Adweek Exclusive: Publishers Predict Revenue Growth in 2021

Despite ongoing hardships, the mood of media professionals is bordering on optimism, even as they realistically recognize that a rebound won't come until the middle of 2021, publishers responding to an Adweek survey tell us. In particular, publishers who are able and willing to invest in their editorial teams are eyeing opportunities presented in connected TV, commerce and virtual events as areas to capitalize on in preparation for the expected recovery. About 68% of respondents say they were either very or slightly optimistic about the year ahead. Adweek surveyed 122 attendees at its inaugural Elevate: Publishing virtual event, where dozens of media execs representing The Atlantic, Bloomberg Media, Axios and The Information, outlined their current and future plans. Consider it a reaction to the tumultuous and unrelentingly bleak 2020, as the media industry—along with the rest of the world—eagerly look for signs of sunnier skies in the new year. “We at Bloomberg Media are planning on a second-half rebound, beginning towards the end of the second quarter,” CEO of Bloomberg Media Justin Smith said. “We have already begun seeing a lot of the green shoots in anticipation of the end of this difficult 10 months we’ve just had.” For its part, Bloomberg Media pointed to a healthy third and fourth quarter, after a disastrous second, as the financial news giant expects to finish out the year flat compared with 2019. According to Smith, these green shoots are most notable in the company’s bets in digital subscriptions, virtual events and connected TV, making 2021’s prospects look far more favorable. Unlike most publishers, Bloomberg Media can rely on its parent company's solid financial services terminal business and endemic market-focussed clients, which puts it in an arguably more advantageous position. Nevertheless, according to the survey, Smith's positive sentiment is shared fairly equally between both consumer and business-focused publishers. While there may still be a few tough months ahead, Bloomberg Media and others are cautiously observing the ongoing public health crisis, even as they are cheered by the advancing prospect of widespread vaccine distribution. According to Adweek’s survey, 32% of business-focused publishers expect their revenue to grow more than 30% next year. Meanwhile, 43% of their consumer-facing counterparts are forecasting revenue gains between 10% and 20% over 2021. Overall, 71% of publishers foresee positive financial growth in 2021. Virtual events' higher margin Live events, which made up a sizable chunk of many media companies' pre-pandemic revenue, will remain on hold for at least the next six months, according to nine out of 10 people surveyed. Most people expect a gradual return of in-person programming to come back starting in July 2021. Despite a flooded market and commoditization concerns, media companies will continue to embrace virtual events for their higher margin, lower cost base, greater reach and easier ability to draw in megawatt star speakers. Media companies like The Information extol virtual event virtues: Founder and editor Jessica Lessin previously outlined how the publisher’s loyal community lets it monetize events at a much higher rate than its in-person events, driving “more money as well—greater revenue and far lower costs.” As such, virtual components will always play a role in future events. The Information will have racked up 50 events by the end of the year and is tentatively looking at September for its hybrid virtual and in-person format, Lessin said. First-party data gold rush The screws are tightening across user privacy and data sharing. Companies cannot escape that people have a much higher awareness of what happens to their data. “The penalties are going to come,” Adweek CEO Jeff Litvak said at Elevate: Publishing. “There hasn’t been a lot of action [during the pandemic] but we can expect more. Every company needs to know what is happening in [California's recently approved consumer privacy law] Prop 24, what data we can collect and how we can share it.” Media companies with direct access to their audience are in a position of power, as long as it's done so responsibly. As Washington Post vp of commercial Jarrod Dicker outlined in his takeaways, "the opportunity for publishers and advertisers is around 'trust' and operationalizing it." According to Adweek’s survey, 36% think the disappearance of third-party cookies will have a negative or very negative impact. Nearly half (48%) are unsure on the impact. While publishers like The Washington Post have been making strides in building up its use of first-party analytics, European publishers like Dutch public broadcaster Nederlandse Publieke Omroep, can be a source of inspiration, because of several years of navigating the General Data Protection Regulation. Subscriptions remain a key revenue driver For some companies, 2020 was the year subscriptions drove more revenue than any other part of the business (although challenged print and digital advertising revenues are also at work here). The New York Times, Gannet and The Wall Street Journal all scaled various subscriber milestones this year. Half of survey respondents believe subscriptions will be a crucial part of publishers' revenue strategy going forward. Companies have woken up to how subscription revenue models realign the incentives and organizational focus between commercial and editorial demands. At the crux is a shift in the view of who a publisher's customer is from the advertiser to the loyal reader willing to pay for content. Broadly, this speaks to the change in media companies' understanding of the premium value of their content and the need for deeper investment in that area: after all, publishers must produce an editorial product readers will find valuable enough to pay for, as opposed to simply offering total access for free. But even in this area, there is some divergence among how much money publishers intend to put up to support subscription-driving initiatives. According to Adweek's conference survey, consumer-focused publishers are investing more in editorial next year (49%), higher than B2B-facing brands (24%). The Atlantic, fresh off its appointment of former Wired editor-in-chief as CEO, Nick Thompson, has grown its subscription base to 730,000 so far this year. The publication's goal is to reach a million subscribers by the end of 2022. “If we just focus on quality … without regard to platform, that’s going to be the key to our success,” editor in chief Jeffrey Goldberg said.