Nov 14, 2023 - Business

Media jobs slashed amid soft ad market

Illustration of a cursor pushing out a worker holding a cardboard box with their possessions.

Illustration: Shoshana Gordon/Axios

Media companies are cutting their workforces as volatility in the ad market persists for premium publishers.

Why it matters: Amid high interest rates and investor skepticism, media companies can no longer rely on raising short-term capital to insulate them from ad declines.

Of note: Unlike the ad crash during the outset of the pandemic, government subsidies like PPP loans are no longer available to small businesses.

Driving the news: Recurrent Ventures laid off a slew of employees Monday, including editorial staffers at Popular Science, The Drive and Domino, Axios reported.

  • Bloomberg Industry Group, an affiliate of Bloomberg LP that produces content for regulatory professionals, laid off at least 14 employees and said it would shutter its K Street office in downtown Washington, D.C.

Flashback: Last week, Vice Media Group laid off under 100 staffers as it ended production of some shows and consolidated its businesses from five to two.

  • Also last week, G/O Media suspended its woman-focused brand Jezebel and laid off 23 editorial staffers. CNBC Digital cut fewer than 20 editorial staffers.
  • Earlier this month, Condé Nast, the parent company of Wired, Vogue, GQ and Vanity Fair, laid off 5% of its staff, affecting about 270 employees.
  • Last month, the Washington Post announced its plan to offer voluntary buyouts in an effort to cut 240 jobs.

By the numbers: Nearly 20,000 jobs have been eliminated across the media industry this year as of October, according to Challenger, Gray & Christmas.

  • That's more than six times the number of job cuts compared to 2022 so far this year.

The big picture: The ad market recovery seen at Big Tech firms is not hitting premium publishers. Recent earnings reports from digital media companies show how weak the ad market has been for them.

  • BuzzFeed reported a 35% year-over-year decrease in ad revenue. IAC's Dotdash Meredith and Wall Street Journal parent Dow Jones saw 12% and 3% declines, respectively.
  • Major media networks are facing similar pressures. Warner Bros. Discovery, Comcast/NBCUniversal, Paramount, Fox and Disney posted a "12% average decline in linear ads" last quarter, Macquarie analysts estimated in a Monday note.
  • Double-digit declines are not only expected to continue into the fourth quarter but into next year as well. "We expect underlying ad growth to remain negative in '24 excl. major sports," the analysts wrote.

Between the lines: While TV companies have seen huge gains in streaming advertising, those efforts have been unable to offset the declines from high-margin traditional TV ads.

  • As Macquarie noted, direct-to-consumer streaming services posted 29% average ad growth with their ad tiers, but most streaming services still aren't profitable.
  • Meanwhile, tech giants like Google, Meta and Amazon reported strong ad growth as more marketers invest in search, social and retail advertising.

Be smart: Analysts don't believe macro conditions, including industry strikes, are broadly to blame for a slowdown in advertising for publishers.

  • It's more likely that the rise of more efficient options is pushing budget-conscious marketers to lean more heavily into performance advertising platforms, like TikTok, Meta and Alphabet — all of which have made major improvements in AI-driven ad products this year.
  • Brian Wieser, a top advertising analyst, told Axios that marketers are primarily pulling budget from TV (including CTV) to help fuel investments in performance advertising. "But premium publishers could be another" place where dollars are being yanked.

The bottom line: "Life is tough for media networks when ad spending falls," wrote Macquarie analysts.

Go deeper: Media layoffs loom large over 2023

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