So far this year, it’s held up strong despite regional conflicts, sticky inflation, high borrowing costs and the possibility of several markets slipping into a recession.

And it looks set to keep going strong for the foreseeable future. In fact, spending experts have even revised their forecasts to account for the additional upside.

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To some degree that activity has already begun – Publicis bought a small consultancy in March called Spinnaker SCA, while just last week in Europe, Mediaplus acquired Target Media and media advisory MediaSense bought PwC’s U.K. consultancy. On a smaller scale, CG Life recently bought digital health marketing agency Toolhouse. 

There’s more to come, as a few companies vie to acquire media giant Paramount, which controls CBS, several cable networks (MTV Nets and Showtime, among others) and a production studio. The most serious suitor, Skydance Media sweetened its offer last week while rival studio Sony Pictures, supported by Apollo Global Management, has backed off from its offer.   

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This might be described as cautious optimism.

While it could seem a bit verbose, the call for nuance is warranted: The enthusiasm for online ad spending is now checked by the gradual phase-out of detailed tracking that fuels it. The surge in connected TV enthusiasm has hit a sobering plateau, as the industry comes to terms with its limitations as a stand-in for traditional display advertising. Moreover, retail media, the trend du jour, teeters on the brink of a transparency debacle, entangled with sites created solely for advertising.

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First, let’s set the stage: There’s a growing buzz about a resurgence in dealmaking activity. Banks are getting involved, rumors are flying left and right, and actual deals are being inked. All signs point to deals reaching a tipping point. However, the big question remains: When will this tipping point actually occur? No one wants to make a move too soon, given the uncertainties surrounding borrowing costs, industry dynamics and the political landscape.

But hold up — how long has this thaw been happening? On the surface, it seems like a relatively recent shift — since the turn of the year, with notable deals like Walmart’s $2.3 billion splurge on Vizio, Triton Digital nabbing AI brand safety startup Sounder and LiveRamp investing $200 million in Habu. However, dig a bit deeper, and some argue it dates back to last summer. Ad tech economist Tom Triscari, for instance, points to DoubleVerify’s acquisition of Scibids. The ad verification firm paid a 44% premium on enterprise value and 16x EBITDA — a move that seemed fair to many in the industry.

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The non-cash transaction means Q.Digital effectively takes over Outsports’ cost of operations and revenue from Vox Media, keeping the team intact. All seven people on the Outsports team have moved to Q.Digital as part of the “acqui-hire” deal, including co-founders Jim Buzinski and Cyd Zeigler and five contributors, said Scott Gatz, CEO of Q.Digital. Outsports officially migrated to Q.Digital on March 4, Buzinski said.

Vox Media acquired 24-year-old Outsports in 2011, and it was the only LGBTQ publication at the company, Buzinski said. When Gatz heard that Vox Media was looking at ways to scale back its portfolio at the end of last year and that the Outsports team was at risk of shuttering, Q.Digital swooped in, he told Digiday.

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Only place to go is up

During a fairly positive Q1, some publishers released their Q4 earnings reports, reminding the industry that ad revenue may be on the come-up, but it’s based on a new low set in 2023.

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Atlas Obscura CEO Warren Webster told Digiday last year that the media company wouldn’t go through another fundraising round until it reached profitability amid a tough media market. In an interview for this story, Webster declined to say whether the company turned a profit last year but noted it did at least “break even” in 2023. And even though market conditions haven’t improved all that much, the company has gone ahead with the current fundraising effort due to its own business growth in 2023, Webster said.

According to Atlas Obscura’s page on OurCrowd, the publisher forecasted a 19% revenue increase in 2023 over the prior year. Webster declined to share how much revenue the company made last year, citing ongoing accounting procedures. The company was on pace to generate $24 million in revenue in 2023, Adweek reported in August. Webster previously told Digiday that the company generated $18 million in revenue in 2022. (For the record, a 19% increase over $18 million would equal $21.4 million.)

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But how can the Vox Media-owned title afford to expand at a time when most large digital publishers are undergoing layoffs?

Vox Media chief revenue officer Geoff Schiller told Digiday the title’s expansion is justifiable due to an increase in advertiser demand (especially in categories such as luxury brands, retail, beauty and CPG) and a need to keep up with that demand. The Cut’s advertising revenue — the majority of the publication’s business — is up year-over-year, though he declined to share by how much. A New York Magazine spokesperson said the company has hit its revenue goals for the first quarter, and the Cut’s average advertiser deal size and number of deals won is up. Schiller and the spokesperson declined to share specific details. Schiller said the company is investing some of that revenue back into the Cut to grow its audience this year. 

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“We continue to experience limited visibility in the advertising market,” CFO William Bardeen said in a call with shareholders on Wednesday morning.

The Times missed its Q4 outlook on advertising sales, with ad revenue decreasing by 8.4% year over year to $164.1 million. In its Q3 earnings report, the company’s guidance expected ad revenue in Q4 to change between a decrease in the mid-single-digits to an increase of low-single-digits. The Times doesn’t seem to expect this to get better in Q1 2024, with an outlook of an expected decrease in the mid-single-digits for total advertising revenues year over year.

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Between the unknowns of how CMOs will be executing ad budgets and what a major election year will do to advertisers’ appetites for showing up next to election coverage, 2024 is looking like it’ll be another year that’s too hard to predict. But that doesn’t mean that media leaders are twiddling their thumbs waiting for the fog to clear. 

Instead, the heads of publications including Bloomberg, The Atlantic, The Independent, The Wall Street Journal, Time and Vox Media all are banking on the categories and content types that are showing more promise than others and homing in on topics that are top of mind for advertisers to hopefully set their ad businesses off on a positive note in the new year. 

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This week’s Media Briefing takes a look at the top trends from 2023 and how media companies fared in light of a less-than-stellar ad market.

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Semafor is about to close the book on its first full calendar year, having launched in October 2022 as a media and events company. And despite launching during a tumultuous time for any media organization, Semafor’s co-founder and CEO Justin Smith said that his team had profitable months this fall, even coming close to breaking even in the fourth quarter of 2023. 

This accomplishment was made possible thanks, in part, to a combination of designating events as a core segment of the business as well as keeping the team as lean as possible for as long as possible, Smith said on the latest episode of the Digiday Podcast.

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Her announcement comes as the U.K.-based media company reported $993.3 million (or £788.9 million) of overall revenue in 2023, down 4% year over year, according to its full-year earnings announced on Thursday.

As a result, CEO Jon Steinberg unveiled a new plan to get the company back on track, by investing about $31.5 million to $37.8 million (or £25 million to £30 million) into Future over the course of the next two years.

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That said, independent agencies are so far hearing a positive outlook from some clients, depending on their sector and size or performance of a particular brand. For others, spending looks to be more reserved in a still-recovering economy next year.

“Clients are keeping macro economic conditions in mind as we head into 2024,” said Stephanie Stanczak, vp of media operations at Ocean Media. “However, it feels to be a repeat from early 2023 where clients want to plan for the year, but have contingencies in place so they can pull back on dollars if needed.”

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