In a media landscape where advertising markets continue to display signs of softening, Dow Jones— the parent company of The Wall Street Journal (WSJ)—stands apart.
The company has been experiencing a growth paradox inspite of a decline in overall revenue for its owner, News Corp. The New York-based conglomerate (which holds stakes in several international news organisations) disclosed a 1.8% drop in revenue, amounting to $2.45 billion for the quarter concluding March 31, with net profit seeing a 39% fall.
The reported 6% reduction in ad revenue across various units, amounting to $393 million, is attributed partly to diminished ad expenditures by entities in the technology and finance sectors, as noted by chief financial officer Susan Panuccio.
In this evolving landscape, WSJ has showcased a notable 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.
WSJ's competitor, The New York Times (NYT), is a pertinent example where a subscription-centric model has been advantageous, making introducing a paywall a lucrative strategy over a decade ago.
NYT'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.
This intricate dynamic raises pivotal questions for publications opting for a subscription-first model: How does advertising find its place in such an ecosystem?
Campaign sat down with Dow Jones' chief revenue officer Josh Stinchcomb, on his recent trip to Singapore to find out WSJ's approach to first-party data, brand safety, AI and the overall advertising landscape.
Most consumption on WSJ's website is from logged-in users, according to Stinchcomb, who notes that having such users provides the Journal with first-party data, forming the crux of its advertising offerings.
"We possess extensive insights into who our users are, often extending to their industry and job function, allowing for precise targeting and extracting valuable insights on user preferences, reading times, and formats. This information empowers us to offer valuable advice and create tailored content for specific audiences, such as CFOs, leveraging our understanding of their preferences," explains Stinchcomb.
"Our substantial first-party data encompasses a diverse and influential audience, including business leaders, policymakers, and investors. Approximately 99% of the data we utilise for ad targeting is first-party, positioning us favourably in the advertising landscape, particularly with the anticipated decline of third-party cookies."
He continues: "This decline will likely depreciate the value of many advertising options, elevating the value of platforms like ours with abundant first-party data. Even though the complete phasing out of cookies, as announced by Google, has not occurred yet, we have been ready to adapt to this change for over 18 months, anticipating a shift towards a more value-driven advertising ecosystem."
As WSJ expands its digital subscriptions, the publisher is enhancing its first-party data collection, acquiring new user identities, and continuously growing its data on existing subscribers.
Growing its first-party data is achieved by observing subscriber consumption behaviours and creating opportunities for users to share more about themselves.
For example, downloading content might reveal a user's industry, and registering for a newsletter or an event might divulge their professional roles, like a chief marketing officer, providing valuable information that refines WSJ's ad targeting approaches.
WSJ wants to continually enrich what it knows about its existing subscribers while adding new digital subscribers. The Journal's new editor-in-chief, Emma Tucker, has pushed for differentiation, interest, and added value.
"The increasing complexity and disorder in the world, coupled with the prevalence of misinformation and the potential implications of AI, are making our services more sought-after. People increasingly recognise the value of our credible and nuanced reporting, seeking clarity in a chaotic information landscape," explains Stinchcomb.
"The continuous engagement and tailored experiences we offer to our subscribers, coupled with our commitment to deliver differentiated and insightful content, position us as a reliable source amidst the proliferating uncertainty and misinformation in today's world."
For news publishers, significant news events can impact their advertising revenue.
While WSJ has observed occasional surges in subscriptions during significant global events, the Journal's focus on business news results in less volatility than general news outlets, which might see substantial fluctuations, for example, during election periods.
Fundamentally, there is a stark difference between misinformation and trusted, factual journalism.
Stinchcomb claims both readers and advertisers acknowledge WSJ for epitomising the latter, establishing the Journal as a reliable source of high-quality journalism.
"This reputation alleviates concerns about the quality and integrity of content in our environment, serving as a strong foundation for our work," explains Stinchcomb.
"We are often categorised as a source of business and finance news rather than a general news outlet, positioning us more specifically on the spectrum and reducing concerns associated with the news environment due to our inherent focus. This perceived specificity and focus also diminish the risk of being deemed 'unsafe' for brands, granting us a natural advantage."
