Dotdash Meredith Ekes Out Revenue Gain as Traffic Slips in Uncertain Environment

Dotdash Meredith saw revenue rise modestly in the first quarter of the year as traffic dropped. 

Parent company IAC forecast adjusted EBITDA for DDM at $330 million to $350M compared to $295.2 million in 2024. 

Revenue of $393.1 million at DDM increased 1% year-over-year. Core sessions dropped 2.7% to 2.21 million from 2.27 million a year earlier. Shares fluctuated slightly above and below the closing price postmarket.

[Read AMO’s Take below.]

Other relevant figures include:

• Digital revenue growth up 7% with ad revenue increasing 1%. Higher premium advertising revenue in tech, retail and beauty and style categories; lower programmatic ad revenue was hurt by lower impression volumes driven by a 3% decline in core sessions
• Performance marketing revenue increased 11% year-over-year driven by 26% affiliate commerce growth, partially offset by revenue declines from services, primarily in the finance category
• Licensing and other revenue increased 30% thanks to its deal with OpenAI that started in May 2024, as well as improved performance from content syndication partners and Apple News+
• Adjusted EBITDA of $80 million compared to $130 million a year earlier and was impacted by a $36 million non-cash gain related to the termination of a lease that would otherwise have expired in 2032, and which required a payment of $43 million; the termination reduces future fixed lease payments by $102 million.

“It was a strong quarter and we are back to what we do best: allocating capital and seizing

opportunities for value creation,” Barry Diller, chairman and senior executive of IAC, said in a statement. 

“DDM, our largest business and the largest publisher in the country, continues to grow digital revenue and profit, even amidst the uncertain landscape. DDM’s sheer scale, loyal audiences, beloved brands like People and advertising performance continue to differentiate it from the industry and underscore its growth potential.”

For the second quarter, DDM expects to see digital revenue growth of 7% to 9% and total Adjusted EBITDA between $67 million to $73 million. For the full year, digital revenue growth should come in between 7% and 10% given the current volatility in the macro economic environment.

AMO’s Take

By: Jacob Cohen Donnelly

Dotdash Meredith has built something remarkable. Unlike most media businesses, it continues to grow revenue—albeit much more slowly than in the past—and has the makings of a technology company with some of its D/Cipher capabilities.

And yet, it, like all publishers, finds itself at the whims of platforms. Based on the core session numbers released in today’s earnings, we might be seeing an early indication of peak DDM from a pure traffic perspective (we’ll come back to the business in a minute).

Whether it’s statistically significant is hard to ascertain because we simply don’t have enough data points. Was it one bad week that screwed everything up or were its weekly numbers coming in lower all quarter?

The reality is likely that the rise in chat-based and AI-overview results is impacting the business. Its food portfolio contains a number of brands that draw 80 million monthly active users. That portfolio is, according to DDM, #1 in the world from a scale perspective. It accounts for over a fifth of total digital revenue. And yet, as a user, I can get a recipe straight from ChatGPT—likely taught on DDM’s content—without ever going to one of its sites.

But that’s what makes this so remarkable. Despite traffic dropping, digital advertising revenue was up 1%. In the earnings release, it says that this was driven by “higher premium advertising revenue due to the technology, retail and beauty & style categories.” Its contextual ad technology, D/Cipher, is working.

With the rise of AI, it will be harder for content-based publishers to reach the same scale they once did. The only way to continue growing revenue is to boost the revenue per user. That’s what D/Cipher brings to the table. It’s an LTV booster. Traffic might drop, but every session becomes more valuable because the ads work.

We can already see DDM modifying its strategy to combat the drop in platform-driven traffic. When Dotdash bought Meredith, I was convinced it would find a way to sell People Magazine. Entertainment didn’t fit the strategy of focusing on service-type content. And yet, it seems to be doubling down. Case in point? It launched an app for People. It’s trying to build a loyal audience that’s not dependent on platforms.

So, can Dotdash Meredith continue to grow its revenue if traffic continues to trend down? There’s a two-part answer to this.

First, growth of its publishing revenue will be entirely dependent on its ability to grow brand adoption. If a ton of users flock to the apps, it may be able to stomach the drops in traffic.

Second, it may not even matter. Dotdash Meredith hired Jim Lawson, formerly of AdTheorent, to be its president of D/Cipher. In the earnings, it said the hire was made “to accelerate its expansion as a new standard of ad targeting across the premium open web.” D/Cipher is going to become an ad network (or whatever word you want to use to describe it).

That means that even if Dotdash Meredith’s traffic were to drop, as long as it has enough scale in the ad network (aka other publisher websites that run D/Cipher ads), it can continue to grow ad revenue. The best part here is that the margins might be greater because DDM doesn’t have to pay for content to be created on third-party websites. Investors should ask IAC to split this out in future earnings so they can understand what is coming from the ad network versus what’s running on the owned & operated.