium publishers.
Cautious journey to digital advertising
In a nutshell, retail media is when retailers offer advertising access to their customers on-property (or off-property). It’s not a new concept by any means, but it’s been mainly relegated to advertiser campaigns in actual brick and mortar stores. (Think about specialty brand displays at department stores or supermarkets.)
While retailers’ online traffic grew with the rise of ecommerce, many were reluctant to plunge into digital advertising because of their hyper focus on user experience. A 2006 Amazon study famously found that every 100ms in extra load time cost 1% in sales; a 2017 Akamai followup suggested that every 100ms of latency cut conversions by 7%.
Unfortunately, digital advertising has a bad reputation for latency, as well as other factors that ruin user experience: gauche creative, code that breaks a page, open doors to device-infecting malware, etc. All those issues can arise before programmatic enters the picture. With bad user experience being detrimental to online sales, digital advertising simply wasn’t worth the risk for most retailers.
Yet they no doubt had their eye on Amazon’s flourishing ad business. There should be an asterisk by eMarketer’s $41 billion in 2022 US ad spend figure: about 78% of that goes to Amazon. However, the $9 billion left over is nothing to sneeze at, and you may have noticed Amazon does a fair deal of third-party media buying.
U.S. retail mainstays like Walmart, Target, and Kroger have been ramping up their digital retail media operations for the last five years. And then came the Covid pandemic: Suddenly consumers weren’t in stores; they were flooding websites and apps and racking up online orders. The opportunity to monetize this traffic was just too good to pass up, especially as major retail brands had proven that integrating ads wouldn’t necessarily harm user experience.
Advertiser appeal
Retailers have the kind of high-quality audience data that make advertisers swoon. Through tools like loyalty programs, many retailers boast comprehensive customer profiles that can be used for precise targeting. Retailers are stocking up on data scientists to drive customer insights and behavioral trends, and for many advertisers measurement goes all the way to point of sale.
In addition, retail sites and apps are a data oasis in the increasingly untargetable mobile ecosystem. The presence of emails and other deterministic identifiers make retailers ideal partners for identity solutions like LiveRamp and LiveIntent in finding audiences on third-party properties.
On-property advertising is really only the jump-off point. The huge gains are in audience extension, or when retailers start finding their customers on third-party sites and apps.
Quality quest
That’s where premium publishers come in. When asked at the IAB Annual Leadership Meeting in January if she felt that retail media networks were a threat to revenue, BET EVP and CMO Kimberly Evans Paige replied, no—we’re partnering with them.
Advertising revenue is incremental for retailers. Therefore, advertising must be accretive to the core revenue business. On-property, this means high-quality, brand-safe ads that don’t cause latency. Landing pages can’t send customers to competitor sites and only authorized vendors can be allowed through the pipes, lest data leakage become a concern.
Going off-property is not just extending the audience, but also the retailer brand. During an AdMonsters Ops session in June, Christine Foster, Vice President, Media Operations at Kroger mentioned that a great deal of their offsite ads are actually co-branded. So, retailers with big advertiser budgets in tow may be reticent about appearing adjacent low-quality ads, scam ads, or ads with questionable content, which could range from gambling to marijuana to even crypto.
When retailers buy off property, they need high-quality inventory in well-lit spaces. To ensure brand safety—both their own and advertisers’—retailers are pursuing guaranteed direct deals with premium publishers as well as private marketplace arrangements. Certainly, major publisher brands with massive traffic are already benefiting. But there’s definitely room out there for niche publishers with ties to specialized retailers.
Lifting all boats
The excitement around retail media stems from the fact it’s beneficial for just about every party in the digital media ecosystem: Advertisers reach key audiences with confidence; ad tech companies like Criteo and CitrusAds develop new business; publishers gain revenue; and of course retailers are able to further monetize their customer data.
Publishers of all sizes need to investigate retail media opportunities. However, they also need to understand that their ability to rake in revenue here greatly depends on the quality of their environments.
Publishers stand to lose up to $10 billion due to the deprecation of third-party cookies and mobile advertiser IDs (MAIDs), according to McKinsey. Earlier projections by Google indicated that publishers lose half of their ad revenue on average when cookies are blocked. The impact is compounded by the growing impact of global privacy law and browser changes.
Despite the growing complexity, publishers actually sit in an enviable position as we edge toward the cookieless future. Actioning data in this new world will fall to them (and their monetization partners) thanks to their access to, and ability to activate, first-party data. Publishers can replace some of the revenue lost to deprecating identifiers using a combination of this first-party data and probabilistic methods.
Here are five key considerations for publishers honing their approach to identity resolution:
Lean into partnerships
With publishers securely in the driver’s seat for this next chapter, it is vital for them to move full steam ahead with the necessary procedures in preparing for a world with fewer signals available to third parties.
Most importantly, publishers must select the right partners to ensure an addressability strategy that will stand the test of time. Successful and well-integrated partnerships will allow them to continue to monetize their inventory in the long term, without being affected by potential changes — including signal obfuscation — being implemented by operating systems and browsers.
Explore multiple solutions
Universal identifiers are one of the most promising solutions developed to make publishers’ traffic addressable even when conventional identification methods are deprecated and signals are no longer available to third parties. These work by gathering various signals from publishers to reconcile a user across domains to enable the demand-side to target them with personalized messages and measure the results of their efforts.
Some of the most effective first-party user ID solutions use both deterministic and probabilistic methods to collect both hard and soft signals in a privacy-first way. These can include hashed email addresses, IP address, page URL, user agent string, and timestamps. With privacy regulations constantly on the move and some traditional signals dropping, ID solution providers that rely upon a wide pool of data points will ensure that addressability strategies are scalable, accurate, and future-proofed.
On the other hand, relying on one signal only, no matter how consistent it is, presents significant limitations. Let’s take the example of the hashed email address, which is the most commonly used signal to deterministically reconcile IDs across domains. Although this is a very accurate approach, it also presents two main issues. First of all, it’s not scalable as it doesn’t enable publishers to address all users who are unwilling to enter their email address to log into a website. At the same time, relying on email addresses only is not future-proof. Features such as Apple’s Hide My Email can significantly impact publishers’ ability to collect and leverage such signals for addressability purposes.
Prioritize first-party relationships
Selecting the identity partner that offers the most suitable approach is not enough. The ecosystem is constantly evolving and being disrupted by technical restrictions and stricter regulations. Establishing a first-party relationship with your identity solution providers is crucial to ensuring identification signals are shared in the most secure way possible.
Server-to-server integration methods enable publishers to share information with their identity solution provider while being less exposed to interference rolled out by browsers and operating systems. This integration also allows publishers to leverage direct encrypted connections, boosting the security and privacy of the data transfer. Publishers can also store user IDs in their server databases, and then associated them with client-side, first-party IDs.
