Digital Publishers Start Turning A Profit; Why The Slow Transition From Linear To OTT Is A Good Thing

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Back In The Black

Group Nine Media will turn a profit in 2020, CEO Ben Lerer shared Wednesday morning at a press breakfast. The crop of disciplined, profit-focused executives that came along with GroupNine Media’s acquisition of PopSugar at the end of last year – including its founders, CRO, COO and CFO – is helping move the rest of Group Nine Media into the black. In addition to gaining scale through multiple horizontal brands, Group Nine Media is focused on revenue diversification. PopSugar led in DTC offerings, such as a subscription box and paid online fitness classes, and now other GroupNine brands will follow in its footsteps. On top of that, Group Nine Media’s fleet of brands will produce 70 shows this year for Netflix, Quibi and other distribution platforms. And here’s another sweet treat: The digital advertising market is focusing more on locking up digital inventory, Lerer said. “More and more advertisers are starting to do upfront commitments to digital players. That’s a big difference we’re seeing.”

Prophets And Profits

Group Nine isn’t the only digital media company touting its profitability. Business Insider, Vox Media, The Information and Politico all turned a profit in 2019, Axios reports. (Oh, and so did Axios.) Meanwhile, digital news bellwethers BuzzFeed and Vice both expect to become profitable this year. Finally, a few tailwinds for news companies, despite general pessimism around the category. Major platforms, including Google and Facebook, are being forced to pay for content creators under new EU copyright laws, even if just to display snippets of a story when users search for news. At the same time, Google, Facebook and other big tech players, such as Apple or Netflix, are starting to shell out for access to stories and episodic content. More.

Proof Is In The Pudding

CPG giants are easing their ad budgets away from linear television and toward OTT and data-driven options, and it’s a sloooow process. But there’s nothing wrong with a measured transition when we’re talking about big budgets. If anything, this should be a more deliberative process than it is, says Russell Ball, global media operations manager for CPG holding company Reckitt Benckiser. “There’s a race to scale and ramp up without sufficient testing and analysis,” Ball tells Video Ad News. Programmatic has broken down barriers to testing, and so there’s no reason managers shouldn’t do way more of it before going all-in on a new channel that could be vulnerable to fraud or mismanaged campaigns, Ball said. This is especially true when it comes to OTT, where brands can use data to prove specific use cases that drive results but have trouble generating broad awareness. “People talk about OTT providing incremental reach, but I think it’s more about incremental impact,” he said. More.

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