April 30, 2024

Contextualized 1st-Party Data is the Moat for Media Companies

I’m really excited about this week’s podcast guest because he’s built not one but two massively successful media companies. Jim VandeHei co-founded Politico and then founded Axios, leading it to a $500m+ sale a couple of years ago.

You’re not going to want to miss this episode. As one AMO Pro reader said, “Getting him to talk specifics, particularly around local, was awesome. Best JVH interview in terms of insights for media operators by a mile.”

Listen to the full episode here or wherever you get your podcasts.

Do you know how your ads compare to those of your competition and the broader media ecosystem? If not, keep reading. 

Ad Orbit, a platform that helps publishers sell, deliver, and bill for advertising revenue, has just published its in-depth advertising trend report for Q4 2023, and the findings are really fascinating. Looking at data from across 1,000+ unique publications, Ad Orbit found:

  • Average CPMs across B2B & B2C
  • When most ad contracts were signed
  • The price for webinars and other services
  • And more…

Click here to download this trends report and learn how your ad business compares.

You differentiate with data and context

As publishers increasingly become aware of the incredible disadvantage they have compared to platforms from a pure scale perspective, finding a differentiation that makes them a “must-buy” has become so important.

This has become even more important as retail media—retailers offering advertising capabilities—becomes more ubiquitous. Ad budgets are growing year over year, but it seems that the amount of competition is growing even faster. Offering standard advertising opportunities just isn’t going to cut it for much longer. Frankly, it probably hasn’t cut it for a long time.

To overcome this, publishers are continuing to invest in their 1st-party data. Just last week, CyberRisk Alliance, a portfolio of cybersecurity brands, announced the launch of its newest product, CyberCept. According to the press release:

CyberCept captures, collects and unifies user and usage data of its opted-in 1st Party users across its entire brand portfolio. Having a single record of truth for each of its users allows CRA to craft omni-channel, integrated solutions for its clients based on their prospects’ content, consumption and behavioral patterns.

CyberCept’s content and consumption data comes from its 2.5M 1st party users creating unique scope and depth within the Cyber Security market. CyberCept processes vast amounts of first-party data which can be combined with 3rd party data to extract meaningful buying signals.

As Industry Dive CEO Sean Griffey tweeted: “If you are cynical, you can read this as simply saying “we are now using a CDP” to process our data.” And he’s right. This press release is a fancy way of saying CyberRisk Alliance now has a capable enough technology stack to capture and productize all of its 1st-party data.

It made me realize that, while I write about this stuff often, many media companies are still realizing that their major competitive advantage is the “user and usage data” that I bolded in the quote. Getting the data to a point where it can be productized is, in and of itself, rather impressive. Some publishers still pretend to have 1st-party data, but their tools are so discombobulated that the data can barely be trusted, let alone used.

But the point is that media companies can shine—even compared to mass-scale platforms—with contextualized data. In other words, publishers can not only talk about who is reading their content, especially if they have captured the correct declarative data, but they can also talk about what content is being read. As the press release goes on to explain:

These intent signals are used to identify potential buyers from users and accounts who are just browsing or early in their discovery. This allows for funnel-based audience segment strategies and is a powerful tool for marketers to better personalize and connect with key prospects within their customer journey.

Suppose CyberAlliance knows that you’re a Chief Information Security Officer and you’re reading about ransomware more frequently. In that case, there’s a good chance you’re in the market for a product or service that can help with that. Marketers will eat up that sort of information.

And no platform can take this away from you. So long as you’ve got the data on who someone is and can properly track what they’re consuming, you’ve got them beat. I come back to this point often, but this is why the TechTarget/Informa deal is so consequential. It expands this sort of capability into so many markets.

However, it’s also relevant in consumer media. Last week, Best Buy and CNET announced that they were combining their ad inventory. According to Adweek:

The electronics retailer and the publisher are combining their ad inventory, allowing advertisers to buy across Best Buy Ads’ retail media network and alongside CNET’s tech-review-focused editorial content and measure whether ads seen on either platform drove sales. CNET’s independent product reviews and expert picks will also be placed in Best Buy stores and across its website and application.

