Home Ad Exchange News The (NY) Times, It Is A-Changin’; Amazon Spends Money To Make Money

The (NY) Times, It Is A-Changin’; Amazon Spends Money To Make Money

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A Sign Of The Times

The New York Times beat expectations for Q4 2022 thanks to a strong subscription bundling push, according to its earnings report. But digital ad revenue was only up a smidge.

The Times added 240,000 net digital subscribers in Q4 and more than 1 million digital subscribers for 2022, its second best year for digital subscription growth other than 2020.

Almost one-third of those new subscribers signed up for a subscription bundle, which is roughly six times more than the previous year. Total bundle subscribers grew by 380,000 in Q4.

Revenue from digital-only subscriptions for the quarter was $269.2 million, a 31% year-over-year increase. Encouragingly, many of those revenue gains came from subscribers who graduated from low promotional rates to a regular pricing tier.

Less encouragingly, digital advertising revenue growth for Q4 was sluggish. The Times reported $119.2 million in digital ad revenue, just a 0.6% growth rate. Altogether, digital advertising amounted to around one-sixth of its $667.5 million total Q4 revenue.

NYT forecasts that its digital subscription revenue will increase by between 13% and 16% in Q1, alongside a low single-digit decrease in digital advertising.

Promo Power-Up

Amazon increased its promotion and ad spend by 22% year-over-year to more than $20 billion in 2022, and has now roughly doubled its ad budgets from 2020, according to Ad Age data. There was a rare drop-off in its ad spend in 2020 due to high ecommerce demand during quarantine, which allowed Amazon to ease up on paid media.

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Amazon is now on pace to retain its title as the world’s highest-spending advertiser in the Ad Age annual rankings, which will be published later in the year. (Ad Age gets an early look, for obvious reasons).

Despite the hugeness of Amazon’s promo budget, its spending is relatively efficient at just 4% of total sales, per the estimates.

For comparison’s sake, Walmart’s 2022 ad spend was just south of $4 billion, according to Ad Age, up from $3.3 billion the year before. That’s still quite a lot, but far less than what Amazon is shelling out.

Amazon is spending roughly five times as much on ads as Walmart while doing less in terms of gross merchandise volume. (Amazon is catching up, though.)

State Of The Disunion

President Biden reiterated his stance against data-driven advertising and, most notably, advertising targeted at children during his State of the Union address on Tuesday.

“It’s time to pass bipartisan legislation to stop Big Tech from collecting personal data on our kids and teenagers online,” Biden declared. “Ban targeted advertising on children, and impose stricter limits on the personal data that companies collect on all of us.”

The White House and congressional allies are pushing for legislation this year that would increase the age for child privacy protections from 13 years old to 16, Politico reports.

The ad industry is in favor of child privacy laws, but always gets wary when politicians and regulators make blanket statements about data-driven advertising.

“Blaming data and technology for complex problems and restricting or eliminating digital advertising could severely diminish the benefits of the internet for everyone,” said Lartease Tiffith, the IAB’s EVP for public policy, in response to Biden’s comments.

ANA CEO Bob Liodice also stressed that advertising has a positive role to play. “Through good-faith collaboration, we can codify important data protections for consumers while protecting valuable ad-supported content and services,” Liodice said.

But Wait, There’s More!

Brands on TikTok can now boost indie creator posts that promote their company and target audiences by location. [The Drum]

Permutive makes its publisher data available to the buy side for the first time through a partnership with Microsoft-owned Xandr. [Adweek]

Conductor acquires Searchmetrics in a big enterprise SEO merger. [Search Engine Land]

Discovery+ will remain a standalone streamer despite a corporate merger with HBO Max. [Variety]

Alphabet stock tumbled after the release of Google Bard, its chatbot AI, which apparently did not impress. [Bloomberg]

Microsoft’s double-edged threat to Google. [WSJ]

You’re Hired!

Stagwell names Helen Lafford as SVP and chief growth officer for the UK and Europe. [MediaPost]

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