Digital Scale For Sale: How Publishers Can Thrive in an Era of Consolidation

Scale has been important in the digital publishing business – and industry in general – for as long as I can remember. But, not until Facebook and Google started gobbling up all of the growth in U.S. digital ad spending (63% according to eMarketer estimates) has the need been so acute. Publishers require scale to survive since the cost to acquire a large, monetizable audience and develop video/branded content is not inconsequential. Gone are the days when growth capital flowed into the next new publisher (think, just 3 to 5 years ago with BuzzFeed, Mashable, Refinery29 and Vice as prime examples). Internal cash flow generation is now king and the shift from direct sold display advertising to programmatic has squeezed margins. This magnified pressure on revenue has led to the in-house transfer of branded content by major companies like PepsiCo, L’Oréal, and Unilever, and the move by P&G this past year to run its own programmatic business. Add the abundance of quality content and growing interested audiences and these issues are exacerbated. Because of this, we’ve reached a tipping point and I posit that the Meredith-Time Inc. deal officially marks the beginning of the race toward digital consolidation. Why this deal and why now? Well, let’s look at the data for answers. Based on comScore U.S. Multi-Platform Unique Visitor per Month (UVs/mo) data for October 2017 (the digital equivalent of Nielsen TV ratings), the Time Inc. acquisition pushes the number of UVs sold (or currently announced for sale) to over 677 million in the U.S. alone. To put that into perspective, that's more than all the monthly U.S. UVs at Facebook, Google and Amazon combined! Focus on a Specific Audience So, what's an independent publisher to do? Bustle Digital Group, the millennial women's lifestyle publisher, is a good case study in success. CEO Bryan Goldberg, who previously founded Bleacher Report, understands his audience and what it wants (read: a comprehensive persona analysis is worth its weight in gold). Bustle’s focus on young women who seek, according to their media kit, “accessible content across style, news, beauty, home and entertainment” is unparalleled with over 54% of its audience between 18-34 (according to October comScore figures) and mobile only traffic in excess of 83% -- well above industry norms. Their Romper brand (for millennial moms) and recently purchased Elite Daily serve to further support Bustle’s audience focus. Use Data to Understand What You Do Best Other publishers such as BuzzFeed, Vox and Vice dive deep into data to determine what content they create by identifying those pieces with the best historical ROI. This allows them to focus on what they do well and where their brands have the "right to win." If you haven’t figured it out, THIS is the AI opportunity in publishing. Find the White Space SWOT analyses are not passé either – regardless of whether you’re a large established publisher or a challenger brand, identify weaker competitors or seek white space opportunities and go after their audience like they stole your lunch money, as my brother likes to say. While Snapchat’s monthly active user growth may not be as strong as Wall Street has hoped, the company has most certainly owned the AR (augmented reality) market. The result? – one of the largest comScore UV growth rates in 2017 among the top 100 publishers at +62%. Go Beyond Social to Deliver Content Look at The New York Times for another winning strategy – multi-level audience engagement that goes beyond just social media. NYT’s email newsletters like DealBook work well not only because the content is a must read, but also because they’re personal and the events that they run to complement them have the same look, tone, and feel.

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Digital Scale For Sale: How Publishers Can Thrive in an Era of Consolidation

Scott R. Singer

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Scott R. Singer