Why Advertising Is Critical to Covering the News

Most publishers can only salivate over News Corp‘s paid subscriber numbers — which reached an average of 4.27 million subscribers last quarter for its Dow Jones unit, which includes The Wall Street Journal, Barron‘s, MarketWatch and Financial News.

However, subscription revenue alone can‘t cover the cost of producing the high-quality journalism News Corp is known for, says Chris Guenther, SVP and global head of programmatic at News Corp.

“You need to have a robust revenue stream to support that, and advertising is part of that critical revenue stream,” Guenther says.

Digital advertising is in flux as data privacy concerns grow and third-party cookies disappear, yet Guenther does not see a future news business that doesn‘t include advertising.

In the first of this two-part interview, CafeMedia spoke to Guenther about News Corp‘s advertising revenue, journalism‘s societal role and the future of ad-supported content.

From a high level, what role does advertising play in funding your journalistic efforts?

In a single word, it‘s critical. Advertising is one of the pillar revenue streams for News Corp. We are lucky enough to have a substantive subscription business across some of our business units, and there are other areas like e-commerce, but advertising is consistent.

We‘re a news publisher. Journalism is crucial. We have papers with history going back to the 1700s, and the New York Post was founded by Alexander Hamilton in 1801. We have a long history of journalism that is ad supported. We‘re proud of the work done by our mastheads [and] of the premium editorial process — and there‘s a cost to that.

We‘re creating original content, and that‘s expensive. You need to have a robust revenue stream to support that, and advertising is part of that critical revenue stream.

What is your revenue mix?

It varies by title. Some titles are less subscription-oriented, like the New York Post, where advertising is more important. Others have a more balanced revenue stream. The Wall Street Journal is a well-known digital subscription model, which for many years was unique in terms of publishing. But advertising also is very important for them, and it‘s a large revenue stream.

How important is it to your core values as a news organization that your content, at least some of it, is available for free to people when they need it?

What we‘ve gone through as a society with COVID, and looking at the role journalism played in informing the public about what was going on, shows that people turn to publications like ours for trusted information during times of crisis.

News Corp is about informing people and providing utility to people. I mention utility because we also have properties like Realtor.com, which offers an opportunity for people to find new homes and sell their homes, but advertising is also an important part of that business.

Many of our leaders are former journalists, which shows how much it‘s ingrained into our DNA in terms of the importance of the editorial process and fact-checking. But, we also want to move quickly with breaking news because that‘s in our DNA too. The newswire business is about publishing things as quickly as possible, but it is still about publishing in a way that‘s as responsible as possible because people look to us for trusted news and information, especially during periods of crisis.

Are there challenges in featuring advertising on news and crisis content?

That also highlights the risk we [and other news publishers] face with advertising. It is well documented that when COVID first emerged, brand-safety vendors were suddenly blocking monetization against any content that mentioned COVID — and COVID was mentioned everywhere. I understand if they didn‘t want to monetize content with COVID misinformation. But it was pure journalism about the COVID crisis, which was impacting people across our country and around the world. Yet we as a publisher and other news publishers were being punished for that.

What is the future of ad-supported content? Are there any partnerships or formats you’re excited about?

I think there are a couple of different ways it‘s going to change. Separate from the loss of third-party cookies, we always need as clean of an experience as possible. One positive trend in our industry is a focus on viewability, which is a proxy for page load and cleaner ad experiences. We‘ve all gone to sites where there is an overwhelming number of pop-ups, pop-unders and floating ads all over the place blocking content. Publishers have done a better job in recent years of shifting away from that, and I think that‘s going to continue. Especially for a company like us, we don‘t want to overshadow our great content, and we want the advertising experience to feel natural, which requires ongoing design and UX work.

I think that there will be more lean-in on contextual alignment. That works great. Many of our publications have a natural contextual alignment, such as The Wall Street Journal with business and finance content. That‘s going to be more prominent going forward. And as we build out our first-party data, we have to make sure that‘s at scale, and there are also some industry standards emerging that will allow for first-party data to be passed along the bid stream in a controlled manner, allow for activation against it and have some consistency so the buy-side can activate at scale across multiple publishers.

These things are all going to evolve and improve, but ultimately, in the end, advertising will remain. Advertising is going to remain as an important revenue driver and an important part of the user experience.

This interview has been edited for length and clarity.