Faster, Shorter and Electric: Media CROs Reset Ad Expectations for the Second Half of 2023

Despite cautious optimism, few executives expect a substantial turnaround

Mark your calendar for Mediaweek, October 29-30 in New York City. We’ll unpack the biggest shifts shaping the future of media—from tv to retail media to tech—and how marketers can prep to stay ahead. Register with early-bird rates before sale ends!

As the advertising industry rounds into the back half of the year, Adweek spoke with a dozen revenue executives at premium publishers to get a sense of the next six months.

The first two quarters of 2023 have been, largely, brutal, as uncertainty from advertisers has forced publishers to seek cost-savings in cuts, reductions and closures

While demand for open-market programmatic has faltered, publishers have compensated by investing in their custom offerings, working collaboratively with fewer clients on more integrated campaigns.

Overall, the outlook remains conservative, with bright spots like the resurgence of auto advertising counterbalanced by emerging concerns over generative AI and privacy disruptions.

Resetting expectations

Compared to the same time last year, media executives are optimistic about the ad market in the coming months.

The chief bogeymen that concerned marketers last summer—the war in Ukraine, the threat of a U.S. recession and lockdown protocols in China—have settled into more manageable concerns, said Condé Nast global chief revenue officer Pamela Drucker Mann.

Still, few publishers expect the uptick to compensate for the past six months. But demand varies wildly by category and publisher.

I’m not expecting that optimism to turn into business in the second half of 2023.

Jason Wagenheim, CRO at Bustle Digital Group

For instance, The Atlantic, whose advertising revenue for the first half of 2023 stayed flat year over year, booked more business in June than it has since 2018, according to publisher Alice McKown. And at The Guardian U.S., the company finished its fiscal year—ending in March—with advertising revenue up 40%, according to senior vice president of advertising Luis Romero.

Other publishers, however, have been forced to re-forecast in light of continued softness in ad demand, especially ones that rely on traffic from social platforms or work primarily with technology and financial service brands.

“Candidly, we have to reset the expectations for the second half,” said one executive. “You ladder up from the bottom, but the bottom keeps moving.”

Overall, the general economic climate is healthier now, said one executive, but that optimism is unlikely to result in substantial upticks in spending this year.

In fact at Cannes, most conversations were focused on targets 12 to 18 months from now, according to BDG chief revenue officer and president Jason Wagenheim.

“I’m not expecting that optimism to turn into business in the second half of 2023,” Wagenheim said.

Auto and travel are up, tech and financial still lag

Trends in category spend have remained largely consistent: luxury budgets continue to grow, while technology and financial services continue to waver.

But two categories—auto and travel—have picked up substantially for publishers in a position to capitalize on them.

At The Atlantic, auto advertising revenues have risen 350% year over year, while travel has increased 810%, according to McKown. Similarly, BDG auto-delivered 10 times more revenue in 1H 2023 than the year prior, according to Wagenheim.

These increases have been largely driven by an increase in spend from electric vehicle manufacturers and consumers’ pent-up demand for travel, according to Josh Stinchcomb, the chief revenue officer at The Wall Street Journal. 

“Auto is back in a big way, with a renewed focus on electric vehicles and more broadly, the future of mobility,” Stinchcomb said.

Experiential and video demand has risen, while audio cools

While executives stressed that clients continue to prefer multichannel campaigns, two mediums—experiential and video—remain high-growth areas.

At BDG, experiential accounted for 20% of its revenue mix in the first half of the year, compared to 2% the year prior, according to Wagenheim.

The channel has proven so promising for news startup Semafor that it has doubled the size of its events team and shifted its revenue mix from 75% advertising and 25% events to a 50-50 split, said chief revenue officer Rachel Oppenheim. The publisher also hired a global head of SemaforX, Jamie Drogin Lehman, on Monday.

Meanwhile, demand for premium video offerings continues to skyrocket, according to Mann. In response, publishers like Condé Nast, Insider and Bloomberg Media have worked to make their on-site video offerings more visible and their targeting capabilities more granular.

“We’re seeing that brands are looking for data usage opportunities, video advertising and video integrations,” said Bloomberg Media global chief revenue officer Christine Cook.

Demand for audio inventory, however, has slowed, according to three executives. 

“There was a moment when was in every RFP, but we’re not seeing that as much anymore,” said one CRO.

Advertisers want custom content with turnkey timelines

Publishers’ custom content is enticing to marketers, but brands increasingly want lookalike products with shorter production timelines.

One publisher has reduced its production time for custom content by 20% to 30% this year to meet these preferences, while others have introduced new hybrid products.

Insider, for example, has promoted an in-house video solution that offers the customization of a studio product with the turnaround of a content sponsorship, according to chief revenue officer Maggie Milnamow. Rather than two months, the videos take just one week.

Likewise, The Financial Times has increased digital display revenues 12% year over year in part by offering clients “content-like experiences” that avoid the sign-off bureaucracy of sponsored executions, said Brendan Spain, vp of advertising. 

The Guardian U.S. has trumpeted a similar offering, called in-development sponsorships, which use an editorial liaison to share forthcoming story ideas with relevant brands, according to Romero.

Closing takes longer, execution has sped up and deals are shorter-term

Publishers universally echoed the sentiment that marketers’ precautions have extended the planning cycle while shortening the execution timeline.

Across the Hearst portfolio, advertisers continue to buy more last-minute and shorter campaigns, said global chief revenue officer Lisa Ryan Howard. Axios’ chief business officer Fabricio Drumond shared the sentiment, saying the publisher has seen an increase in short-term commitments.

At BDG, sales cycles have shrunk to between 35 and 40 days, compared with 60 days 12 months ago, said Wagenheim.

These challenges stem from an increased pressure on marketers to showcase their return on ad spend, and the heightened scrutiny means more personnel are involved in approvals. In some instances, CEOs themselves are signing off on investments, according to one executive.

“The presale cycle is long, but the time between commitment and execution is short,” said Lindsey Abramo, the chief executive of World of Good Brands. “So agility [is crucial] in getting up and running quickly to keep dollars in-quarter.”