Media Briefing: A snapshot of the digital media economy at the start of earnings season

By Tim Peterson

In this week’s Media Briefing, media editor Kayleigh Barber examines the state of the digital media economy as major tech platforms report quarterly earnings and advertising and commerce businesses remain in flux.

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Media execs prep for recession, layoffs at Vox Media, The Washington Post reinforces its return-to-office policy and more

Businesses on the brink

The key hits:

IAC’s Dotdash Meredith saw an 18% decrease in its pro forma digital revenue in June 2022 compared to June 2021.
Platforms like Google, Twitter and Snap are already reporting lower revenue than expected, blaming “macroeconomic headwinds” as a primary reason for down ad revenue.
Media advisors and analysts say they’re seeing warning signs but are waiting to see how much of a hit certain advertising categories take before proclaiming a recession.

Not all media analysts are ready to call it a recession, but there are plenty of red flags popping up in the digital advertising economy.

Earlier this month, IAC issued its June Monthly Metrics report revealing its media subsidiary Dotdash Meredith had an 18% decrease in pro forma digital revenue in June 2022 compared to June 2021 — pro forma measures Dotdash’s comparable revenue from before and after its acquisition of Meredith last December. For context, this decrease followed a smaller 3% year-over-year decline in pro forma digital revenue in May.

Representatives from Dotdash Meredith declined to speak further about the reasons for why pro forma digital revenue was down in June, stating that the company does not break out the various businesses — commerce, programmatic advertising, branded content, licensing and others — in its monthly or quarterly earnings reports.

While one company does not speak for the whole of the industry, it does beg the question if Dotdash Meredith is alone in experiencing a decrease in revenue at the halfway point of the year. And beyond that, how much the economic slowdown of 2022 mirrors the pandemic-induced recession of 2020.

“That was a quick recovery [in 2020]. Q2 was rough but then Q3 bounced back. I don’t know if this one’s going to be so quick. It will for sure take us into 2023,” said one publishing exec.

Programmatic ebbs and slows

The programmatic open marketplace is experiencing dips in CPMs compared to the weekly averages it saw in 2021. According to Operative’s STAQ Benchmarking Data, the first week of June 2022 had an average CPM of $1.58, nearly $0.20 lower than the average CPM the same week in 2021. By the first week of July, however, average CPMs fell to $1.41, the second lowest CPM of the year after the week of January 2, 2022. That was more than $0.20 lower than the same week’s average in 2021.

“There’s always a dropoff [in programmatic ad prices] at the end of the quarter and start of the new quarter,” said another publishing executive. “The drop we saw was not terrible. It was there. It wasn’t bigger than expected, but I …read more

Source:: Digiday