Politico Europe Aims to Grow Ad Revenue With New Studio

European policies on legislation like the European Green deal, post-pandemic economic recovery and post-Brexit data sovereignty are not light reading. Politico Europe hopes to help brands distill and advocate for policy change with a newly launched content studio. Previously, Politico’s branded content offering was piecemeal. The collection of fragmented campaigns made up 8% of total revenue in 2020. The goal with the studio—which combines a creative studio, media company and strategic consultancy—is to win new business, grow campaign length and increase client retention. In doing so, it aims to grow total advertising revenue by between 8% and 10% this year. As part of that focus, in September the publisher hired former Economist executive Nico Sarti as director for creative strategy and production, overseeing a team of three dedicated staffers. The studio has a network of contractors including specialists in filmmaking, animation and scriptwriting. It also leans on roughly 20 other Politico Europe staffers. The publisher, sister to Politico U.S., now has 200 employees, nearly half of whom are journalists. “It was an aligning of the planets when it comes to making the transition from an ad-hoc [ad delivery] to investing into a team, during times when it is not the easiest to communicate with clients or have meetings about their objectives,” Sarti said. During the pandemic, publisher-branded content studios with specialized content and dedicated audiences have fared better than content studios from general news publishers. The U.K.'s Telegraph stopped publishing branded content from its studio Spark at the end of 2020, responding to coronavirus-induced ad pressures. Other publishers have cut the number of clients they work with in order to concentrate on fewer, deeper campaigns with marketers, an ongoing trend that has accelerated. The pandemic changed the way messages had to be structured. The focus on advocacy campaigns from branding campaigns was immediate.Nico Sarti, director of creative strategy, Politico Europe content studio Between March and April last year, marketers running mission-based advertising rose 42%, according to the Interactive Advertising Bureau. Native programmatic formats increase by 17% in March, while other categories were down, according to Adomik research. For Politico EU, the studio hit its 2020 target within three months and is on track to meet its 2021 target, according to the publisher, though it would not share specific financials. What it did share is client retention, which was already high prior to the studio’s launch. The year-on-year client retention rate between 2019 and 2020 was 95%, the publisher said, though it also declined to share specific numbers. Politico's studio had 10 clients in 2020 including engineering company Leidos, pharmaceutical company Bayer, and oil and gas company Equinor. “The pandemic changed the way messages had to be structured. The focus on advocacy campaigns from branding campaigns was immediate,” Sarti said, noting that carmakers, for instance, touted their greener goals rather than the specs of their latest models. “The transition benefited us," he said, adding that clients said they wanted to run longer-term campaigns, which are also easier to measure the impact of over time. Several coronavirus-induced trends assured Politico that it was making the right moves. Dense messages for driving cleaner energy bills to influence policymakers need to be done over a longer period of time. Brands had to shift their messaging and were keen to lean into more emotive areas rather than just shifting products, which the publisher did through a sponsored Q&A with the executive vice president of New Energy Solutions of Equinor, focused on offshore wind farms. “Our partners tend to want to do two things: issue advocacy or build brand awareness,” executive director for advertising Molly Fluet said. “It’s difficult to break through on complicated policies.” The goal is to follow in the footsteps of the Politico U.S. studio, Focus, which launched in 2015. Focus increased branded content production by 30% in 2020 compared to 2019, launching over 65 campaigns for its clients. To help increase client retention, the publisher runs perception surveys before and toward the end of the campaigns to gauge the impact. It measures brand awareness through three key metrics: penetration of a message, web of awareness and brand consideration. (The publisher declined to share results of case studies, citing client confidentiality.) Politico Europe, in its sixth year, is in its second year of profitability and grew revenue in 2020 by over 15%. It's also in the strong position of 60% of revenue coming from its paid product Politico Pro in 2020, where subscribers get access to data and policy records, while its articles are mostly free to access and generate ad revenue. The rest comes from advertising. Branded content makes up 20% of advertising revenue, which equals 8% of total revenue, the publisher said. While branded content will remain at roughly 20% of advertising revenue, its size of the advertising pie is expected to grow between 8% and 10% in 2021. The publisher benefits from being a joint venture between Politico in the U.S. and German publisher Axel Springer. Branded content studios have gone through evolutions. Now, according to Rob Ristagno, CEO of consultancy The Sterling Woods Group, the new frontier is to use branded content as a lead magnet, getting audiences to provide an email address that can be nurtured by both the publisher and brand.

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Politico Europe, Profitable for the Second Year, Aims to Grow Ad Revenue by 10% With New Studio

The publisher's studio had 10 clients in 2020

Lucinda Southern

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