New-Media Powers Say They'll Be Profitable Soon. Don't Ask About That Facebook Plan
New media titans have shown they can attract investors' money, raking in millions in venture capital funding, but they have not answered clearly whether they can show a profit.
At South by Southwest, marketing chiefs for three heavily-funded digital publishers said they can do that too, or can soon, anyway.
Asked whether Refinery29 was profitable, its exec VP-marketing and strategy, Patrick Yee, said yes: "On a scale of not at all to very, I would say 'quite.'"
The fashion site, which was founded in 2005 and has raised $30 milion from investors, has not dipped into the red in any year, Mr. Yee added.
Mr. Yee appeared with the marketing leaders for Vox Media and Mashable on a Sunday morning panel focused on "Booming Media Brands." Each extolled their editorial growth and revenue strategies, which continue to emphasize native advertising and video as well as newer products. And they addressed, albeit hesitantly, some of the pratfalls of digital publishing as it collides with platforms like Facebook and Snapchat.
The panel, moderated by Ad Age media reporter Michael Sebastian, delved into the profitability question early.
Jonathan Hunt, VP at Vox Media, which has raised $110 million, said the company broke even in 2014 and will be profitable this year. Stacy Martinet, CMO of Mashable, said her company is on a similar path.
The executives also contested the idea that video content is growing too saturated. Vox Media, which recently opened a video studio in Los Angeles, is seeing audience and advertorial demand for video that outstrips supply, Mr. Hunt said.
On native advertising, where every publication on the stage has increased its in-house services for marketers, the traditionally sacrosanct line between editorial and sales is becoming malleable, the panelists said. Ms. Martinet gave an example of a native ad placed by Qualcomm, the tech equipment manufacturer. For that type of paid ad, Mashable would assign its editorial team. "Our tech editor is going to write that," she said. "He's the expert."
But readers, not brands, still drive the publications' strategy for editorial and ad content, the panelists insisted. "Everything is really focused on what our audience wants to see first, rather than something that's tailored for an RFP," said Mr. Hunt.
At the same time, the publications' services for marketers are making a dent in work going to PR, creative agencies and media shops, they said.
On the intersection of platforms and new media, the panelists were far less candid. When talk turned to Facebook's push for media companies to publish directly on its site rather than link back to their own, in exchange for a share of ad revenue, Mr. Sebastian asked whether any of the publishers have been talking to Facebook about that.
None of the panelists replied, eliciting awkward laughter from the audience.
"I'm going to take that as a 'yes,'" Mr. Sebastian said. The panelists remained silent.