Shawn Lim
Nov 8, 2023

Bloomberg Media CEO Scott Havens on relying less on social media, ad revenue and AI

On a recent trip to Singapore ahead of the sixth annual Bloomberg New Economy Forum this week, Bloomberg Media CEO Scott Havens sat down with Campaign to discuss how it dealt with the drop in traffic from Facebook, which also impacted its ad revenue.

Bloomberg Media CEO Scott Havens on relying less on social media, ad revenue and AI

Media outlets like Bloomberg are facing a substantial decrease in the number of visitors coming from Facebook due to a change in the platform's algorithm in May 2023, which inadvertently led to reduced exposure for posts containing links.  

Industry observers suggest that Facebook's decision to phase out features that directed users to external news websites is causing the decline in traffic, notably the removal of Instant Articles and compounded by the loss of personnel overseeing news partnerships at Facebook. 

Even though Facebook's parent, Meta may have promised some publishers certain fixes within a few months, the issue has reportedly persisted without further communication from the platform. 

The reduced number of visitors reflects a larger pattern in the industry, with Bloomberg losing around 10 to 15 million monthly visitors from Facebook, according to Scott Havens, the chief executive of Bloomberg Media. 

Aside from dealing with the drop in traffic from Meta, Bloomberg also has had to deal with the change of ownership and direction of X, formerly Twitter, with whom it partnered for its QuickTake video service. 

Having to deal with the upheaval caused by Meta and X has impacted Bloomberg's advertising and overall revenue. 

Sitting down with Campaign on a recent trip to Singapore, Havens tells us how the publisher is changing its audience strategy, Bloomberg's approach to subscriptions, ad revenue, and AI. 

Revamping its audience strategy

After visitors to its site dropped when Facebook changed its algorithm, Bloomberg knew it had to act. 

The loss became an opportunity for the publisher to focus on engagement and prove its value so that users will continue to seek Bloomberg out directly.  

"Our editorial and product teams have been working hard to enhance our offerings, and we have launched a new marketing campaign, Context Changes Everything, to emphasise our unique approach to providing the story behind the news," Havens tells Campaign.

"This strategy aims to cultivate a smaller but more dedicated and engaged audience, transforming casual visitors into loyal brand advocates. We are moving away from reliance on indirect traffic from search and social media and building direct relationships with our audience." 

Another part of Bloomberg's new audience strategy focuses on accelerating website performance, streamlining user experience, and introducing new personalisation features, some of which the publisher will implement in the latter half of the year. 

Havens expressed his relief that the publisher initiated these upgrades before the decline in traffic from social media.  

He explains as referral sources dwindle, the competition for user attention intensifies, making it imperative that Bloomberg's digital platforms deliver an exceptional experience for its readers.  

"We aim to understand and cater to our audience's needs, emphasising personalisation and utility. One area with significant potential is vertical search on our websites. A search query like "oil" yields a simple list of articles, which isn't particularly helpful. Moving forward, we envision a search function that not only provides information but also context," explains Havens. 

"For example, asking "What's the five-year return on IBM stock and why did it drop 10% yesterday?" should yield a direct answer from our site, leveraging the news and data we have as part of the subscription service." 

The new audience strategy has also helped soften the blow from the relationship change between Bloomberg and X after Elon Musk took over.  

Musk's initial decision to move away from advertising has impacted Bloomberg's QuickTake short-form video service on X, an advertising collaboration between both parties launched in 2017.  

Havens explains Bloomberg always had a close partnership with X, but when Musk bought the platform and either fired or laid off thousands of employees, it caused the association to lose momentum.  

"This was unfortunate because our product was unique and performed well for our clients. I have recently been in touch with Twitter, and we are hopeful about rekindling our working relationship, as brands are showing interest in returning to work on the platform," says Haven. 

"Despite these setbacks, the QuickTake team remains active, producing long and short-form videos. We are distributing these on YouTube and have also started a new partnership with LinkedIn to collaborate more closely." 

For other social platforms, Havens notes that while many of Bloomberg's journalists are on TikTok, he points out the platform does not offer an easy way for publishers to monetise content.  

He says he has discussed this with TikTok's team, and they are working on improving this aspect, given the platform's high user engagement.  

In addition to these efforts, Bloomberg has also invested in its original programming, creating longer-form shows like Emily Chang's The Circuit and the upcoming Optimist's Guide to Earth with Nikolaj Coster-Waldau, as well as The Future with Hanna Fry.  

