During the course of the last week, the media and publishing industry has been talking about some very important and thought-provoking issues:
- Publishers are scrambling to expand their revenue channels while navigating through the challenges presented by the General Data Protection Regulation (GDPR)
- Mergers and acquisitions are all the rage as publishers attempt to expand their content offerings and appeal to niche audiences
- Valuations of privately-owned publishers are skyrocketing but at the expense of employees
To learn more and stay up to date with the latest and greatest newsmakers of the past week, keep reading about the topics below.
Publishers Scramble for Revenue-Generating Alternatives Post-GDPR
For many publishers, the ever-evolving legalities surrounding the General Data Protection Regulation (GDPR) and loss of third-party cookies on Safari and Firefox browsers represents an inconvenient, potential threat to programmatic ad revenue.
To combat the restrictions, publishers are trying to figure out ways to monetize their first-party data by creating audience identifiers that help clients target the right people at scale. With this approach, publishers won’t need to rely on third-party cookies.
In some cases, this has led to more granular targeting on their own digital properties around audience intents, behaviors, sentiments and interests. For others, this involves selling first-party data, which will be used for targeting audiences outside of their own properties.
News Corp is one of the publishers actively pursuing beyond-the-cookie strategies that prioritize identifying audiences with first-party rather than third-party cookies. The organization issues a news ID for individual readers so they can be identified without the use of third-party cookies. To date, the media group has created 590 million global anonymized user IDs.
Being able to track each known user means that companies can identify the behaviors and appetites within their communities, providing valuable insights around readers’ habits and preferences.
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Others are also pushing hard to convert anonymous users into known users based on first-party data. Insider spent the last year developing hundreds of millions of reader IDs, mapping first-party data that isn’t personally identifiable but provides in-depth insights into reader behaviors, interests and intents. As a result, the company is able to create effective targeting segments for marketers.
Sports media companies are also only beginning to realize now that fan engagement data is key to building audience loyalty and revenue.
The Financial Times, on the other hand, is focusing on putting efforts towards capitalizing on private deals — specifically programmatic-guaranteed deals.
Meanwhile, The Washington Post has created a first-party data ad targeting tool that offers detailed contextual targeting capabilities along with user-intent predictions for marketers. The publisher aims to provide targeting options for advertising clients who want to wean themselves away from third-party cookies.
Digital Publishers Are Expanding Their Audiences by Focusing on Niche Interests
In pursuit of audience expansion, digital publishers are buying up smaller, niche publishing companies and are launching new verticals focused on those specific interest areas.
A growing trend among publishers, the industry as a whole is looking to achieve greater leverage against ad giants Google and Facebook. Three recent announcements are clear proof points that the focus on niche content is how publishers are trying to distinguish themselves within the market:
- IAC’s Dotdash — a media organization that owns 10 publishers — just purchased Liquor.com, its fourth acquisition this year of niche vertical content.
- Vice Media’s male-dominated content will now be more inclusive with a deal to acquire Refinery29, a popular publisher with younger female audiences interested in their lifestyle and entertainment verticals.
- Bustle Media Group (BMG), a female-focused digital media company, is launching a tech-focused news site called Input in November, bringing BMG’s total site count to eight. Over the past year, BMG also acquired science-focused site Inverse, culture-focused The Outline, and pop-culture-focused Nylon in a bid to attract more diverse audiences.
Niche outlets are able to help publishers not only expand their audience reach but also their ability to target ads based on interests. This is the main advantage tech giants already have, which easily persuades marketers to sacrifice their precious ad dollars.
By mimicking this core benefit — interest-based ad targeting on their own properties — publishers can increase their share of the pie. For example, Dotdash is bundling its assets into four groups, including “health and wellness,” “finance” and “food, beverage and home” to make it easier to pitch to certain brand categories by interest area.
Digital Publishing All-Stock Deals Are the New Normal
Investors are no longer interested in funding media companies that are not growing quickly. As a result, the growing trend is making all-stock deals as the last and best option for publishers and their investors.
While mergers and acquisitions have dominated media headlines this year, some of the biggest have been all or mostly stock-based deals, including the three most recent ones:
- Group Nine Media acquiring PopSugar in a stock deal that values PopSugar at $300 million.
- Vox Media’s inked a deal to buy New York Media in a $102 million all-stock deal.
- Vice Media bought Refinery29 in a deal that valued the publisher at $400 million, and the combined companies at $4 billion.
Stock deal valuations are essentially what someone else values the stock to be worth. And the only way to know this is to either go public or to sell the company to someone else. It’s up to the seller and the buyer to make up and agree upon the value. The stock isn’t traded on a public exchange, so while the relative values are meaningful, the overall value is virtually meaningless.
Another big issue is that all-stock acquisitions often mean that whatever common stock employees held is now worth much less. That can make it harder to keep the talent they have, as well as recruit new talent.