An identity resolution partner can keep track of consent signals from identifier to identifier, as well as at each data touchpoint, and manage opt-out preferences.
Place privacy above all
Let’s not forget about the most important aspect: users’ privacy choices. Whatever signal publishers decide to use and pass to their partners should be obtained and shared on the basis of consent. This is a legal requirement in places like Europe and California, with many more states and countries looking to adopt or increase the strictness of privacy laws. Regardless, taking into account people’s privacy choices and leveraging frameworks and technologies that collect and enforce such preferences should be paramount.
Forward-looking, industry-leading media owners have been honoring opt-out signals from Global Privacy Control, an initiative that makes it easier for people to exercise their data privacy rights without informing every single website they visit. This is an additional step that publishers can implement as well as another signal they can pass to their identity partners to demonstrate commitment to respecting users’ preferences.
Good things come to those who DON’T wait
The deep sigh of relief that went through the industry when Google pushed back the demise of cookies was premature. We all thought we had more time to procrastinate on finding a solution but in reality, we don’t. Nearly half of the internet traffic is already unaddressable and signal changes are happening all the time.
In a constantly changing ecosystem, there shouldn’t be room for procrastination. If you’re one of the 50% of publishers that have not integrated ad identity solutions yet, don’t delay any longer. Having a secure integration with the right identity partners will enable you to future-proof your addressability strategy for the long term. It will also enable you to address and better monetize Safari and Firefox traffic today.
DCN’s editorial director Michelle Manafy interviews Nicole Carroll, the Editor-in-chief of USA Today and Aja Whitaker-Moore the Executive Editor of Axioson Newsroom innovation: What’s the future of storytelling at the Collision conference, which was held in Toronto, Canada June 22-24, 2022.
[Full transcript below.]
WATCH/LISTEN TO THE INTERVIEW
FULL TRANSCRIPT
Michelle Manafy
I’m back! But I’m in good company. I’ve got some terrific speakers here joining me to talk about newsroom innovation. If we could, I feel like the topic is just huge. If maybe you’d like to kick us off with what the heck does it even mean?
Nicole Carroll
You know, I think innovation now, in the olden days, it was always tech and what’s the next product? And what’s the next thing? And I think now honestly, it’s about engagement is like how do we truly authentically engage with our audiences. And that could be tech that could be in person storytelling, that could be, you know, lots of different ways. I also think innovation always is just about to keep moving forward, you know, every generation of journalists is going to do it a little bit differently. And I think we’ve got to find our way. So, I think about innovation, not just in a technology sense, but literally everything we do in hiring, and how do we fund our journalism? How do we connect with our audiences? We’ve got to keep moving forward.
Michelle Manafy
Aja, anything you want to add to that?
Aja Whitaker-Moore
No, I mean, I think you’ve covered a lot of it. And from the actors perspective, you know, we’re a startup. And so everything that we do is kind of innovative, in our opinion. And we were born of, you know, we thought a problem, which was, there’s too much information, and people don’t know how to keep up with it, they don’t know how to access it. And, you know, we think that our promise is innovative in the sense that we came up with a new format, came up with a new delivery mechanism, and are coming up with new ways to reach an audience on an everyday basis. So that’s our version of innovative, I think.
Michelle Manafy
So let’s go back to Axios then for a second. How do product and editorial work together in your organization, and how do you drive innovation in that relationship?
Aja Whitaker-Moore
Yeah, I mean, pretty closely, because, you know, like I said, you know, we are focused on smart brevity and packaging things in a way that people want to digest them. And that means that we’re mobile first. And that means that everything we do has to be looked at from a product perspective, how are we delivering lists in a mobile friendly format? How is our app working? How are we delivering products to people, you know, in the way that they want them. So we work really closely together with a product team that I think understands journalism and understands news in a way that is really important.
Michelle Manafy
I mean: easy for you to say, “built from the ground up.” But let’s talk about USA Today. Like, is there a tight integration of product and editorial, editorial, huge,
Nicole Carroll
we’re, you know, we’re one of the OG startups, but we were actually smart, brevity 40 years ago, and we’re pretty, you know, made fun of because of that. So I’m you know, I’m glad to see the world has, you know, come around to that you can get good information in smaller amounts of words or video. So I, I’m really proud of the work we’ve done. But yes, we are really tight with our product teams, the fact that we just want to call with them this morning. You know, we’re constantly looking at not here’s what we should do. But what is the outcome you’re looking for? And then working together? How do we get to that outcome? We try not to go into it with the solution you go into it with what’s the outcome you’re looking for, and what do we need to bring to that equation?
Michelle Manafy
So one of the things you touched on in like your “what is innovation” was: staffing, diversity, leadership, those those issues… Can you tell me a little bit — let’s start with USA Today — about how you’re approaching leadership and recruiting with an eye to fostering innovation to fueling it.
Nicole Carroll
It’s never been more important to recruiting and what we’re doing right now. And I don’t know if how many of you are in the industry. But there’s the great journalism shuffle going on right now. I mean, everybody is moving somewhere else. Right now, there’s a real fight for talent and leadership. And I think people want to be part of authentic companies, who are really trying to again, I always say our job is to spread truth, you know, to engage with our audiences. And so showing a path having mentorship programs showing an opportunity for leadership, showing industry leadership is really important to creating the culture that will keep people in our organization. We’ve made the pledge at Guenette, that we want our newsrooms to reflect our communities by 2025. And we measure ourselves every year against that benchmark around racial diversity. I measure it every quarter at USA Today and report that to the staff. I think it’s really important we hold a mirror up to ourselves and be really honest about how we’re doing.
Michelle Manafy
How about Axios? What what what is the approach? How are you thinking about like, what is this newsroom? What is the staffing what does the leadership mean, to our ability to be innovative?
Aja Whitaker-Moore
Yeah, I mean, I think we we agree at that at the start the diversity of our newsroom should reflect the diversity of our audience. And that will then you know, result in diversity of coverage and that’s really what we’re striving towards. You know, our founders are committed to that goal as well. You know, in the fall, we’re releasing a smart brevity book. And they dedicated the proceeds the advance from that book to fund a fellowship program that we’re really proud of where we’re focusing on hiring from diverse communities in underrepresented backgrounds, to mentor them into Axios. And focusing on developing a beat developing the next generation of leaders that we think is, you know, missing from journalism right now. And it’s something that is a part of, you know, our newsroom recruiting our newsroom leadership. Axios is led by two women of color. And myself, and our editor in chief, Sara Gu. And it’s something that we you know, walk, talk, live, breathe and think, is the future of innovation at our company and everywhere, so we’re really focused on it.
Michelle Manafy
Alright, so let’s shift gears a little bit. We there’s been a kerfluffle, of late around the social presence of journalists online, rather spectacular, blow up, in fact, quite visibly on social media. For for Axios, let’s start there. How are you balancing the desire for reporters to have a social presence to leverage that social presence? With your standards?
