Sep 12, 2022 - Economy

New York Times brings ads to The Athletic

Screenshot of The Athletic's home page on Sept. 12.

The New York Times on Monday debuted ads on its subscription sports website, The Athletic.

Why it matters: The Times hopes advertising will help The Athletic become profitable in the three-year time frame it gave investors when it acquired the outlet in January.

Details: To start, the ads will appear on the most visible spaces within The Athletic, like its homepage, and will mostly be display ads, not sponsored posts. Pre-roll is not being introduced on the site.

  • In an interview, The Athletic's chief commercial officer Seb Tomich said the company is using the same types of ad products used in other Times products to create continuity within The Times experience and to bring advanced capabilities, like shopping, to The Athletic's advertisers.
  • "The Times has such a great advertising playbook for how to have premium ads and a subscription product, so that felt like a no-brainer," he said.
  • Rates for the ads will be "on the higher end of the market," Tomich said, but as a whole, "we want to be largely in line with The Times." The average CPM (cost per 1,000 impressions) of a display ad on The New York Times website is between $15 and $25, depending on how much targeting is layered on top of it.

In a letter to subscribers, The Athletic publisher David Perpich said the new advertising experience "should feel seamless" and "will allow us to invest further in this world-class sports journalism."

  • "Rest assured that the integration of advertising has no impact on our journalism. Independent journalism will always sit at the core of who we are at The Athletic," he wrote.

By the numbers: The Athletic made around $65 million last year in top-line revenue, but lost around $55 million in expenses. It made less than $10 million in advertising last year, and most of its ad revenue came from podcasts.

  • While operating losses are expected to decline in subsequent years, Times executives don't foresee the company becoming profitable until 2025.
  • Tomich said he feels confident that The Athletic will be able to hit that goal. He expects The Athletic's commercial team to grow to roughly two dozen globally by the end of the year.

What to watch: The introduction of advertising should be seen as the first milestone in introducing more commercial opportunities to The Athletic outside of subscriptions, Tomich said.

  • In the future, licensing, ticketing, fantasy and merchandise "will be a big part" of The Athletic's commercial expansion, he noted.
  • Ticketing partnerships, which are common with other sports publishers, could include striking exclusive deals with ticket vendors to sell seats to games.
  • The Athletic could potentially license its soccer coverage to outlets in markets where they don't think there's going to be a big subscription opportunity.

Between the lines: The Athletic currently has a relationship with BetMGM as its official betting partner in the U.S. and Canada. In the U.K. it works with Paddy Power and bet365.

  • "As long as we can maintain our editorial standards, we're interested in expanding those partnerships," Tomich said.
  • The company doesn't have plans yet to introduce commercial opportunities around name, image and likeness rights for college athletes, although it covers the topic editorially.

Be smart: The site has lined up a few unexpected sponsors, including Chanel and electric vehicle company Polestar. The introduction of premium ad placements on The Athletic will give advertisers outside of typical sports sponsors, like consumer packaged goods companies, a place to run ads adjacent to quality sports content.

  • "We see an opportunity to go after things like the luxury sector, the financial services sector and the watch sector," as well as apparel, retail banking and insurance, Tomich said. "These are not areas that have necessarily been The Times' strong suit that now The Athletic can bridge those relationships too."

The big picture: The introduction of advertising to The Athletic is part of a wider plan by The Times to aggressively expand its advertising business across its bundled products, like games and sports.

  • The Times' annual subscription revenues finally surpassed its advertising revenues 10 years ago in 2012. But its advertising business has grown in the past two years, thanks largely to investments in new products and first-party data capabilities.
  • While some of its advertising practices vary by subscription product, "the standards are exactly the same," Tomich said.

What's next: Tomich said he hoped a commercial expansion of The Athletic will allow the company to invest in new verticals, like women's sports, F1 and more World Cup coverage.

  • While the publication is only in English for now, it will likely run some tests in other languages, like Spanish.

Editor's note: This article has been corrected to note that Polestar's ads will be on The Athletic's homepage at a later date, but not initially.

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