“This partnership will allow us to follow that consumer journey from the point of research and intent, when we capture them in search, push them down into our content and recommendations, and then ultimately drive them over to Best Buy and see what they’re researching and ultimately what they’re purchasing,” Newman [CNET’s EVP of Revenue] explained.

In the press release, the two companies reported that “86% [of in-store test consumers] said that seeing CNET’s content while shopping made them more confident in their tech purchases, and the content helped garner a 25% lift in purchase intent.”

Best Buy and CNET can turn around and take this contextualized data to prospective advertisers and show them how it helps them boost sales. This is why Mike Mallazzo recommended that Best Buy acquire CNET back in a February op-ed. He wrote:

Best Buy Ads already include activations with influencers, affiliates, and experimentation in onsite product reviews. Adding CNET’s wealth of inventory and customer data would allow for some very complex packages to be built for brands that advertise on the network, focused on accelerating discovery for high-ticket items. 

There’s a key point here… customers trusted CNET’s content, which helped drive those sales. This is why it can’t just be data about the individual. It also needs to be the consumption behavior. It’s about connecting the advertiser with the buyer at the right time.

This is the moat. Being able to make that connection is the competitive advantage that media companies have. The days of anonymous advertising sales are over.

AMO Pro: Exploring Ways to Incentivize Talent

A couple of weeks ago, I talked about how media companies must invest more in their star talent. And while it’s good to say it, I thought it was worth exploring a few ways media companies might try to do it.

First, we spoke with Axios’ Jim VandeHei, who joined the AMO Podcast. He talked about the risks of tying too much of the talent’s incentives to their core product because things like ad sales may be outside their control.

Dan Shipper, CEO of Every, discussed how the incentive has evolved. In the early days, they used a reader survey to determine which writers were keeping people engaged. But as Shipper explained, it was incredibly complicated. As the business has evolved, they’ve introduced what Shipper refers to as audience equity.

Finally, I offer a very technology-forward approach to incentivizing talent. Using a CDP, you’d create a partial point system where different steps of the reader journey are rewarded accordingly. It’s an interesting thought experiment and likely hard to get right. But it’s a potential place to start.

Read the full story here and become an AMO Pro member to never miss another one.

G/O Media will be gone in 18 months

Step by step, the roll-up media company known as G/O Media sells itself into becoming a shell with nothing inside of it. According to The New York Times, G/O Media sold The Onion.

In an email to G/O Media staff that was obtained by The New York Times, Jim Spanfeller, the chief executive, said the company was “undergoing an extensive review of our portfolio with the intention of coring down to our leading sites in terms of audience and revenues.” He said G/O Media had agreed to sell to “a new Chicago-based firm called Global Tetrahedron.”

The website is the latest to be shed by G/O Media, which still publishes a few stalwart internet brands like Gizmodo, The Root and Quartz. In recent years, the company sold off Jezebel, Lifehacker, Deadspin and the A.V. Club. G/O Media was formed in 2019 by the private equity firm Great Hill Partners after it bought a collection of websites that were once part of Gawker Media.

To be specific, it now publishes six brands. And what comes next is anyone’s guess, but I return to my theory from last month. There are two ways to generate a return for private equity. You either need to build the company bigger, operationalize things, and then sell to a big buyer. Or, you sell things off individually and hope to generate a decent enough return.

And that’s what G/O Media is doing. I would be shocked if there weren’t active conversations about the other remaining properties in the portfolio. Spanfeller all but confirmed that when he said they are “undergoing an extensive review of our portfolio.” While the intention is to focus on its leading sites, the road to hell is paved with good intentions. I suspect we’ll see more announcements as the year progresses.

As for The Onion, itself, I can’t help but wonder if it’s a brand from a different era. With the ease with which anyone can be a comedian on social media, do we genuinely need an entire media brand to do it? This feels, to some extent, like what I wrote about last week. Just because a brand appears strong doesn’t mean the business itself is a good move.

But if it works, we might see G/O Media’s offshoots become a collection of successful properties. The former Deadspin team is doing Defector; Jezebel, AV Club, and Splinter are now part of Paste Magazine; and now The Onion is owned by an evil corporation, Global Tetrahedron. Maybe it’ll work.

Thanks for reading today’s AMO. If you have thoughts, hit reply or become an AMO Pro member to get an invite to the exclusive AMO Slack channel. I hope you have a great week.