Despite these advantages, WSJ acknowledges its partners' sensitivities to specific topics. To accommodate this, they developed proprietary tools like the 'Safe Suite,' designed to optimise block lists.
Using block lists helps ensure the content's alignment with WSJ's partners' requirements, maintaining brand safety without compromising performance. It validates and modifies block lists in sync with third-party services like DoubleVerify, optimising the use of words within the Journal.
"This proactive approach to brand safety is bolstered by the inherent trust in our journalistic integrity and our specialisation in business-focused content, which generally provides more comfort than general news outlets," says Stinchcomb.
"Our initiatives and reputation together ensure a secure, focused, and trustworthy environment for our readers and partners."
AI in the news business
The rise in generative AI means it's poised to create substantial economic opportunities, wealth, and growth.
The industry is already witnessing an advertising boom revolving around AI, with technology companies emphasising their capabilities and consultancies positioning themselves as experts. New AI companies, not yet on the public radar, will also emerge as advertisers.
Stinchcomb sees this as a positive for WSJ as it forms a new ad category which will benefit the Journal's B2B advertising.
"From an operational perspective, we've been leveraging AI for campaign optimisation, and it's continually improving, aiding other aspects of our digital ad operations to enhance efficacy and increase efficiency. Thus far, AI has been a net positive, and more upside appears to be on the horizon," Stinchcomb explains.
"Regarding generative AI's use in ad campaigns, we haven't observed clients utilising it overtly in creating their ads. However, its potential use in crafting headlines or other content behind the scenes remains a possibility. We often collaborate on content with our partners, aiming to produce expert and engaging material for our readers."
The Journal has experimented with generative AI in crafting branded content but has found the tool is currently not up to par with its clients' and readers' expectations for such content. Therefore, WSJ has not used the tool to create the creative aspects of its offerings.
On the wider industry
Stinchcomb views the industry as primarily segmented into large platforms and paywall-first companies.
Despite possessing substantial capabilities and securing a majority of advertising dollars, large platforms like Meta and Google struggle with issues related to trust and limited diversity in advertising products.
On the other hand, paywall-first companies emphasise acquiring consumers willing to pay for high-quality and original content.
To be successful, Stinchcomb says companies should align themselves as either a platform or a paywall-first entity, as intermediate positions lack viability.
"We also aim to match their strengths by enhancing measurement and transaction ease, launching a client success team to optimise post-sale contact, and aiming to be the most measurable entity in the publishing space," explains Stinchcomb.
"Companies that are neither platforms nor paywall-first entities will likely face challenges. Several such companies, once deemed the future of media, are now struggling due to their lack of scale and first-party data. Predictions indicate a consolidation in this sector in the coming years."
Stinchcomb notes the podcast sector is experiencing a significant transformation, evolving from a somewhat chaotic and unregulated space to one approaching maturity, characterised by more standardised measurements and pricing structures.
This evolution is fueled by consumer interest in podcasts, suggesting a lucrative future for this medium and potentially leading to more sustainable advertising platforms and rationalised Cost-per-mille (CPM) development.
He points out Spotify is leading the charge in shaping the podcast advertising ecosystem, introducing rigour and advanced measurement tools.
In parallel, the advent of connected TV apps is ushering in innovative advertising models, marking a pivotal shift in the industry and presenting challenges for linear television due to its antiquated measurement methodologies.
Amidst the continuous upheavals in the industry, Dow Jones maintains a strategic advantage due to its commitment to cater to a dedicated B2B audience and its focus on delivering value to readers and advertisers, securing a stronger position in the turbulent media landscape.
"Our readers, primarily professionals who rely on us, provide a stable and non-discretionary audience base, insulating us from the fluctuations of the news cycle," says Stinchcomb.
"The focus is to keep enhancing our service to this community, creating mutual value and opportunities for our advertisers, and maintaining an optimistic outlook despite the predicted upheavals in the industry."