US publishing giant Dotdash Meredith, which owns titles including People, Entertainment Weekly, InStyle, and AllRecipes, eked out one percent revenue growth year-on-year in Q1, according to parent company IAC’s earnings yesterday, with seven percent growth in digital revenues outweighing print declines. And while executives said the overall state of the ad market is mixed at the moment, the company believes its moves to build direct relationships with audiences and advertisers, while also embracing AI, are paying off.
Digital ad revenues were up one percent year-on-year, with Dotdash Meredith’s direct and programmatic sales moving in opposite directions. Direct ad sales were up, helped by the company’s investment in recent years in its in-house ad targeting technology D/Cipher, which uses the publisher’s user data to power intent targeting. More than half of direct deals are now run through D/Cipher, and Dotdash Meredith says clients using the tool tend to spend more and grow their spending faster than the rest of its client base. Recently the company has begun selling third-party inventory through a version of the tool, called D/Cipher+, opening up a new revenue stream.
Programmatic revenues meanwhile were down. Dotdash said this was partly due to budgets moving from programmatic to direct sales, but the company also saw a three percent decline in core sessions, lowering impression volumes. The publisher suggested that programmatic revenues could be hit by big Chinese spenders like Shein and Temu slashing their ad spend as a result of US tariffs. Executives said neither company spends directly with Dotdash Meredith, and both brands tend to be priced out of buying its inventory in programmatic marketplaces. Nonetheless the withdrawal of major spenders from the marketplace could have a big impact on pricing.
Out with the old tech, in with the new
While Dotdash Meredith’s CEO Neil Vogel said on an earnings call following the results that it’s hard to predict the state of the ad market going forward, given widespread economic uncertainty, the publisher still predicts healthy digital revenue growth of between 7-10 percent for the full year. And Vogel said that longer term moves that Dotdash has made to reduce its reliance on third-party platforms has strengthened its position.
A big part of this has been encouraging more direct visits to its sites and properties. Vogel said that when IAC acquired Meredith and merged it with Dotdash back in 2021, around 60 percent of the combined publishers’ traffic came from Google search. That figure has fallen to just over a third.
More broadly, Vogel said the company has worked to reduce any dependence on Google. Asked about Google’s latest change to its third-party cookies plans, Vogel said he doesn’t think the news makes much difference to Dotdash’s prospects, partly due to its investment in its own technology. And questioned on Google’s antitrust trial in the US and the potential consequences for publishers, Vogel said Dotdash is keeping a close eye, but isn’t relying on external circumstances to change its own prospects.
“From a business perspective, it’s like my favourite line from my favourite TV show, The Wire: ‘This is Baltimore gentlemen. The Gods will not save us’,” said Vogel. “We will function, and always have functioned, as if we are on our own And we need to have great relationships with advertisers, great relationships with audiences, really compelling offerings, really compelling brands, and we will be fine.”
AI openness, mixed with caution
While Dotdash is aware of the perils of leaning too heavily on major tech companies, the publisher has signed a licensing deal with OpenAI. And Vogel said that so far, the AI giant has been “a really productive partner”.
“It’s been very, very positive,” he said. “We said we want a seat at the table with these guys that are at the top of the spear on these things, and I think for the first year, we were right. It’s been really, really helpful for us in terms of how we are moving AI into our processes and getting a say in the future of how this stuff is working.”
This embrace of AI might look like it contradicts Dotdash Meredith’s moves to reduce its reliance on Google. But there are some significant differences between the two relationships.
For a start, Dotdash is directly paid for licensing content to OpenAI. The two companies haven’t disclosed how much, but licensing and other revenues in Q1 were up 30 percent year-on-year, which was due primarily to the OpenAI partnership. Vogel also said that Dotdash’s relationship with OpenAI is also helping it roll out its own AI-based tools and strengthening D/Cipher.
And while the publisher is working closely with OpenAI, it’s still seemingly wary of rushing into any other AI partnerships which might harm it in the long run. Vogel specifically mentioned that Dotdash doesn’t “have productive relationships with other people in [OpenAI’s] space,” indicating that other businesses have been unwilling to offer the same sorts of value, or terms which Dotdash deems fair.
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