While conditions in the ad market for news publishers have been tough over the past year, the New York Times is one of the few that has found consistent growth in digital ad revenues.
Prior to its Q3 earnings, released yesterday, the Times had recorded year-on-year growth in digital ad revenues in four of the five most recent quarters, hitting 7.8 percent growth in Q2. This trend continued into Q3, as digital ad revenues were up 8.8 percent year-on-year. Since digital ads now make up the bulk of overall ad income, total ad revenues during the quarter were up 1.1 percent, despite a 12.6 percent fall in print ad revenues.
The Times, it seems, has largely avoided issues which have plagued some other news publishers – namely falling traffic from social media and search, and advertisers’ avoidance of news due to brand safety concerns (or in many cases, poorly implemented brand safety filtering).
Lifestyle shift
The New York Times’s CEO Meredith Kopit Levien acknowledged both of these issues, and said that both have had an impact on the company. But in both cases, the Times is finding ways to work around these problems.
When it comes to traffic delivered by the tech giants, Kopit Levien said that numbers have been falling for around two years, contributing to broader audience headwinds. She added that the more recent emergence of AI-based tools like ChatGPT and AI overviews within Google’s search results have added further pressure.
The Time’s strategy here is straightforward. In Kopit Levien’s words, the Times’s aim is “to build resilience to those dynamics by making products that are so good that people seek them out and ask for them by name and build direct relationships and daily habits with them”. The company doesn’t report on its total audience size or daily traffic, but there’s evidence this strategy is working. Press Gazette’s most recent ranking of audience traffic, based on Similarweb data, found that the New York Times’s total traffic was up 13.7 percent year-on-year in September.
The company’s response to advertisers’ blocking of news content is a little more interesting. The Q3 results release stated that digital ad growth came largely from growth in open market programmatic advertising, which itself was driven by new ad supply across the Times’s products, as well as growth in direct-sold display advertising.
When asked about this growth in supply on the earnings call, Kopit Levien pointed to the release of new ad products, as well as overall inventory growth, within its lifestyle content category.
“It’s the case that we have new supply that has come online at one point or another this year in all four of our lifestyle products,” said Kopit Levien. “In games specifically, you saw the rollout of more ads in the games app, which is early, but we’re excited about it, and I would say more to come there. And also, more to come on The Athletic [the sports-focussed publication acquired by the NYT in 2022, which started running ads that same year] which continues to grow audience and continues to grow ad opportunities. But games and The Athletic are certainly the biggest within lifestyle portfolio in terms of […] the opportunity.”
In essence, it seems that the Times has partially circumvented advertisers’ blocking of news content by doubling down on advertising in its non-news related products, giving it a large supply of inventory which appeals to even the most news-averse brands.
This content isn’t completely immune to blunt brand safety blocking. For example, if a brand filters out the word ‘attack’, a large chunk of The Athletic’s content would be blocked by brand safety tools. And the fact that its core news journalism is harder to monetise than lifestyle content remains an issue for the Times, as well as other news publishers, and society as a whole. But in the short-term at least, the NYT’s investment in gaming and sports is helping it weather the storm.
