Data: SEC; Chart: Skye Witley;Axios
The New York Times is planning to aggressively expand its advertising business across its bundled products, like games and sports, executives tell Axios.
Why it matters: Over the past 10 years, the Times has pivoted its strategy to focus on attracting more consumer revenue via subscriptions. Now that it’s reached a critical mass of subscribers outside of news, it sees an opportunity to build more ad products that cater to those users.
- The Times now has more than 1 million subscribers for both its Games and Cooking products and more than 9 million paid subscribers total across all of its subscription offerings.
- While that’s a huge number compared to its competitors, it’s a tiny fraction of the 135 million people that engage with the Times’ content monthly for free via ad-supported products.
Details: A central part of the Times’ ad expansion strategy will be managed by veteran ad executive Mohit Lohia, who will be joining the Times from Amazon this month.
- Lohia will help scale the company’s premium and proprietary ad offerings across the whole subscription bundle over the next couple of years, said Alex Hardiman, head of product at the Times.
- A focus for Lohia, who has expertise in data-driven advertising solutions, will be figuring out how to expand the Times’ ad-targeting and optimization capabilities using the proprietary, first-party data it collects from its users.
- The Times was one of the first major media companies to begin phasing out all third-party tracking cookies in 2020. The Times’ privacy-focused ad products will ensure its ads business can grow despite any regulatory changes, said Lisa Howard, global head of advertising at the Times.
State of play: The Times is currently running tests and experiments to try to find the right balance between its ad offerings and subscription experiences across all of its products, but especially games.
- “Rule number one is not being disruptive or annoying,” Howard said.
- The Times uses a custom horizontal ad unit called the “flex frame” unit, for most of its premium ad placements. Those placements work well for news consumption, and will be broadened across its portfolio, but the company will also invest in new solutions that cater to user experiences outside of news.
Between the lines: A major part of the Times’ expansion into games was its acquisition of the viral word game Wordle earlier this year.
- While fans were excited to hear that the game would remain free, they bemoaned the idea of ads one day coming to it.
- When asked whether the Times planned to add advertising to Wordle in January, a spokesperson told Axios “not at this time.”
- Now, Hardiman said when asked about Wordle, “We’re looking at games. We want to be very, very thoughtful about where and how we test new premium ad units on any game.”
- Wordle has led to massive engagement bumps and gaming subscription adds for The Gray Lady. Last quarter was the company’s strongest ever for net subscriber additions to gaming, thanks to Wordle.
Catch up quick: The Times’ annual subscription revenues finally surpassed its advertising revenues 10 years ago in 2012.
- Since then, the delta between its two businesses has gotten bigger as its digital subscription business has taken off and its print advertising business has shrunk. Now, the company is focused on closing that gap by ensuring advertising “has a key presence in our essential subscription,” per Hardiman.
The big picture: The Times has laid out a plan to reach 15 million subscribers by the end of 2027. To do that, it’s pushing more consumers to buy its bundle of subscription products, which includes core news, cooking, games and now, sports.
- In January, the Times acquired The Athletic, a digital sports news publisher, and recently added its subscription offering to the Times’ bundle at no extra charge. The Athletic brought in 50,000 net new digital subscriptions last quarter, a testament to its growth under its new ownership.
Yes, but: The Athletic is losing money, and the Times expects it to continue losing money for the next few years while it continues to invest in growing the business, especially its ads products.
- Earlier this year, the Times’ longtime head of advertising Seb Tomich was named chief commercial officer of The Athletic.
- He will lead The Athletic’s foray into advertising later this year, an effort Hardiman described as “one of the first big moves” to scale the Times’ ad business across its subscription bundle.
- “Ads on The Athletic are going to look very much like ads on the New York Times,” Howard said. “It’s not that far away.”
Bottom line: “We do have a lot more surfaces to work with now,” said Howard.
Source: https://www.axios.com/2022/08/09/new-york-times-advertising-expansion