Nonprofit Newsrooms Increasingly Embrace Digital Advertising

Although historically funded primarily by a mix of philanthropy and foundational giving, nonprofit publishers, including Chalkbeat, Cityside, The Texas Tribune and others, have increasingly embraced digital advertising as a key part of their revenue mix, according to data from the Institute for Nonprofit News and interviews with nonprofit executives. The percentage of total revenue INN members generate from advertising has risen from 3% in 2018 to 15% in 2022, according to INN chief of growth programs Courtney Lewis. For local nonprofit newsrooms specifically, advertising now makes up 29% of their average annual revenue. These firms say the growth of nonprofit advertising gives marketers access to targeted, diverse audiences in premium environments—an offering made more valuable as evolving privacy regulations reshape the digital marketing landscape. For brands looking to build trust with specific communities or underscore their company values, nonprofits offer an affordable, engaged audience, said Molly Powers, a digital media planner at Reprise Digital. Last fall, Powers ran a three-month campaign with a nonprofit publisher, generating 1.4 million impressions across six sponsored posts for $20,000. “These are brand awareness campaigns, so we were not looking for people to click to the site,” she said. “This was about showing support for local journalism and a diverse readership.” Nonprofit Newsroom Verite to Launch, Serving New Orleans Despite these increases, the size of these digital advertising businesses still pales in comparison to their for-profit peers. Between the roughly 400 members of INN and 30 members of the American Journalism Project—another consortium of nonprofit news publishers—the two generated around $66 million in advertising revenue in 2021. In the same time period, The New York Times generated almost $500 million in digital advertising revenue. Advertising revenues also remain the most volatile source of money for nonprofits, as the brand marketing budgets they court are often the first cut in the face of economic unrest. Amongst INN members, median advertising revenue dropped nearly one-third in 2021 from pre-Covid levels. Nonetheless, the growth represents a positive trend line compared to the economic decline of for-profit local news, whose nationwide footprint continues to shrink in the face of shifting market conditions. Since 2019, 360 news publishers—or roughly two per week—have shuttered across the U.S. “Nonprofit does not mean non-commercial,” said Sarabeth Berman, the chief executive of AJP. “The goal is to leverage philanthropy to establish these nonprofit organizations, but build into a place where they can become self-sustaining from reader revenue and advertising.” A maturing market As a rule of thumb, larger nonprofits rely less on digital advertising because they can more easily cultivate philanthropic gifts and donations, while smaller, local nonprofits rely more heavily on it. Since 2017, the number of local nonprofit newsrooms has exploded, growing as a percentage of the total nonprofit field from 25% to 40% in 2021, according to INN. This change in the composition of the sector has spurred its gravitation toward digital advertising. But the gospel of revenue diversification has found adherents in nonprofits of all sizes, which has led larger organizations to invest more heavily in their digital advertising businesses as well. Chalkbeat, a nonprofit covering education, has grown its digital advertising business by 300% since 2019, according to chief revenue officer Amy Rosenblum. In 2021, the publisher topped $1 million in digital advertising revenue, and it hopes to generate 20% of its total revenue from advertising as part of its 10-year plan. At Cityside, a nonprofit umbrella organization representing Berkeleyside and The Oaklandside, digital advertising now represents 25% of its total revenue. And at The Texas Tribune, nearly 33% of its total revenue comes from website and events advertising, according to the publisher. Climate Publisher Grist Elevates Its EIC to CEO as It Eyes Expansion Solving for scale The primary headwind facing nonprofit advertising is a relative lack of scale, an issue inherent to local news. Compared to social platforms and even their location-agnostic publishing peers, local nonprofits cannot compete on reach, said Michael Zivyak, the chief revenue officer at Cityside. A lack of sophisticated advertising technology and expertise has also slowed growth. But ad tech immaturity will decrease as the field develops, and the sector is working to develop workarounds to its limited scale, including offering deals that package website, newsletter and event sponsorships together. Other solutions include expanding their network—Chalkbeat is now in eight cities, and Cityside plans to expand to a third destination this year—as well as combining inventory on a nationwide basis. Mergers and acquisitions, like the tie-up of the Chicago nonprofit WBEZ and the Chicago Sun-Times, could also add bulk, said Dick Tofel, principal at Gallatin Advisory and the founding general manager of ProPublica. In the absence of outright scale, nonprofits have instead pointed to the desirability of their audiences. But ultimately, the crux of their pitch to clients will almost certainly revolve around value alignment, said Lewis. “Advertisers are spending as a signal that they are invested in a place,” she said. “They understand the importance of journalism in a community.”

Digital Transformation

Nonprofit Newsrooms, Eyeing Sustainability, Welcome Digital Advertising

The business now represents nearly a third of total revenue for many

Mark Stenberg

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