Aja Whitaker-Moore
Yeah, and when I think we’re, we’re not like, any, you know, we’re similar to every other media organization out there, that’s figuring out, you know, how to balance that, but we’ve been really proud of our track record so far, you know, in the past five years, you know, we we’ve really just said to our staff, we trust you. You arer adults. Represent yourselves represent Axios the way that you, you know, would expect to in public. And that’s actually what’s happened. So I think we are, you know, proud of how we’ve done it so far. And we’ll continue to act accordingly on social platforms, and still be able to share our journalism with the world engage with people in a responsible way. And I think we’re all doing that.
Nicole Carroll
I know that at USA Today, the social presence is a big part of the work. So how are you setting your standards and communicating to your staff that this is important? But you still have to represent our brand.
Right? I mean, we know that, you know, our integrity and our fairness. And all of that is just the bedrock of what we are. And so we want to make sure that we represent our way ourselves that way. On social, we tell people, we want you to bring your authentic selves, we want you to bring your lived experiences. But obviously, we can’t slip into advocacy. And I say this all the time: The power you have as journalists, to choose stories to tell stories to spread stories, is so much more power than you’re going to have in that tweet. And so you know, again: Bring your true selves, bring your authentic selves, but but let’s not tip into advocacy that could harm the integrity of our brand.
Michelle Manafy
So I think another issue digitally in particular is the 24 hour news cycle, right? We’re all facing this kind of pressure to constantly be online, constantly be informing our our consumers. But how are you balancing the 24 hour news cycle with your again, with your standards and your goal to provide actual, trustworthy news?
Nicole Carroll
Well, we’re really lucky and that we’re spread across the country from, you know, Washington all the way to LA. And then we also have a London bureau. So, we really are on 24/7, which, which makes things a little bit easier. But you know, I tell people 100 times out of 100, I’d rather be second than wrong. 100 times out of 100. So if you’re ever in doubt, don’t do it. Double check it triple check it, I’m going to be fine. If we’re last as long as we’re right.
Michelle Manafy
I see a lot of scoops and exclusives at Axios. So how about you? Is there a difference there? Is there pressure?
Aja Whitaker-Moore
Yeah, Imean, I think that our philosophy is a little bit different. We’re not there to deliver you every piece of news. We’re there to deliver you what you need to know, and the things that are important. And so I think that our model is a little bit different in that we package our version of the 24 news cycle into a newsletter suite. So if you’re getting Mike Allen’s AM, and PM and Finish Line newsletters, that’s what we call our daily essentials. And he’s set a really diverse kind of breakfast table for you in the morning. Happy Hour, four in the evening. And he’s telling you the stories that you need to know and so we’re curating that and packaging that I think in a different way than you know, a news wire or or a news organization that’s giving you breaking news 24/7.
Michelle Manafy
It’s interesting. We used to call those “newspapers” where we curated what you need to know i the course of a day. I do think it’s interesting. The last panel was very much touching on this deluge; this fire hose, and how we can discern. And of course you know, I advocate for trustworthy sources like y’all.
Nicole Carroll
Yeah, absolutely.
Michelle Manafy
All right. So, innovation in delivery and formats. I know you specifically mentioned Axios being mobile first. And I think that’s for a little while there that was almost a cliche industry. But I think it’s, it’s a given, is it not? Are you thinking a lot about innovating in terms of say, Tik Tok? Let’s just throw out like, are you looking at new formats?
Aja Whitaker-Moore
Tick Tok? Not so much. Not yet. I mean, we have experimented, I think on all the platforms, you know, we do Twitter spaces, we do curated videos on You know, on Instagram, I think Tik Tok is an amazing platform. And a lot of I think publishers have figured out a great way to do it. But I think it actually is we, you know, right now, you know, we really are interested in podcasts, we’ve found a way to tell long form stories in smart brevity, through audio, which, you know, is is challenging, but we’ve done it with our How it Happened podcast series. It’s got, you know, 3 million downloads, and it’s really resonating with the audience. And we also have, you know, a daily podcast that we think is, you know, really innovative and how we’re telling stories in, you know, 10 minutes a day, and our audience is telling us, you know, they can’t get enough of it. So, I think that’s definitely interesting to us. You know, we just hired our first SEO editor and we’re really focused on you know, packaging our stories for social and, you know, making sure we’re we’re meeting people where they are.
Michelle Manafy
I know that social audio has been really good for you guys too. How about USA Today. What do you do?
Nicole Carroll
Well, it’s funny: I was just checking or TikTok I think we’re just checking to see how many followers I think we’re over a million somebody check me so we’re over a million and when we you know, I love it. My son’s 16 He gets all his news on Tik Tok. So whenever we show up in his feed, he’s really proud. He’s like, there’s my mom. So I mean, we’re gonna be in the spaces where people are, we’re doing Twitter Spaces, we were on Clubhouse, we were doing all the things. Really, it’s because we just want people to know that we’re there with the information they need, again, whether it’s Instagram, or Tik Tok, or a newsletter, or a podcast. And it just helps the overall reach and hopefully, you know, to your point about trust and media, if they see us enough, if they see that we’re right enough, if they see that we’re responsible enough, I want to develop that trust. And so I think it’s not just about the audience. It’s about developing that relationship and trust and like, Oh, I’ve seen you three or four times now. You know, I I know your real I know, you’re a trustworthy news source. And that’s really important to me.
Michelle Manafy
Yeah and that’s interesting, because you both mentioned, you know, being where they are.
Nicole Carroll
Yeah.
Michelle Manafy
But then your values like perpetuated values and your ethos there to build that trusted relationship.
Nicole Carroll
Well, it’s funny when the last join some of the January 6, and we made some decisions about, you know, we didn’t errors, certain of Donald Trump’s speeches, because I did, they were misinformation, and we chose not to air them live. We would go back and we would package them so we could fact check them before we did it. I actually went on Tik Tok. And I told people why we were doing that. And I did a video like: Hey, here’s we may be hearing about this. And this is why we’re doing that we think it’s important to fact check before we put information out there. So it was kind of fun to be able to talk directly to that audience
Michelle Manafy
Addressing that that demand for immediacy. Head on,
Nicole Carroll
Right, exactly.
Michelle Manafy
We want it now. But here’s why we’re not.
Why don’t you tell me each of you just very quickly, a project or product that you’ve done recently that you feel is particularly innovative?
Aja Whitaker-Moore
Sure. I mean, I think Axios local is probably our biggest project of the year. And, you know, talking about rebuilding trust, we want to meet people in their communities, and talk to them about the economic situation where they live, the lifestyle opportunities, where they live, also, the political landscapes where they live. So we’ve stood up in 17 cities, and we’re going to be in, I think, another 25 by the end of this year. So, we’re really proud of that expansion and trying to recapture some of what’s been lost in the local news landscape. And, you know, it’s really resonating with audiences, we’ve had over a million subscribers in those local markets, generated, you know, 5 million in revenue last year from loca. And so we think that’s, you know, a really big part of the future of Axios. And hopefully the future of restoring trust and journalism in America.
