2021 Media Outlook

Where We Were Last year started off with publishers in a quandary about how to maintain their programmatic advertising businesses beyond 2022, when Google would end its support of third-party cookies in its Chrome browser. But by March, as a pandemic hit, publishers had to deal with the fallout, including a volatile ad market, adverse keyword blocking, shortened sales cycles, disappearing revenue lines, vendors defaulting on payment terms and challenged commerce supply chains. This list of existential threats only added to the ongoing pressures of increased privacy regulation and browsers tightly controlling media companies’ ability to effectively monetize their audiences. But publishers’ knack for adapting proved invaluable. Under these turbulent conditions, media companies rolled out virtual events, dropped subscription paywalls and coaxed advertising budgets back through close ties with ad clients. The Wall Street Journal and The Washington Post, among others, launched ad products suited for markets where buyers had to make quick decisions on the fly. As budgets began flowing again (60% of publishers reported a decrease in ad rates in April, per IAB) those with close ties to clients were reaping the benefits in the second half of the year. Client retention equals success. NowThis publisher Group Nine launched 78 editorial and sponsored franchises and verticals since the start of the pandemic to cater to ad clients outside of stressed verticals like travel and hospitality. Feel-good series In This Together, launched in March, sold every episode since July to brand partners. In 2020, Group Nine had a 60% client retention rate, according to chief revenue officer Geoff Schiller. “We win through retention. It’s one of our driving forces,” Schiller says. “It allows us to have long-standing relationships, deliver white-glove service and be quick and nimble.” In a case where flat became the new "up," a clutch of publishers, from Bloomberg Media to The Information and Group Nine, managed to make it through 2020 in relatively good shape. Where We Are Now The question now is how publishers will remain agile, especially since they are wrestling with the same predicament they've had since last March, namely how to forecast in an era of uncertainty. Publishers anticipate positive growth, according to an Adweek Intelligence study. About 68% of respondents said they were either very or slightly optimistic about the year ahead. Across consumer and business-facing publishers, 71% foresee positive financial growth in 2021 thanks in large part to the prospect of Covid-19 vaccines on the horizon allowing for tentative meetings, in-person events and gradual returns to the office. The pressure is finding where that revenue will come from, especially when the full impact of the pandemic has been veiled by stimulus packages. The multiple crises have forced the inequality gap to widen, and media companies are now having to show a real commitment to their diversity, equity and inclusion promises, both internally and externally. The bifurcation of media companies has become pronounced. Larger, stronger companies with deeper data troves keep investing in digital transformation and adapting to the difficulties typical of economic downturns. Contenders like The New York Times are continuing to invest in journalists and high-profile editorial talent. Digital publishers like BuzzFeed and HuffPost have consolidated to capitalize on each other's strengths. Where We're Going Antitrust cases are piling up around Google and Facebook, from the former’s market dominance in search and ad tech to the latter’s purchase of Instagram and WhatsApp. These will rumble on through lengthy litigation proceedings that distract from the companies' future innovation. Fines, like those the European Commission has levied, are possible. Divestment is unlikely. A much keener eye on any future traces of market dominance, especially how Google maneuvers its role in re-architecting the digital advertising ecosystem, post-third-party cookies, is certain. Some publishers believe Google is the only company that has visibility over the ad-buying process and the resources to come up with a viable identity replacement. Yet, few want it to be Google-controlled. Damned if you do, damned if you don't. Publishers like News Corp finally welcome decent payments from Google and Facebook for displaying news. No matter the capacity in which publishers choose to work with platforms, it's usually complicated. Meanwhile, as access to vaccines becomes more mainstream, how platforms handle the spread of misinformation will matter even more. Content moderation was a running theme in 2020, as social media usage soared and platforms had to contend with fake news in the public health and political spheres. The screws are tightening. Lawsuits, new legislation and regulatory rules—in the U.S., Europe and beyond—could curb anticompetitive behavior, content moderation and user data privacy. President-elect Joe Biden’s stance on Big Tech will become clearer, but as he's keen to mend global relationships, expect talk of a “transatlantic grand bargain,” writes The Economist editor in chief Zanny Minton Beddoes, where America eases European concerns about its tech giants' dominance, and the personal data they gather, in return for a joint approach to Chinese tech companies. Mastering agility Over a third of publishers expect churn to increase in the next six months, according to tech platform Zephr. The majority of publishers are managing their customer data but not leveraging it to widen the breadth of what they offer. Proactive publishers are figuring out how to keep Covid-19 cohorts in 2021. Publishers are coy about churn rates for competitive reasons. Monthly churn is 6% (2% at the top end). The average monthly customer acquisition is 8% (18% at the top end), according to subscription platform Zuora. You need agility in your DNA to balance three value mechanisms. The need to acquire, the need to retain and the need to monetize.Amy Konary, global vp, Subscribed Strategy Group at Zuora “The fundamental difference between being subscriptions-led and advertising-led is the editorial and business sides are unified in ways they never were before,” says Amy Konary, global vp, Subscribed Strategy Group at Zuora. In 2021, successful publishers will master agility, she adds, responding to readers’ habits based on their behavior. Subscribers might suggest they don’t want to hear about Covid-19, but they do want to know more about the science. Or they want to continue subscribing but at a lower price and only to specific sections. Nearly a third (413,000) of the new subscriptions The New York Times added by September 2020 were through its lower-cost digital products like Cooking and Crossword. Unbundling editorial products and allowing readers to subscribe to sections, like sports plus politics, makes a subscription more affordable and relevant. Platforms like Substack—where readers can pay for newsletters from specific individuals—are investing more in products for their users to get money from audiences directly. Subscription fatigue will become real as companies, platforms and creators jostle for dollars. Konary adds: “You need agility in your DNA to balance three value mechanisms: the need to acquire, the need to retain and the need to monetize.” Check out all of our 2021 Outlook coverage here.

Outlook

'Agility in Their DNA': How Media Companies Will Lean Into Their Strengths

They're bracing for some tough months ahead

Where We Were

Lucinda Southern

About

Subscriptions

Events

Publications

Where We Were

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Lucinda Southern