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Reasons for news advertising as dollars dry up

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Feb 1, 2024
GroupM's Susan Schiekofer, Meta's Samantha Stetson, Columbia Journalism School professor Bill Grueskin and Axios' Kerry Flynn sitting on chairs onstage

GroupM's Susan Schiekofer, Meta's Samantha Stetson, Columbia Journalism School professor Bill Grueskin and Kerry Flynn at IAB's Annual Leadership Meeting on Jan. 30, 2024. Photo: Kirsten McKenna

Advertisers' lack of commitment to funding news publishers has gotten worse as many choose to avoid the sector entirely.

Driving the news: About 32% of U.S. advertisers have been given directives to completely block the news category, according to a recent study by Prohaska Consulting that was presented at IAB's Annual Leadership Meeting this week.

Of note: The percentage of ad budgets directed to news was already small and has dwindled from year to year, GroupM U.S. chief digital investment officer Susan Schiekofer said during an Axios-moderated panel at the event.

  • "It's really scary," Schiekofer said.

Zoom in: The media market has rapidly evolved, with ad dollars flowing to tech giants and away from legacy publications. Companies like Meta and Google have captured more ad dollars because they offer a high return on ad spend and easy ad-buying tools.

What they're saying: In addition to the charitable reasons to invest in the journalism industry, Schiekofer noted advertisers should be motivated by the high traffic and engagement around news stories.

  • Meta vice president Samantha Stetson said on the panel that she wants advertisers to think less about what "content to avoid" and more about what content they want "to support" and "be around."

The other side: For their part, news publishers could do more to "reengage" with the ad industry, Columbia Journalism School professor Bill Grueskin said on the panel.

  • "I think advertising used to provide a lot information, a lot of readers wanted it, whether it was housing ads or sales on tires," Grueskin said, noting that ads have moved on to other platforms and the news industry needs to pull them back.

The bottom line: The lack of ad dollars has decimated news outlets, leading to layoffs, fewer investments, consolidation and the shuttering of many local newspapers and digital media brands.

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