These series, which are not strictly news but related to current events, technology, and climate change, are available on Bloomberg's streaming platform and on Bloomberg TV during nights and weekends. 

Bloomberg is mindful of the challenges presented by social media, particularly platforms that permit anonymous commenting, like X.  

Havens says these spaces can be a mixed bag, offering both valuable, constructive feedback and, unfortunately, hate speech. He acknowledges it is a complex issue to manage, and naturally, Bloomberg, like all brands, prefers to avoid association with harmful content. 

"Regarding brand safety, our YouTube channel stands out as a secure environment for advertisers. It is a space filled with our content, over which we have control, and this instils trust in our brand partners. They are willing to collaborate with us there and on other platforms, we manage," explains Havens. 

"While there may be more 'noise' on external platforms, our brand partners have grown accustomed to including these in their advertising mix, even though we do not own them. It is a part of the digital ecosystem that can be challenging to regulate." 

Ad revenue and subscriptions

Despite revamping its audience strategy, 2023 has been a relatively good year for Bloomberg. In the US, the publisher's largest market, Bloomberg has seen a resurgence of advertisers' activity in the last few months after a slow start to the year.  

Havens claims that in the Middle East, Bloomberg expects its ad revenue to increase by 60-70% and almost 50% in Asia Pacific in Q2. Overall, Bloomberg's revenue remained flat in the first half of 2023, but the publisher anticipates growth in the second half.  

Havens admits the publisher's growth in 2023 will not match the 50% growth Bloomberg saw two years ago or even the 16% from 2022, but the publisher remains cautiously optimistic. 

For its products, Havens says video remains highly sought after by brands, especially those looking to revamp their image through brand marketing.  

He explains video tends to be more impactful than other formats. With Bloomberg's two streaming networks and social video presence, the platform's 'video everywhere' package is proving quite effective.  

Video now constitutes a significant portion of Bloomberg's advertising revenue, and display advertising remains strong, according to Havens, some of which are visually like video content. 

Another significant revenue stream is subscriptions. According to Havens, Bloomberg is 'on the verge' of surpassing 500,000 subscriptions, five and a half years after launching a paywall on its site.  

A key factor has been our shift to selling enterprise subscriptions, explains Havens, allowing Bloomberg to secure multiple subscriptions simultaneously rather than one by one. 

However, Havens acknowledges that Bloomberg subscriptions are not yet on the level of its competitors, The Wall Street Journal (WSJ) and The New York Times (NYT). 

WSJ has seen an increase in digital subscriptions, totalling 3.3 million, marking a surge of 132,000 from the preceding quarter.  

WSJ's print and digital subscriptions averaged around 3.8 million, contributing to the total average subscriptions of 5.12 million for all consumer products under Dow Jones, indicating a growth of 174,000 from the last quarter. 

At the NYT, the publisher's paywall now contributes to nearly half of the Times' revenue, while digital advertising contributes 12.5%, excluding the substantial income from print advertising.  

Moreover, acquisitions like Wordle, The Athletic, and Wirecutter are broadening subscription offerings and presenting new avenues for crafting ad products, resonating with the diverse interests of a discerning reader base. 

Havens argues that in advertising, Bloomberg consciously avoids being grouped with general news outlets like WSJ and NYT. As a business-focused platform, he says Bloomberg attracts 'a precious' audience that brands are keen to engage with.  

"Unlike typical news brands, we do not dwell on adverse events to the same extent, which works in our favour since brands tend to shy away from associating with negative stories like wars, famines, and disasters," explains Havens. 

"We approach these topics from a business perspective, focusing on their impact, which differentiates us and doesn't affect our appeal to advertisers as much. Our core advertising categories like finance and enterprise technology have rebounded and are performing well." 

Havens adds: "There is also an increased emphasis on tourism and economic development funds, particularly in Southeast Asia and the Middle East, where there's substantial investment in tourism promotion. We're actively trying to increase our presence in these markets." 

In addition, on the subscription side, Havens observes a noticeable trend of news fatigue.  

He suggests that after years of intense coverage on topics like death and the pandemic, people have shifted their interest towards lighter subjects such as food and travel, showing less enthusiasm for current affairs.   

"We have not reached our goal yet. Subscriptions currently make up roughly 25% of our business. Pure advertising represents about 50%, while live event sponsorships account for approximately 12-13%," explains Havens.   

