“Q1 is definitely off like a rocket,” said Riva Syrop, president of Apartment Therapy Media. Granted 2023 was admittedly “a soft year,” but total revenue for the quarter is up across all revenue lines, she said. AT’s total booked ad volume in Q1 2024 is pacing 20% up year over year while full year booked ad volume is up 40% year over year so far, indicating that advertisers are willing to think further out than in previous years.

“I don’t know that we’ll get back to the ultimate heights of that great year [a.k.a. the false spring of 2021],” said a revenue chief at one publisher. But “the current quarter will be a notable improvement even from last year.”

Coming off of a rough 2023, The Information reported that both BDG and Vox Media are pacing 10% up year over year in ad sales. Other digital publishers that spoke with Digiday are touting similar increases in Q1. 

“[We] walked into the quarter almost booked to goal which is a really strong place to be. I haven’t seen that happen in a while,” said Lindsey Abramo, CEO of World of Good Brands, which owns Hunker and Well + Good. 

Not all arrows are pointing up, though. The number of requests for proposals coming from advertisers, for example, has been lower in Q1 2024 compared to Q1 2023 for some publishers. However, bigger deal sizes and higher win rates appear to be offsetting the lower initial outreach from advertisers.

While RFP volume is down compared to last Q1 – which was a period when the WGB portfolio was still a part of Leaf Group – Abramo said that both average deal size and deal close rate are up 20% compared to the 2023 average. Client renewals were also up 30% compared to the 2023 average, she said.  

Apartment Therapy has not seen a decrease in RFP volume, but it has observed an expanded price point range for deals in Q1 2024, according to Syrop. Last year, RFPs either had “pretty big” budgets or budgets that were sub-$100,000, she said. In 2024, the mid-size range is back and the close rate is “much higher than anything we’ve ever seen before.” She wouldn’t disclose the exact close rate, but guessed that this was likely due to the fact that 65% of the direct-sold deals sold in 2024 so far were from renewals. 

Turning to earnings

Among publishers that have publicly reported Q4 2023 earnings to date, Dotdash Meredith and Dow Jones have been the exceptions in reporting digital ad revenue growth. And both publishers have forecasted continued revenue improvements in the first quarter or half of 2024.

Dotdash Meredith’s digital ad revenue totaled $185.5 million in the fourth quarter, up 3.7% year over year. CFO and COO Christopher Halpin added that throughout 2024, digital revenue for the publisher is expected to grow by 10% or more year over year while print revenue is expected to decline at a similar rate to the 12% decline it saw in Q4, particularly in the first half of the year.

In the final three months of 2023, News Corp-owned Dow Jones recorded its first quarter of year-over-year digital ad revenue growth since the quarter ending Sept. 30, 2022, News Corp CFO Susan Panuccio said during the company’s earnings call.

Without elaborating more on the current quarter’s revenue trends, Panuccio said that “strong revenue and profitability performance” is expected from Dow Jones throughout the rest of the fiscal year, which ends on June 30. 

Unlike Dotdash Meredith and Dow Jones, for Q4 2023 The New York Times reported a 3.7% year-over-year decline in digital revenue to total $107.7 million. But CFO William Bardeen said during the company’s earnings call that digital advertising revenue is expected to increase by low- to high-single-digits in the first quarter of Q1 2024.

Over the course of 2024, however, The Times anticipates that total advertising revenue will be down by mid-single-digits year over year while digital advertising will increase low- to high-single-digits year over year. 

Categories leading the way 

It appears that most of the growth in Q1 is coming from ad categories that are endemic to the publishers they’re advertising against. 

With lifestyle, home, health and wellness brands in the WGB portfolio, Abramo said that beauty, CPG, retail and pharma are the four categories that are exhibiting a sustained increase in spend this quarter. 

For Apartment Therapy, retail and CPG in the cleaning space, as well as home furnishings in general, are driving growth in Q1, said Syrop. But real estate advertisers are also increasing spending this year after a slower 2023.