Michelle Manafy
No small feat.
Aja Whitaker-Moore
Yeah, just a little, just a little project.
Michelle Manafy
Just a Tuesday. How about at USA Today?
Nicole Carroll
Sure. Well, I really hope you guys will check out some of the AR we’ve been doing. And again, this leans more into the tech, but it’s really cool tech. So you can we did a series this past year on 1961 and the importance of what happened in 1961, around voting rights to what’s happening today. And our AR team built this amazing experience where you could actually ride the bus as it was being attacked by rioters and you can hear the story and you can you can you can hear we brought in historical video and audio. And you really feel like you can see the flames around you and you are really immersed in that experience. So, you know, again, we’re trying to bring the truth to people and help them understand news that empathy that you get from immersive storytelling is really important. Not just reading it; you’re experiencing it. So really proud of some of the work we’ve done on AR.
Michelle Manafy
That’s a great example. Just before we’re done here: How about something that you think that everyone is talking about in media right now, that maybe is hype or that maybe you’re a little skeptical about?
Aja Whitaker-Moore
Just in general?
Michelle Manafy
In the digital media industry. Hype cycle?
Aja Whitaker-Moore
I don’t know,
Michelle Manafy
Alright, we can do NFTs? [laughter]
Aja Whitaker-Moore
Well, we do have a newsletter that covers crypto and I think we do talk about that, you know, quite a bit. And NFTs have their place in the crypto world.
Unknown Speaker 15:48
Oh ho ho. No, it doesn’t have to be NF T’s. Metaverse can do another one. You guys bullish?
Aja Whitaker-Moore
I mean, I think the Metaverse is interesting. If you think about it from the standpoint of like, we’re just building it now. You know, we don’t actually know what it’s going to be.
Michelle Manafy
Is it going to be the Facebook-averse. Is that? Or is it going to be an open platform?
Aja Whitaker-Moore
I guess it depends on who you ask.
Michelle Manafy
We’re not going to ask Mark. Apparently, he didn’t want to talk to us about this.
Nicole Carroll
Which is weird. So weird. I mean, I think we just have to keep moving forward. Like I said at the beginning in all these spaces, and here’s the cool thing, we get to invent them, right? We get to say what they’re gonna be. So that’s awesome. We’re like, you know, I know, there’s a lot of stress in media right now. But I’m really excited about where we’re at right now in media, we’re, we get to invent the future. And that’s pretty cool.
Michelle Manafy
All right. The very last thing: leadership, like if you are looking out into the industry, and you want to just impart one piece of wisdom about leading an innovative team, no pressure. Aja: pressure.
Aja Whitaker-Moore
I mean, I think it’s really just about having a culture of activation and being able to experiment with an idea and nurture it from experiment, you know, to fruition. I think we do that, you know, every day at Axios. And really, every day in media. Every day, we’re writing a story. It’s like, you know, where’s this going to take us at? Where’s this gonna go? And just continuing, you know, to do that?
Michelle Manafy
I love that.
Nicole Carroll
Yeah. I think it’s all about the people. No matter what you do, you’ve got to create the culture. You’ve got to believe in people you’ve got to have, I think I call realistic optimism. We are in a tough world. But you realistically have to think “we can do these things.” And you have to impart that to people. You have to have a culture of “yes, let’s try it.” What can you do? What can you do in a month? What can you do in two months? We have to keep moving forward.
Michelle Manafy
Love it. Well, thank you both. I sincerely appreciate this. It was a great conversation and went to fast.
Leilani Han Executive Director of Commerce, Wirecutter
Affiliate marketing is a dynamic endeavor, with myriad factors driving strategic decisions on how to sustain a healthy revenue stream while maintaining consumer trust.
In this Q & A, Leilani Han, Wirecutter’s executive director of commerce, shares her insights on strategies driving Wirecutter’s success.
DCN: There appears to be a renewed or intensified interest in affiliate marketing as a revenue diversification strategy. How do you see it?
Han: There’s always been a keen interest in affiliate marketing, but the space has certainly evolved with who was investing in the channel over the last 10 years. In our space, we’ve seen many media companies realize this was a smart strategy for engaging with your audience more deeply while providing a service to them that could evolve into a revenue stream.
This coincided with an evolution in the consumers’ relationship with their shopping journey. Affiliate has the unique capabilities of encompassing all channels so that it fits in perfectly with social media, the internet, and being able to provide greater value to people’s lives.
Wirecutter has been at the forefront of this trend, as we helped to prove to others this model could scale successfully. Today, millions of readers turn to Wirecutter’s advice for inspiration and making smarter shopping decisions.
DCN: What is your company’s approach to affiliate marketing, content/commerce mix, video, social?
Han: Our recommendations – and affiliate marketing – have always been at the core of our business since its 2011 launch. While we’re technically classified as commerce content, we don’t separate our work into content or commerce. We are simply focused on providing the best service journalism to our readers.
Compared to competitors, we are not in the business of worshiping products. We are in the business of helping users find out what is worth paying for and what is the best product for the price. We employ a journalistic, methodical process to uncover the right information.
We make a recommendation – not just a review. We communicate in a way that is relatable and direct – not academic. Wirecutter cuts the time and stress of shopping by providing direct and actionable buying advice.
We knew if we took care of the reader experience and prioritized their trust in us above all else, the monetization follows. That’s an indication we’re hitting the mark on being helpful to them. That’s a balance we have to strike to serve our readers and our ability to monetize. Our team does a great job of finding that balance.
As digital innovation has evolved over the years, so have the channels through which we can reach our audiences. We view video and social media as another way to introduce new readers to our advice while reaching them in the moment in the spaces where they’re organically spending their time.
DCN: What are the driving factors underscoring where to put the efforts?
Han: Our core mission is to serve our readers with helpful advice and earn their trust. Our recommendations are at the center of our efforts. We try to be thoughtful about how we engage with our audiences and whether we’re successful in meeting their needs.
We aim to be as impartial as possible from any business interests. Our approach is being transparent through every point of the user experience.
The affiliate model aligns well with our reader service mission because we do not earn commissions if we are not successful in earning trust and making the right recommendations. A successful affiliate business is a clear indicator we are doing right by the reader. The data helps inform us whether we’re meeting the mark on what readers need advice on and what to buy.
Han: One of the biggest challenges at the beginning is figuring out what resonates with your readers, how you can gain traction with them to return and click through to purchase, and then scaling that in a way that honors your service for your readers. While affiliate marketing can be a very meaningful revenue stream, it is not as turnkey as some other channels. It requires time, effort, and a lot of testing to eventually find the sweet spot of your editorial voice and how to monetize effectively.
