By Kayleigh Barber

This week’s Media Briefing takes a look at Boostr’s 2023 Pricing & Yield Trend report to understand ad spending in the media industry.

• ‘Regressing back towards the mean’
• Overheard at the NewFronts
• Vice Media faces bankruptcy, Paper Magazine has layoffs and more

‘Regressing back towards the mean‘

Publishers are heading into earnings season with a dark cloud over their heads, but the state of ad spending in the digital media industry doesn’t seem to be as bad as they’re making it out to be.

Two years ago, many publishers got swept up in a false spring where ad dollars were flowing, subscription sales were solid and experimental channels like NFTs were contributing unexpected, yet welcome, revenue.

That spring led to a high average growth rate of 49% year over year for publishers’ advertising revenue in 2021, according to the 2023 Pricing & Yield Trend report from Boostr, which was shared exclusively with Digiday. What’s more, three-quarters of the approximately 100 digital media companies — the company declined to name them publicly — surveyed for this report fully exceeded their pre-pandemic 2019 advertising revenue totals that year as well.

The report comes as the industry is beginning to embrace that ad levels seen this year were a correction for ad growth seen before the pandemic.

But shortly into 2022, the false spring refroze and publishers faced a “rapid deceleration in growth rates” between Q1 and Q4 2022, according to Patrick O’Leary, CEO and founder of Boostr.

“It’s not surprising that this Q1 [was so] difficult [for publishers] to be up, because you were up two years in a row pretty significantly. So the denominator is pretty big,” said O’Leary, who was the author of the report.

While it might feel like Q1 was painfully bad, it really comes down to publishers being off their growth targets versus being significantly down year over year, O’Leary continued. “Everything’s regressing back towards the mean. We’re going back to normal growth rates. The COVID stuff is washing itself out [from] when everything was hyper inflated,” he said.

Downward spiral

So how did 2022 net out for digital media company’s advertising businesses? The report found that the annual growth rate for publishers’ advertising businesses ranged from an average of 9% to 48% depending on the size of the publisher, but on the whole, the industry saw close to a 26% growth rate year over year.

O’Leary said that as early into the year as February, the war in Ukraine ignited some instability in the ad market and by the summer, inflation and the unstable economy had advertisers reenacting their early pandemic-era plays. Despite that, O’Leary said he was still surprised to see just how slow the ad market could get in an election year.

Boostr grouped the media companies into four cohorts based on their total annual revenue: $100 million-plus, $50-$100 million, $25-$50 million, and sub-$25 million. While the largest group (companies earnings $100 million-plus per year) had a relatively stable 2022, the other cohorts experienced …read more

Source:: Digiday

Author: Aaron