For the revenue chief, enterprise tech was a major endemic advertiser category that had gone soft in 2023. “The category that probably gave us the most trouble last year,” they said. But the AI frenzy has helped it to bounce back in early 2024.

“Not only do you have pure AI companies advertising more, or new companies that have come into the mix, but you’re also seeing traditional spenders touting AI capabilities. So it’s creating a kind of renaissance of advertising in the tech space. That seems to be driving a lot of the rebound,” said the revenue chief.

And after a bit of “stagnation” in video and podcasting ads last year, both mediums are back to growth, the revenue chief added. While both make up “relatively small parts of the pie,” revenue generated from video and podcast ads are up about 20% year to date.

What we’ve heard

“If we really want to make a change here, if we really want to make a sustainable impact of not only supporting Black-owned media, but again, reaching diverse audiences at scale, this has to be addressed at an industry-wide level.”

– Kerel Cooper, Group Black’s president of advertising, on the latest episode of the Digiday Podcast. 

BuzzFeed finally sells Complex

E-commerce company NTWRK announced on Wednesday afternoon it is acquiring Complex from BuzzFeed Inc. in a $108.6 million all-cash deal.

Despite fetching roughly a third of what BuzzFeed originally paid to acquire Complex Networks in 2021, Sam Thompson, senior managing director at mergers and acquisitions advisory firm and investment bank Progress Partners, described the sale as a “reasonable deal.”

That goes to show the state of media company valuations today. These days, it’s not surprising to see a digital media company sell for less than 50% of what it was previously valued at in the height of 2020 and 2021, when valuations were “grossly inflated,” said Thompson.

Notably, BuzzFeed’s own market cap was $36.2 million when markets closed on Wednesday after being valued at $1.7 billion in its 2016 funding round.

The sale was first teased last July when The Information reported BuzzFeed was looking to sell Complex for $150 million. Then in October, The New York Times reported BuzzFeed was in talks to sell Complex for about $140 million to NTWRK – less than half of what BuzzFeed paid for the company in 2021. In December, The Information reported the price was likely to be closer to $100 million. The deal does not include the First We Feast (and Hot Ones) brand. 

Why BuzzFeed sold Complex

Strapped for cash and weighed down by debt, BuzzFeed have had little choice but to urgently offload one of its key assets.

“I think [BuzzFeed is] in a position where they don’t necessarily have the time to go out and find the highest bid. I think they were hoping to get a higher bid. But I would imagine there’s probably a limited set of buyers,” Thompson said. “We haven’t quite emerged into a seller’s market yet.”

BuzzFeed also announced on Wednesday it was planning a cost-cutting “strategic restructuring” that would reduce its workforce by 16% and “yield approximately $23 million in annualized compensation cost savings.” BuzzFeed said it will share more details on Feb. 28.

Why NTWRK bought Complex

In an interview with Digiday, NTWRK co-founder and CEO Aaron Levant – a co-creator of Complex’s annual ComplexCon event – said the two companies attract a similar audience of 18- to 34-year-old males interested in sneakers, streetwear and hip hop. The goal now is “marrying” Complex’s content platform with NTWRK’s commerce platform, such as layering NTWRK’s live video shopping capabilities into Complex’s sneaker and streetwear shows, he said. 

This year, NTWRK plans to invest “millions of dollars” into the company’s commerce, content production and events divisions to diversify Complex’s business beyond digital advertising, which makes up 95% of its revenue, Levant said. He declined to share more details.

Levant said First We Feast was not part of discussions around this deal. As a food-focused property, the brand isn’t a fit for NTWRK’s core commerce strategy, he added.

Over 85% of Complex’s more than 100 employees will remain part of the company, according to Levant. They will continue to work from one of the two-floor offices at BuzzFeed’s headquarters in New York City (BuzzFeed moved into Complex’s offices in 2022); NTWRK is subleasing the floor from BuzzFeed, he said. The two dozen or so Complex employees in Los Angeles will move to NTWRK’s headquarters there. (BuzzFeed said it received an additional $5.7 million as part of this deal, related to its New York offices and other employee costs.)