Another challenge is in how to strike the right balance between sources that are key drivers of your business and ensuring you’re diversified enough to withstand changes that are outside of your control.
One example of this for Wirecutter is organic search and the ever-changing algorithms that can impact how much traffic is coming to your site.
Last fall, we launched a subscription product because we know that our journalism is worth paying for and we are focused on deepening our relationship with our readers. This allows us to reach these readers directly and lessen our reliance on other traffic sources to bring readers back to Wirecutter. So far, we are seeing positive results that confirm our belief that Wirecutter’s service journalism is a meaningful resource in people’s lives.
Despite our priority to grow our subscriber base, we are continuing to focus on our affiliate business as well. Our affiliate business model remains unchanged. If you click a link on our site and buy something we recommend, we may receive a commission.
As always, our writers and editors are never made aware of any business relationships we have with retailers. We’ll continue to make picks independent of all business and financial interests. Those things will never change: helping readers make the right buying decisions will always come first.
The change happening with browser updates and privacy regulations is also top of mind for many publishers and what the deprecation of cookies means for the industry. Many of the major affiliate networks have been addressing this by updating their tracking technology to help mitigate any losses from these changes, while Wirecutter has proprietary technology that has also helped us to mitigate any loss.
As the world learns from Australia’s news media bargaining code that has reportedly driven $200 million of funding to news organizations, a whistleblower revealed the tactics to try to stop other nations from importing and building on it. This panel featured the CEO of the whisteblower’s law firm, an advocate for the digital future of news organizations, and a member of Parliament working on new laws to create a more competitive market.
Held June 23, 10:45-11:05am ET at The 2022 Collision Conference in Toronto Canada
Jason Kint, CEO, Digital Content Next Libby Liu, CEO, Whistleblower Aid Nathaniel Erskine-Smith, Member of Parliament for Beaches – East York, House of Commons of Canada Alex Kantrowitz, Founder & Editor-in-chief, Big Technology
Earlier this year, Tubi forecasted that free streaming audiences would grow more than paid streaming by mid-2022. Fast-forward to comScore’s new State of Streaming 2022 Report, which backs up this prediction. The comScore data shows that consumers are adopting ad-supported streaming services faster than non-advertising supported streaming services (29% vs. 21% over the last three years). comScore’s analysis uses 13 million Smart TV devices from two primary Automatic Content Recognition (ACR) service providers.
Streaming is thriving, and the industry forecasts continued growth. Even while Wall Street questions the performance of streaming brands and their less explosive growth since the pandemic, subscriptions and viewing time continue to grow.
The overall market for subscription video on demand (SVOD) is substantial. The new PwC Global Entertainment & Media Outlook 2022–2026 projects that the 2022 SVOD marketplace in the U.S will generate $25.3 billion, up 13% from last year. PwC projects this segment to reach $33.6 billion by 2026, representing a conservative growth rate of 8.5% compound annual growth rate from 2021-26.
Subscriptions per household are growing watching watched 5.4 streaming services per month as of March 2022, compared to 4.7 in March 2021. In March 2022, the “Big Five” streaming services (Netflix, YouTube, Hulu, Amazon, and Disney) became the “Big Six,” now including HBO Max. The Netflix audiences overlap with 82% of the other top six streaming services, especially Amazon (66%) and YouTube (66%).
Big 6 services
According to the PwC’s report, global SVOD subscriptions will increase by 485 million between 2021 and 2027 to reach 1.7 billion. The six US-based platforms will have 988 million paying SVOD subscribers by 2027, up from 612 million in 2021. PwC views Netflix as the revenue winner, with $34 billion by 2027, similar to Disney+, HBO Max, and Paramount+ combined.
Device market share
Connected TVs (CTV) are the largest segment of streaming devices at 137 million in 2022 compared to 114 million in 2020. However, Smart TVs are the fastest-growing segment of streaming devices, up 48% YOY from 38 million in 2020 to 56 million in 2022. While Samsung has the largest market share among Smart TV manufacturers in 2022 at 26%, it declined from its high of 31% in 2020. Other top manufacturers include Alcatel/TCL at 15% market share in 2022, down from 14% in 2020, and Vizio at 14% in 2022, flat compared to 2020.
Eight in ten (79%) of Wifi-enabled homes watch streaming content on connected TV devices. Each of these households spends approximately 122 hours per month streaming, an increase of 19% from March 2021. Of all services, Netflix captures the most hours per month watched at 43 hours, followed closely by YouTube at 39 hours and Hulu at 33 hours.
It’s essential to distinguish the terms CTV (connected TV) and OTT (over-the-top). CTV is the device that connects to or is embedded in television to stream video content. It’s the hardware – Smart TVs, gaming consoles (used to stream video content), Roku, Amazon Fire TV, and Apple TV. OTT refers to content viewed over the internet.
Diversifying audience growth
Diverse audiences now account for more than 40% of Wifi-enabled households viewing connected TV content in the U.S.
Hispanic audiences, the largest segment of diverse homes that stream, over-index for Netflix, YouTube, FuboTV, and Sling.
African Americans over-index for Amazon, FuboTV, YouTube, and Pluto in terms of the streaming platforms viewing days per household.
Asians over-index for HBO Max, Hulu, YouTube, and Sling.
Analysts question how the SVOD market will continue to grow. Many believe teens and Gen Z will drive the market as short-form video platforms like TikTok move into longer-form content. Others suggest the SVOD platforms will increase as more countries gain broader internet access.
New partnerships, mergers, and more offerings will likely continue marketplace growth. The consumer needs to be front and center as competition grows to evolve an individualized and personalized user experience.
The U.K.’s DMG is a media heavyweight by most measures and the group’s Daily Mail ranks close to the top on any chart for online newsbrands. In terms of web traffic, it places fourth in the U.K., 10th in the U.S. and sixth globally according to the U.K.’s Press Gazette.
At the FIPP World Media Congress in Portugal earlier this month, the U.K. news giant outlined its adoption of a “launch everyday” philosophy that, surprisingly, owes a lot to the paper’s print heritage. The result was a 300% increase in subscriber numbers in just two years.
Product director Simon Regan-Edwards was unable to travel, but Denis Haman of CMS supplier Glide stood in to explain how the Mail+ team brought a print mindset to the evolution of the Mail+ subscription product first launched in 2013.
Mail+ began by replicating the newspaper experience online. Between its launch in 2013 and 2020, Mail+ secured 40,000 subscriptions as a digital replica available across multiple devices, including Kindle and Amazon’s Alexa.
In March 2020, the decision was taken to begin building out the Mail+ offering and by June 2022 it had 120,000 subscribers in total, with 76,000 digital only subscribers. This level of growth is impressive in itself, but even more so considering the free-to-access Mail Online site sits alongside it.
