Time Inc. on Thursday reported its best quarter in two years: It grew revenue 1%.
For a Facebook or Google, those results would be alarmingly bad, but for a traditional media company trying to grow digital revenue as its large print and subscription businesses decline slowly year after year – well, that isn’t so bad.
Digital advertising revenue – 13% of overall revenue – increased 23% from $73 million to $90 million. Meanwhile, a small 4% (or $10 million) dip in print advertising nearly negated that growth. Print now totals $270 million.
Acquiring Viant in February propped up digital advertising’s Q1 growth. The completed acquisition is Time Inc.’s bet to take on the two digital advertising behemoths by developing a deterministic, cross-device data set of its own.
“Facebook and Google are gaining 80% of the dollars going into mobile advertising,” CEO Joe Ripp said. “This gives Time Inc. an ability to play in this space.”
After originally saying Viant would add about $100 million in 2016 revenue, Time Inc. revised that upward, saying it would contribute “well in excess” of $100 million.
Time Inc. is adding in Viant’s capabilities quickly. It has enabled its people-based platform across all Time Inc. properties, and marketers can buy using people-based data both on and off Time Inc.’s properties. And they can use that data to measure effectiveness of their advertising.
Time Inc. has the scale marketers want: Combined, Time Inc. and Viant have an unduplicated reach of 226 million, according to comScore data, with the majority of that coming from Time Inc.
“Marketers want platforms to have large scale first-party data, but what’s not out there is premium content,” said Viant COO Chris Vanderhook. “That’s what marketers want to combine it with.”
Ripp offered anecdotal evidence that marketers were hungry for this combination, and eager to see Time Inc. deploy data to complement its content business. “I was with the CEO of one our largest advertisers. He is very interested in data and targeting and incredibly excited about platform,” he told investors.
Time Inc’s M&A strategy overall is shifting to digital. The publisher has made a number of digital acquisitions besides Viant in the past year, including media brands HelloGiggles and xoJane. Part of the reason is that valuations have finally started to come back to earth, Ripp stated.
But some other digital media businesses out there may be more overblown than a live-streaming watermelon. “The reality is our native business is bigger than BuzzFeed’s right now,” Ripp said.