"Similarly, branded partnerships and licenses contribute around 12-13%. Our revenue streams are diverse, not just in type but also geographically. Now that 50% of our business comes from outside the US, we have a natural hedge."   

Havens continues: "For instance if the US market is experiencing a slowdown, but the Middle East is thriving, we are balanced. Overall, I am quite pleased with this setup as it allows us to navigate the fluctuations of different markets." 

Live experiences have also seen a surge for Bloomberg as the publisher has seen a strong desire post-pandemic for people and sponsors to connect in person.  

For example, Bloomberg's New Economy Forum in Singapore, its most significant event, brings together public and private sector leaders who will return for the fifth year from November 8-10. This year's theme focuses on embracing instability and addressing global challenges such as geopolitical tensions, inflation, war, famine, and climate change.  

Former MD of the International Monetary Fund Christine Lagarde (C) speaks while former New York city mayor Michael Bloomberg (L) and former Singapore's Deputy Prime Minister Tharman Shanmugaratnam (R) listen during a panel discussion at the Bloomberg New Economy Forum in Singapore in 2018

"For our brand partners, the forum offers access to a gathering of 500 of the world's most influential people. It is an exclusive, premium event where brands can engage with decision-makers from various countries and Fortune 500 companies," explains Havens. 

"The opportunity for thought leadership is significant, but networking is just as crucial. The connections made here go beyond the main stage content, adding immense value for our partners." 

Bloomberg also has plans to take 'Screen Time', an editorial franchise focused on media and Hollywood, to markets like Korea, where K-pop and Korean dramas are making a significant impact internationally. 

Bloomberg's approach to AI

Despite the buzz around AI and generative AI, artificial intelligence and machine learning have been integral to Bloomberg's operations for more than eight years due to the sheer volume of news the publisher produces.  

According to Bloomberg, AI is responsible for writing roughly half of its stories on the terminal—these are typically straightforward pieces, like reporting a stock price surge by 10%, and they undergo quality checks. 

Bloomberg has also implemented 'the bulletin', an AI-powered summarisation tool that condenses articles into a single sentence, enhancing the user experience by allowing quick understanding of content. 

AI is also used for audience modelling on Bloomberg's consumer data platform, collecting first-party data to target specific segments like financial advisors and finding similar profiles with an 'audience accelerator'.  

Meanwhile, machine learning predicts user subscription likelihood, customising the paywall experience to optimise subscription conversions or ad revenue. AI translation services have also enabled the launching of a Spanish YouTube channel with accurate voice-to-text and voice-to-voice translations, facilitating global content distribution and multilingual broadcasting of Bloomberg TV. 

"However, we are cautious with the deployment of translation technology due to the potential market impact of our news," explains Havens. 

"While we are still in the testing phase, we are optimistic about using AI to clip TV segments, providing our producers and editors with a selection of clips for social media, radio, and other platforms. Ultimately, we view AI as a potent tool to connect the dots for our users, offer more utility, and increase our team's efficiency." 

The road ahead

The advertising market's future is uncertain, with potential global recession fears affecting spending. However, the recent uptick in ad spending suggests that fears may not materialise.  

The key to stability for Bloomberg is diversification. As Havens says, the publisher's global presence and multi-platform advertising opportunities—spanning audio, print, live events, and more—provide a buffer against market fluctuations.  

"We are positioned in a unique niche, reaching an influential audience that few can access, giving us a competitive edge. I am optimistic about growth, especially considering the inflation rate and our tendency to outperform it," explains Havens.  

The impending end of third-party cookies by Google could be disruptive for Bloomberg. Still, Havens is confident the publisher's early investment in collecting first-party data through its paywall will pay dividends.  

First-party data will become increasingly valuable as the reliance on third-party cookies diminishes. Bloomberg has already taken steps to clean up its ecosystem by eliminating third-party programmatic advertising. 

While removing cookies has impacted Bloomberg's financials, Havens says, without going into details, he stresses this was the right move to protect the quality of the publisher's audience engagement.  

"Looking ahead, the growth of streaming and the shift from traditional TV advertising present significant opportunities. We are well-positioned with our ad-supported channels on various platforms, and I anticipate this area will boom next year," says Havens.  

"Despite some market volatility, I hope we are moving past the bumpiness and towards a more prosperous year ahead." 

Source:
Campaign Asia

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