Two years, nine updates
Over the two years between the end of 2019 and the beginning of 2022, the Mail+ team delivered nine major updates.
These started with the introduction of briefings and newsletters and the addition of content in areas where the audience wanted to see more — TV and radio, food and health. Mail+ today incorporates Best Of sections, ListenTo functions and puzzles.
Moving through a homepage rebuild and a new storefront to improve the subscriber sign-up journey, Mail+ then made the shift to an edition-based format with three daily updates.
Additional releases have since brought author and category pages, new sections, and enhanced search functionality. More recently, the team implemented a second home page redesign to pull together a unified Mail+ offering.
“It’s been actually incredible to watch,” said Haman, “The Daily Mail team has managed to work and rework the product and reconfigure what it means to the customers. I have rarely seen a product move at such a pace and reinvent itself repeatedly.”
Haman began by exploding the misconception that a print foundation will slow digital development, arguing that print is possibly the most agile of all content channels.
“It gets destroyed and remade every single day, with the opportunity to redraw it, reshape it, rework it. And it has to hit the deadlines,” he explained. The Mail digital team brought that print mindset to the rebuilding of Mail+. That meant launching “every day, every week, every month.”
Of course, digital is not the same as print and Haman noted that there are “sensible limits” to digital development, meaning everything takes more time than you might think. Quoting Alan Hunter, former head of digital at The Times, Haman said: “This means you won’t be asking for a new product feature on a Tuesday and expecting it to be in the app by Friday.”
Crucially, the Mail digital team was given license from the very top to keep going until the right formula was found for Mail+. From that foundation and armed with audience data that suggested there was a real interest in the evolving subscription product, the team built quickly following a rigorous framework for decision making.
Ask what problem you are solving
Haman described the sweet spot for innovation between visibility, viability and desirability. He said it was important to be disciplined in asking key questions. Do customers want the features you are developing? Are they financially viable and are they technically possible with the available resources?
“It’s really important to fall back on the process,” said Haman. “If you’re under pressure you can easily find yourself jumping to conclusions.”
Data is crucial in building insight into what is building habits and why people do what they do. But Haman said it is also important to be open to new voices. He highlighted customer-service teams, sometimes overlooked, but often a powerful source of knowledge into what motivates or demotivates readers.
Data also avoids the HIPPO trap — the Highest Paid Person’s Opinion. Haman explained, “without data, it’s just an opinion.”
Networked teams bring together diverse groups with different perspectives and different skills, all the disciplines needed to launch a product. It’s important to give everyone access to the data to understand how it relates to revenue, engagement, and readership.
Haman emphasized the importance of giving everyone on the team a voice, and making sure that they are truly engaged in asking “What problem are we solving?” However, he took care to explain that although everyone should have a voice, “not everyone makes the decisions.”
Be realistic
To separate “should” from “could” and focus on priorities, the Mail+ development team used the MoSCoW methodology:
Must have
Should have
Could have
Won’t have
This helped the development team move faster and, crucially, get data back quickly to provide valuable insights for moving forward.
The team used digital tools across functions to “dig into” designs before development started. Haman compared this to making sure your architect’s plans are solid before starting to build; it’s considerably cheaper to revise plans than tear down half the house to make things right. Then lock designs to prevent changes at the 11th hour. “I love the fact that they would laminate designs,” he said. “It’s genuinely locked until it is released.”
The elegant exit
Andy Grove, former CEO of Intel, said it is important to act on your temporary conviction as if it was a real conviction; and when you realize that you are wrong, correct course very quickly.
Data, again, provided insight to what was working and what wasn’t for The Daily Mail. And if something wasn’t working, Haman said it was important to ignore the sunk cost fallacy — that we have spent all this money and we have to make it work. He explained, “If it’s going in the wrong direction, you need to be brave enough to cut your losses, pivot, or rather elegantly exit and move to a new direction.”
Regan-Edwards made a guest appearance at the end of the session via Zoom and I asked him if he thought at the start of the project he would make nine major updates in two years? He said, “No, but I think what we learned through this whole process is don’t predict what’s coming in two years time, focus on what are we delivering for this next quarter. What makes sense in this next quarter? What do we want to do in the quarter after that?”
He also re-emphasized the importance of being led by feedback from customers. “We have a big focus on puzzles,” he said. “That’s come from the feedback of how people are using the product.”
And finally, he said, overcome the “moonshot mentality” that says, “We’re done now, let’s put it in the cupboard. Instead, get into the mentality that you want to constantly improve.”
The state of identity in ad tech is overwhelming. The number of proposed solutions for the end of the third-party cookie seems to be endless, with new ID providers, clean room solutions, and cohorts popping up every week.
But for any of these potential solutions to work in practice, they need to be adopted by both advertisers and media owners. They also need to be supported by the platforms enabling those two parties to trade. Figuring out who’s taking the lead on those initiatives, or how readily available and scaled some of those potential solutions are can be difficult.
To help buyers and sellers answer these questions and more, The MediaGrid team analyzed more than 195 billion bid requests globally between January 2022 and May 2022. This provided insight into the adoption trends of various identity solutions and how the industry is progressing towards the end of third-party cookies.
The methodology employed to analyze the bid request data examined the User ID Module availability within publishers’ Prebid.js package for supply coming through our platform. Within the bid request, a number of inventory parameters were investigated, including: domain, time of impression, and various user data signals, including IP address, pixel tags, cookies, and UIDs. In addition, available providers were classified into ID solution types, such as deterministic, probabilistic, cohort, and ID resolution frameworks.
Here’s what we found.
A continued reliance on third-party cookies
We all know that the third-party cookie is set to expire for good sometime in 2023. We also know that marketers, publishers, and platforms have been toiling for quarters to find a suitable replacement that maintains measurability and performance without sacrificing accuracy or media planning sophistication.
Given this known timeline, we’d expect to see buyer reliance on third-party cookies for ad decisioning begin to wane, and shift to alternative solutions. However, the data shows otherwise.
In the first five months of 2022, nearly 60% of all winning bids included third-party cookie matches as the core addressability component of their decisioning logic, compared to 28% for alternative IDs, and 10% for non-addressable solutions, like contextual targeting and audience cohorts (figure 1).
Figure 1
What’s more surprising, though, is that publisher reliance on third-party cookies appears to be increasing as 2022 goes on. Looking at the data set, the percent of bid requests that were passed to buyers that included third-party cookie ID as the sole addressability signal grew from 39% in January to 49% in May, while the same metric for other solutions either remained stable or declined (figure 2).
This, in addition to the exclusive presence of third-party cookies in winning bids, suggests that the use of third-party cookies to operate the buying and selling of media remains widespread. It seems that both publishers and advertisers will continue to leverage the cookie for as long as it is available to them. At the same time, it appears that experiments aimed at finding suitable replacements for the cookie aren’t progressing at the rate we’d expect, given the potential impact its deprecation will have on performance, measurement, and yield.
