AI, the Election and Cautious Optimism: 12 CROs on Ad Trends Shaping 2024

The last few weeks have been brutal for the media industry. Still, a confluence of positive factors has publishers cautiously optimistic about the year ahead, according to interviews with revenue executives at more than one-dozen news and lifestyle publishers. In particular, the broader economic outlook appears far healthier than it did this time last year, and advertising demand for key channels—including energy, luxury and healthcare—has remained resilient or showed encouraging signs of recovery. Specific channels, including events and newsletters, continue to attract agency and brand interest. At the same time, first-party data offerings have become more valuable amid the continued loss of targeting signals across the open web. The Next Era of Subscriptions: 3 Trends Shaping Publishers' Paid Products Yet, the forecast is far from rosy. The specter of artificial intelligence threatens to upend key tenets of the industry, while uncertainty surrounding the presidential election could chill advertising efforts. Declining search and social traffic are shrinking audience reach, and budgets continue to migrate toward performant channels like retail media and connected television. “What I’m concerned about is that the business is fundamentally changing,” said one news publishing executive. “We have been overly reliant on third parties, both for traffic and monetization. This will be a big year for wrestling back that ownership and being more prescriptive about building our own channels.” What buyers want Shifts in buying behaviors, particularly gravitations toward multichannel packages and a growing aversion to poor inventory, are set to increase the percentage of ad budget premium publishers can win. “The data challenges in the ecosystem have spurred a flight to quality,” said one news executive. “Anyone with a subscription model can reassure advertisers that there is certainty in what they are buying.” Advertiser interest typically falls into one of two buckets: effective lower-funnel solutions and integrated, multichannel packages. We were at risk of becoming hard to do business with. Anonymous publishing exec The former reflects the continued emphasis on performance in response to tightened advertising budgets. Publishers with commerce content offerings, shopping capabilities or otherwise highly performant ad products have cited those products as objects of continued advertising interest. The demand for multichannel packages, which typically span live events, branded content and a video element—often repackaged event video, distributed on social channels—represents the acceleration of an existing trend. Brands want to use publishers’ knowledge of their audience to craft distinct messaging, then hit consumers with those materials across multiple touchpoints. These products have no parallel from tech platforms or retail media, making them a point of differentiation for publishers. In order to handle the increasing complexity and white-glove nature of these sales, one publisher invested last year in building out a client success team to help support this burgeoning line of business. “More of our revenue continues to be tied to programs that have custom content and event sponsorship, so our deals are getting bigger but more complex,” the executive said. “This team didn’t exist before last year, but we were at risk of becoming hard to do business with.” AI and the election, both a blessing and curse Two major trends—the rise of AI and the coming presidential election—promise to have outsized impacts on publisher revenues. AI companies’ race for market share has prompted them to spend lavishly on advertising, which publishers have capitalized on—often through events and specific editorial products, like newsletters and branded content. But the technology also poses a structural risk to the media industry itself, a worry plaguing publishers’ ability to strategize properly for the future. Advertisers ... want to be dark from September up through the election. Anonymous exec at a general interest publisher Likewise, the coming election promises a boom in readership, which publishers hope to use to win reader mindshare, scale their registered user base and monetize through volume advertising and subscriptions. But publishers are concerned that the division the contest produces will spook advertisers, leading them to throttle their ad spend out of an abundance of caution. Even publishers with only tangential political coverage fear that their second-half revenues might suffer. “I’m hearing from advertisers that they want to be dark from September up through the election,” said one executive at a general interest publisher. “That is making me nervous.” Shortened cycles, challenged categories, depressed traffic Beyond the uncertainty posed by AI and the election, several more humdrum challenges continue to plague publishers’ businesses. Despite the interest in custom content, advertisers have continued to operate with shorter, more staccato planning cycles. Publishers often find themselves waiting until the last minute for budget approvals, and they are then expected to produce complex deliverables within the same month. Why Publishers Are Cutting Their D.C. Bureaus in an Election Year Media companies have responded by creating templates for custom content and reorganizing their teams to allow for all-hands-on-deck pushes, but the issue makes for opaque forecasting inefficient workflows. Likewise, slumping categories like consumer packaged goods, retail and consumer financial services have throttled publishers reliant on brands in those industries. And declining traffic has depressed programmatic revenues, a trend unlikely to reverse. “When page views are one-half of the monetization equation and you’re off double-digits, that has an impact,” said one news executive.

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AI, the Election and Cautious Optimism: 12 CROs on Ad Trends Shaping 2024

Events are up, traffic is down and planning cycles are shorter than ever

Mark Stenberg

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Mark Stenberg