New York Times-owned sports publisher The Athletic introduced display ads on its site and in its app on Monday – but don’t expect to be able to buy these ads on the open web.
Until now, advertising on The Athletic’s content was limited to audio ads for its podcast series and display ads in select email newsletters.
The goal is to make The Athletic profitable within three years, said Sebastian Tomich, The Athletic’s chief commercial officer, a role he transitioned into in March after more than eight years with The New York Times, most recently as SVP and global head of advertising.
“We’ve proven at the Times that you can run a successful ad business alongside a paid subscription product, so we’ll be implementing that playbook,” he said.
The Athletic will maintain its subscription-based model, which means that even paying subscribers will see ads, Tomich said. The Athletic does not plan to introduce a cheaper ad-supported subscription tier or a free ad-supported tier.
The Athletic’s quest for profitability by 2025 is an uphill climb. The sports news site has more than a million paid subscribers, but it lost $6.8 million in the two months after it was acquired by the Times for $550 million in January.
The Athletic had less than $10 million in ad revenue last year.
“We see numerous successful sports media businesses with $200 million plus in ad revenue, so we feel that’s a good benchmark for us to strive for,” said Tomich, who notes that CPMs for inventory on The Athletic will range between $15 and $25.
Although the Times is forecasting an ad revenue downturn in Q3 2022, that’s not why it’s launching ads on The Athletic now. Advertising on the Athletic was always part of the plan, Tomich said.
Although the NYT and The Athletic will explore opportunities to bundle their ad inventory for cross-portfolio campaigns, The Athletic’s sales team will largely act independently from the NYT’s sales team. By the beginning of next year, the headcount for The Athletic’s global sales team will be between 10 and 15.
Ads will be sold through direct deals with advertisers rather than through open web RTB. The Athletic will also prioritize sponsorships with brand partners, Tomich said.
“We are deliberately avoiding open web programmatic,” Tomich said. “Never say never – and I don’t want to shut the door on programmatic opportunities in the future – but because we have a subscription emphasis, ad quality is a big priority for us.”
This is not a new point-of-view for the Times. It stopped running programmatic ads in its apps in 2020, despite losing out on single-digit millions in revenue, because their slow loading times detracted from the user experience.
In designing display ad placements for its website and app, The Athletic will take a page out of the NYT’s playbook and make an effort to balance the ad experience and user experience for paid subscribers, Tomich said.
“I feel confident that the strategies the Times put forward will work well for us,” he said. “But advertising and sports are a lot more closely connected than hard news and advertising, so there may be opportunities for us to push [that approach further].”
For example, The Athletic’s website has dedicated landing pages for individual teams as well as national sports leagues.
Advertisers will be able to target local campaigns by geo, while broader targeting options will be available for national campaigns, Tomich said. The Athletic also has a subscriber base in the UK, which could serve as a foothold for a global ad business, he said. Overall, 27% of The Athletic’s subscribers are from outside the US.
Because The Athletic attracts an engaged audience of sports fans who have proven themselves willing to pay for content, the Times hopes to attract demand from luxury advertisers and other high-end brands that wouldn’t necessarily be endemic to free sports news sites, Tomich said.
The Athletic has already booked ad campaigns with luxury brand Chanel, Swedish electric vehicle manufacturer Polestar and a third unnamed technology brand.
The plan is to continue to focus on “quality over quantity” by working with premium advertisers in the luxury goods, luxury apparel, financial services and technology verticals, Tomich said.