The employees not coming over to NTWRK mostly have shared responsibilities with other brands in BuzzFeed’s portfolio, Levant said. It’s unclear if those roles will be impacted by BuzzFeed’s upcoming layoffs. – Sara Guaglione

Numbers to know

15: The number of employees laid off from The Intercept, including the nonprofit investigative site’s editor-in-chief.

400: The number of local Canadian journalists being supported by a federal program called the Local Journalism Initiative (LJI). The program, which launched in 2019, issued $50 million over five years but is set to end on March 31. 

$1 billion: The amount of money that LionTree, a media advisory and investment firm led by Aryeh Bourkoff, raised in 2023 to support investments in media, entertainment, tech and gaming.

What we’ve covered

Atlas Obscura looks to raise $10 million at a $24 million valuation with help from smaller investors in a tough market:

• Travel publisher Atlas Obscura is in the process of raising $10 million in an investment round that includes 20 returning investors. 
• Smaller investors are participating through the venture capital investing platform OurCrowd. 

Read more about Atlas Obscura’s capital raising efforts here.  

Amazon wants a bigger slice of the DSP ad tech market: 

• Amazon’s bold ask of advertisers: Don’t just dabble, go all-in on us for your programmatic ads.
• The tech giant is trying to persuade advertisers to use its ad tech to buy ads from other publishers, not just on its own media.

Learn more about Amazon’s recent pitch to digital advertisers here. 

WTF is differential privacy?

• As the ad industry re-evaluates its approach to personal privacy, advertisers are searching for ways to collect data on people without compromising their privacy. 
• One of those alternatives has been called differential privacy. 

Watch a new video explainer on differential privacy here. 

Feeling betrayed after layoffs spree, more workers flock to freelance: 

• “Initially when I got laid off, I found myself almost unhirable because of my salary requirements, because I had worked in smaller companies but was paid very well,” said a Brooklyn-based graphic designer.
• Not seeing an obvious path to a traditional work arrangement, he opted instead to take on freelance projects with a variety of companies, including large employers that would’ve never considered him for a full-time role. 

Read more about the rise of freelance workers here. 

Research Briefing – The Cut expands as publishers overall increase ad products: 

• New York Magazine’s women’s fashion and lifestyle publication the Cut is expanding in 2024, adding more ad inventory as a result. 
• The Cut is not alone. Digiday’s surveys found that, overall, more than half of publishers (56%) grew their ad products last year.

Learn more about how publishers are increasing their ad inventory here. 

What we’re reading

The Independent is prepping to take control of BuzzFeed Inc in the U.K. and Ireland: 

In an effort to build scale to compete for ad revenue, the U.K.-based news site The Independent is in talks with BuzzFeed to assume control over the digital publisher’s commercial and editorial operations in the U.K. and Ireland, the Financial Times reported. The licensing deal would include HuffPost, Tasty, BuzzFeed and other titles within the portfolio. 

The New York Times is rolling out a new generative AI advertising tool: 

The Times is in the process of getting advertisers to test its new proprietary ad-targeting tool that uses AI in the second quarter, before planning to roll it out widely in the back half of the year, Axios reported. The tool was being built prior to the company’s lawsuit against OpenAI and Microsoft for copyright infringement. 

Former CNN CEO Jeff Zucker is on a media buying spree:

Over the course of about a year, Zucker and his investment firm RedBird IMI has made some serious investments in the media industry, from TV and movie studio Media Res to sports business media company Front Office Sports. The Hollywood Reporter spoke with Zucker about his most recent acquisition, film production company All3Media, which RedBird bought for $1.45 billion this week. 

The Guardian US scoops up Mehdi Hasan after leaving MSNBC:

After an abrupt departure from MSNBC, Mehdi Hasan is joining The Guardian US as a regular columnist, Semafor reported. Hasan’s programs on MSNBC did not generate a large audience, but his monologues and interviews did go viral online.