Earlier this year, Bloomberg removed data on third-party programmatic ads from its website. They did so to start their own first-party ads platform called Audience Accelerator, and the results are astonishing! This move was made so that the company could better manage its consumer experience and direct advertisers to reach its audience by buying directly from them.
Advertising makes up only 5% of their revenue, which is a drop in the ocean when compared to their vast subscription model. Julia Beizer, Chief Digital Officer for Bloomberg told AdWeek that advertisement loading time and visibility reached 15% and 20% respectively. While click-through rates for upcoming campaigns were up to four times higher than before, CPMs improved by 20%.
How has Bloomberg benefitted?
Google and Meta’s duopoly over the news distribution industry has led to a severe decline in the sector. The decline has thrown tech companies into struggle as no novel revenue models have emerged.
Bloomberg’s move offers an analysis of how struggling publishers could change their businesses. According to Beizer, until recently, Bloomberg Media witnessed a decrease in advertising returns and has yet to recover from the revenue drop. In the first half of 2023, advertising revenues were down year-over-year. Bloomberg predicts an increase in advertising revenues in the second half.
The content on Bloomberg’s website drives consumers to visit the company’s website. As a result, subscriptions and ads are not their top priorities. However, that does not mean they do not care about their advertisers. Simply put, they understand that they need compelling content for advertising, rather than one designed to generate impressions. The publisher argues that net revenue will be achieved through an enhanced website experience. This will result in better consumer conversion and retention.
To implement the revised advertising model, Bloomberg cut ties with Taboola, the programmatic ad firm that helps companies capture a large stake in the advertising market. Their redesigned platform will give them hope for returns to starving publications looking for a turnaround. But analysts also believe that this move is only possible with someone of Bloomberg’s caliber. Bloomberg Media replaced six of its on-site ad units to replicate their efforts. They revealed an innovative commercial ad product for their newsletters which has multiplied their email advertising returns and increased CTR by 80% in April.
What can other advertisers do?
With this experiment, advertisers’ conflicts about balancing monetization and user experience are clearer. An immaculate advertising experience attracts advertisers and readers to the publisher, promising a deeper relationship with them.
For firms who cannot afford drastic changes, they can learn from Bloomberg’s content prioritization approach to strengthen ad value. Another strategy could be connecting with AI firms. Several worldwide legislative moves would impose the advertising duopoly to share revenues with online publishers. It would support stressed media outlets with ad strategy experiments.
Through this bold move, Bloomberg has propelled itself to new heights, set high standards in advertising, and harnessed the potential of a first-party advertising platform for unmatched results.