Bloomberg Media's CEO Scott Havens on Open Marketplace Exit

Bloomberg Media, entering its ninth consecutive quarter of ad revenue growth and nearing half a million subscribers, is one publisher aggressively pushing what it calls its audience-first strategy for 2023. The company is kicking off the year by cutting ties with the programmatic open marketplace, believing that a “healthier consumer subscription business will provide fertile ground for stronger advertising,” said CEO Scott Havens. The CEO spoke with Adweek about the impact of Bloomberg's move away from open marketplace programmatic ads, his revenue outlook for 2023 and his clients' top priorities this year. The below has been edited and condensed for clarity. Adweek: How have clients responded to your announcement to cut open marketplace programmatic ads?Havens: The response has been quite positive in supporting our move. Many media companies wish they didn’t have such acute pressure on revenue numbers and could do the same. As we move away from the legacy third-party cookie-based ad ecosystem and put a higher value on first-party data provided to us by users with consent and transparency, this is without a doubt the right move for a premium brand like Bloomberg. By working more directly with our brand partners, it lets us showcase our incredible assets, highlight our teams and utilize our well-tuned strategic thinking. Explain how this change will impact user journeys, ad revenue and subscription revenue.No longer allowing third parties to sell ads through open-market third-party programmatic is just the next step in creating a better, more modern digital experience for both our users and brand partners. I’m confident that this decision will improve our user experience, speed up our digital platform and ultimately yield long-term results across both revenue streams. We’re prepared for some decrease in ad revenue. However, long term, this ad volume reduction creates a better ecosystem for our users. At the same time, we are able to provide a clean, brand-safe, less noisy environment for their creative. We'll also continue to expand the number of brands we work with directly. How have subscribers and subscription revenue increased in 2022?After five years, we’re still relatively early in our journey compared to most competitors, but we’ve now seen 20 straight quarters of consumer subscription revenue growth, and we saw over 20% growth in subscription revenue in 2022. We launched our enterprise subscriptions business mid-year, and it’s already a seven-figure revenue business. We anticipate that growing between four- and five-fold in 2023. How much effort, and marketing spend, do you direct to growing subscribers versus retaining existing ones?Early on—we launched in May 2018—we were largely spending the budget on driving up the total number of subscribers. Since then, we have evolved our thinking, time and money toward focusing on platform usage by our subscribers, engaging our subscribers more consistently and thus driving up retention. You can’t fill up a water bottle very quickly if there is a hole in the bottom. Our team conducts advanced analysis to understand consumer behavior and its correlation with retention. This includes understanding the number of times we communicate with users via email, or the number of times a user visits our platform and the effect on retention and churn rate. How does pricing play a role in this?We are always testing price and term lengths with various segments of our customer base, but we haven’t changed our monthly pricing since launch. We have adjusted our annual pricing to encourage more users to opt-in to 12- or 24-month plans since we retain them at a far higher rate. When we increase pricing more generally, we’re firm believers that we’ll need to simultaneously enhance the value proposition—providing more content, data or services—to justify the increase to our subscribers. What are your clients' priorities for 2023?We’ve been seeing an increased focus in our brand partners interested in connecting with environmental, social and governance topics over the last few years, with sustainability being a priority focus of nearly all of them now. The analysis on [audience and content analysis platform] Bloomberg AiQ shows that there has been a 1,500% increase in media coverage of sustainability since 2017. Another significant trend we’ve seen is that our clients are increasingly focused on developing fewer, but more significant, marketing initiatives. We’re seeing an appetite from brands to create new data-driven thought leadership that acts as an “anchor,” which might take the form of a global study, a new index or an industry report. We also will continue to see brands employ influencers. For Bloomberg, we’re working with Kal Penn to host our Bloomberg Green show Getting Warmer launching this year. Not only is he an expert in the craft of entertainment, but he lends expertise in sustainability as well.

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Bloomberg Media's CEO on Exiting the Programmatic Open Marketplace and Top 2023 Priorities

Scott Havens anticipates a 'healthier consumer subscription business will provide fertile ground for stronger advertising'

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