As internet giants Google and Facebook gobble up advertising revenue, digital media outlets which rely exclusively on internet ads are now facing the heat. For example, BuzzFeed has given up on going public for now and Mashable is looking for an emergency buyer
Is winter coming?
Less than two years ago, the blog-turned-news site Mashable was valued at $250 million, with Time Warner among its investors. Now its value has plummeted by 80 per cent, and it’s reportedly about to be sold to the publishing company Ziff Davis, according to AFP
Meanwhile, revenues fell short of expectations at BuzzFeed—built on a combination of pop culture and social networks. This means it is no longer expected to go public next year. The website has just announced it is letting go of around 100 of its 1,700 employees. “Experts say success lies in building an audience around a specialised subject and consequently attracting advertisers—as seen with Politico, Eater and technology site The Verge,” according to AFP
63% of online advertising revenue snapped up by Google and Facebook, according to market researcher eMarketer. Next year, they are projected to rake in a 67 per cent share
Ad blockers kill revenue
And then there’s the problem of ad blockers. More than 28 per cent of US internet users have installed ad blockers, according to a report in Columbia Journalism Review. Google itself has been hit by ad blockers and has to pay to get its ads through AdBlock Plus, the most popular blocker