Figure 2
Multi-solution publisher tactics
When we look further into the variety of identity targeting solutions used, it’s clear that publishers have been taking steps to leverage multiple solutions when passing bid requests to buy-side partners.
This year, of the publishers actively working with these alternative ID solutions, 74.3% are testing at least two at a time (figure 3). On closer examination, domains with higher traffic volume tended to support on average four different ID solutions. These can include a mixture of third-party cookies, deterministic, ID resolution, and other solutions such as cohort, contextual, etc. This indicates, unsurprisingly, that the larger, more sophisticated (or resourced) publishers are currently being a bit more aggressive with their addressability experiments.
Figure 3
Where do publishers go next?
Looking at the results of our research, perhaps we shouldn’t be too surprised.
In a perfect world, we’d see the use of third-party cookies slowly drop off and be replaced by cookieless alternatives. Alas, we don’t live in a perfect world.
In fact, media traders will most likely continue to use third-party cookies until the very end. After all, they’re a proven revenue stream with decades of inertia behind them – so why not make hay while the sun shines?
That said, there’s more than one use for third-party cookies as we approach the deprecation deadline in 2023. Smart publishers might choose to leverage these cookies as a comparison tool, judging their effectiveness against identity solutions and alternative IDs. Using techniques such as A/B testing, publishers should be able to assess which identity and addressability techniques create value for their campaigns. From there, they can hit the ground running when third-party cookies take their last bow.
The use of multiple identity vendors is also a logical step for publishers.
In order to navigate a post-cookie world, buyers and sellers will need to adopt multiple solutions, leveraging different combinations of tactics to satisfy advertising objectives. When it comes down to it, digital buyers and sellers will need to know which solution will work best for which channel, targeting strategy, and goal – none of which is an easy task.
So, what should be next on a publisher’s agenda?
Test, test, test…
If you’re a publisher looking for a key takeaway, here it is: test as many solutions as you can, as soon as you can.
By doing this, you can directly compare if cookieless solutions are able to maximize yield and package audiences at the same level as third-party cookies before third-party cookies are officially retired. And while that is easy to say, with the myriad solutions in the market today – from the various Google Sandbox solutions to alternative IDs, contextual and cohort solutions, cleanrooms, and more – how should publishers test the different solutions?
Finding that optimal combination will require a robust testing program which can plan and execute campaigns using various post-cookie approaches alongside current cookie-based methods. Publishers need to work with a flexible technology partner that can help plan, test, and activate your post-cookie targeting and activation strategy.
Publishers will need support for:
Market-viable Privacy Sandbox initiatives for those planning to use Google as a trading partner.
All major universal IDs currently passed in the bidstream, testing to see which are the most valuable for your business.
First-party data onboarding and activation.
Contextual solutions.
And this is to say nothing of all of the reporting and technical support needed to integrate and activate these services. Publishers will need to work closely with a vendor who is able to address all these concerns using the broadest range of post-cookie alternatives available to the market.
A lot of this may sound like doom and gloom, so here’s the good news: time is on your side.
Because alternative IDs can now be found in a quarter of all bid requests, now is the time that publishers should prepare for the cookieless future.
So what are you waiting for?
About the author
Megan Sullivan-Jenks is Sr. Product Marketing Manager for IPONWEB’s The MediaGrid. A self-proclaimed tinkerer, Megan’s a problem solver for marketing and product enablement strategies and execution. From nonprofits to consumer goods and software, she’s an expert in translating the complex to tangible marketing and communications strategies that focus on results. Outside of the office, Megan rolls up her sleeves to enjoy all things DIY like sewing and woodworking.
The media industry is undergoing a massive transformation due to rapid technological disruption, changes in global privacy regulations, as well as increased audience fragmentation. Compounding these factors is the cookie deprecation, leaving brands and media buyers exploring new ways to place their messages in front of target audiences.
To drive advertising campaign success, brands and media buyers need to holistically consider the ad experience while factoring in contextual suitability.
Prioritizing contextual suitability
Contextual advertising, or the ability to optimize an environment with aligned messaging for maximum impact on target audiences, is arguably one of connected TV’s (CTV) most important capabilities. The ability to place ads in or around content with relevant messaging to leave a positive imprint on consumers strengthens both brands and publishers – if done correctly.
Most buyers and marketers understand contextual advertising on a basic level. Consider a hospitality brand looking to attract young and trendy professionals. They may consider placing an ad in a TV episode which features a road trip or spring break vacation in its storyline. This is a great first step in building a relationship with its target audience – but it’s not the end. When it comes to the precise alignment of messaging with target audiences, you can’t speak about contextual suitability without mentioning brand suitability, and by extension, brand safety.
The characteristics that make content suitable for a brand – or a brand suitable for the content – is totally subjective. A good place to start is a company’s mission and brand story. While programming with risqué content may be a fit for an adults-only resort, it may not be for another that boasts vacation packages for the whole family to enjoy. These types of guards are not only fair, but are recommended when it comes to protecting brand safety, and should be vetted with an advertising partner. The subject of contextual suitability and brand safety are especially important in these times when brands may want to shy away from any references to COVID-19 or divisive politics.
In this same vein, publishers have a vested interest in protecting their brand identity. This can inform their decision to work with certain advertising partners over others. Advanced television viewers continue to tune into programming from specific media companies, channels, and shows because they trust that the whole viewing experience will be tailored to their interests. Additionally, publishers need to ensure the execution of advertisements are cohesive, well-placed and run at the right frequency to keep viewers tuned in.
Marketers should also refrain from thinking about content in silos. Unlike linear TV, advanced television allows media buyers to effectively buy audiences and not just a singular show. When marketers step back to get the full picture, they will begin to analyze the typical audience and viewing patterns of a show and use this data to better inform media buying strategies.
When prioritizing contextual suitability, media buyers can opt to buy into a carefully selected list of shows or content metadata that has been tagged with specific keywords, as opposed to buying the full portfolio of a media property. Using the combination of audience and contextual targets allows both publishers and advertisers to connect at a deeper level.
Keeping viewers tuned in
It is not a secret that the last couple of decades have introduced many new technological innovations that occupy our time and attention. However, therein lies advertisers’ dilemma. Imagine you’re watching a TV show, whether it be on demand, live, or on an ad-supported streaming service. When the show goes to break and the commercials begin, what do you do? Most likely, you fast-forward through them if you’re able, take a bathroom break, or divert your attention to your phone.
With so many ways to occupy our time, we spend it on what we consider to be enjoyable. Maximizing enjoyment and pleasure is something that marketers take into account when using contextual suitability to strategically place advertisements into content. When relevant ads are thoughtfully and strategically integrated into content, consumers will begin to engage with the ad as opposed to simply tolerating it. This is how advertisers can effectively contend with various distractions and devices that are also competing for its audience’s attention.
Perhaps the most important element of any advertisement is the storytelling format, which can be specifically tailored by advertisers to fit the content. Depending on the given context of where the ad is being placed, advertisers are able to change the mechanisms of the narrative in order to maximize its relevance. For example, in news surrounding politics or global health, the message can be focused on supporting the organization delivering the content, reminding audiences that “we’re all in this together.” Advertisers also have a myriad of digital tools, such as QR codes, as well as psychology-backed formats that are proven to optimize and drive deeper engagement.
Driving a higher ROI
Due to advances in CTV technology in recent years, contextual suitability allows marketers to get the attention of high-value audiences where they want to be. Attention equals profit. But attention alone is not enough. A product needs to be seen in an optimal environment to leave a lasting and positive impression on target audiences.
In order to capitalize on the advantages of contextual suitability, marketers need to work with advertising partners that can provide deep and holistic insight into target audiences. The status of today’s current media landscape calls for relevant and seamless ad experiences that resonate deeply with consumers.
About the author
Mike Richter is the Vice President of Global Revenue Operations, at TMB, comprised of sales operations, ad operations, and programmatic revenue. TMB is a leading global media company that reaches hundreds of millions of consumers via our dynamic portfolio of media properties. He offers best-in-class insights and data-driven marketing solutions that reach engaged communities across food, home, lifestyle and wellness content.
The newsletter gold rush is well under way. Media companies large and small are focused on their newsletter strategies. And the frontier towns of Substack, Revue and Ghost are packed with hopeful writers and journalists hoping to strike a rich vein of subscribers. But—as with real world gold rushes—there will be big winners and a wider array of also-rans, whose grand plans didn’t pan out.
Just as we are progressing from web2.0 to web3, the editorial newsletter has moved to the next level, driven in part by the emergence of integrated platforms. While the email inbox is still the destination for the final product, the ability to integrate sign-ups across social platforms and dedicated newsletter ad tools have propelled the medium to its next stage.
Between the development of those new tools and the recognition that completable, digestible news formats have value in the constantly updating nature of digital news, it’s small wonder that so much time and effort is being poured into newsletter strategy. And, driven in part by the pandemic, last year saw a raft of newspapers and magazines doubling down on newsletters for community development and revenue purposes.
The revenue models
Paid subscriptions to Substack’s newsletters exploded to more than one million late last year. Mid-2019, that number was closer to 50,000. And it isn’t just the newsletter platforms that have reaped the benefits of a bumper year for sign-ups.
The New York Times, which has around 17 million subscribers to its newsletters, announced last year that it is to make a third of those subscriber-only. Its decision around which were to be paid-for products was based largely on which newsletters it saw as being better for discovery and which had revenue potential. Its editorial director of newsletters Adam Pasick attributed that potential to growth in newsletter sign-ups from people desperate for news about the pandemic and the U.S. election.
Of course The New York Times is not alone. Organizations like The Financial Times and Axios also so their investment in newsletters pay off during the pandemic.
Perhaps the best measure of the maturation of the space is the level of experimentation that has gone into newsletter revenue strategies. Mel Magazine, buoyed by subscription success, launched a trio of paid-for newsletters in March 2021. In January of this year, the newsletter Dirt launched DirtDAO which allows its subscribers to use branded NFTs to vote on and commission stories for its writers.
On the other end of the scale, the Manchester Mill is a local newsletter published to a few thousand people in a Northern UK town. Its founder Joshi Hermann told me that 2020 and 2021 outpaced his expectations for signups: “In the first year, we’ve picked up just over 1000, which is really promising, probably slightly more than I expected given the notorious difficulty of building up subscriptions in the first place for massive content and stuff. So, I’m really delighted with that.”
Beyond paid-for newsletters, ad-supported formats are increasingly popular. Andreas Jürgensen, CEO and co-founder of newsletter ad platform Passendo, said: “There’s… a whole resurgence of publishers who are email first, and are basically building strategies around email. Then web becomes secondary, or might not even exist in the mix for them. These guys have seen the light, in regards to this as a trusted channel of the future.”
But that gold rush can’t last forever. There is increased competition amid a range of newly launched newsletters from individuals and newspapers alike. With a potential impending economic crunch, sponsors and advertisers will have to cut spend, and the public won’t necessarily prioritize newsletters. So while publications might be looking to newsletters for post-Covid revenue growth, they will have to contend with growing headwinds.
However, as bad as that might be for major publishers, it will be far worse for individual newsletter creators.
Squashed by the giants
Larger publications have the resources to keep newsletters going through a slump or take the time to transition the strategy, such as for discovery over direct revenue. Individuals who have launched newsletters will be first to feel the pinch.
Neal Freyman is managing editor of Morning Brew, which preempted much of the discussion around newsletters as an editorial product when it launched in 2017. He explains: “I think it was a bit of a pandemic blip kind of thing, as we’re seeing a lot of the pandemic winners kind of fall back to Earth.
“It’s an insane amount of work to put out a newsletter every day. So, I do think you’ll see the level of individual newsletter creators fall back down to earth and realize that you know, a support system is really needed. You might see some of these writer collectives start forming, but then you’re basically looking back at a media company, again, with sales and all that.”
One early piece of evidence for that was the closure of a long-running freelancer-focused newsletter in the UK. In the announcement, the sole creator Anna Codrea-Rado noted: “There are lots of reasons for this difficult decision, but they can be summed up quite simply: it’s just not working. Most pressingly, the maths doesn’t add up anymore. The number of paying subscribers isn’t high enough to make this one-woman newsletter business sustainable anymore.”
Some of that pressure comes from the fact that the majority of consumers who choose to be informed through newsletters signed up via major publications rather than individuals. According to the latest Digital News Report only 16% of that cohort are signed up to newsletters run by individuals. Meanwhile, 53% are signed up via “mainstream media organizations.”
The Report also notes that, to some extent, the newsletter boom is a US-centric trend: “The ‘Substack revolution’ for news is still primarily a U.S. phenomenon and it is not guaranteed to catch on elsewhere, especially given the difference in market size and context.” It is notable that most of the non-U.S .publications that launched paid-for newsletters did so with modest aspirations in terms of subscribers: Mel Magazine’s three paid-for newsletters had a goal of 10,000 subscribers within their first six months.
The outlook for individual-based newsletters, then, is iffy and exposed to volatility in the wider economy. But for bigger publications, newsletters are set to retain their primacy as a tool to entice readers into their ecosystems. There might the massive market for subscription newsletters the industry might hope fore. However, newsletters still offer unmatched value as a way to connect with audiences and add value for subscribers.
/ An inside look at the business of digital content
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