Axios used ad money from Facebook and other tech companies to help sell for $500 million

Axios is an upstream success story: a five-year-old, venture capital-backed media startup that found journalistic and financial success. That’s why he was able to sell for more than 500 million dollars to Cox Enterprises.

But there’s something more unusual about Axios, at least compared to most media companies: It owes much of its success to Meta and other tech giants.

That’s because Meta, Alphabet and other big tech companies looking to repair or polish their reputations have been pouring ad money into Axios and other Washington, DC-focused digital publishers. That group includes Politico and Punchbowl News, a startup that focuses on Congress. Publications that would like to be in that group include Puck, the subscription news startup, and Semafor, the publication that Ben Smith and Justin Smith will launch this fall.

Technology companies are not the only players in the so-called “corporate social responsibility” advertising market that has been around for years. If you’ve ever watched a Sunday news show like meet the press, you’ve definitely seen examples. They’re often for companies you’ll never interact with personally (think Cargill or ADM or Lockheed Martin) but want to interact with Congress. And they’ve been a staple for an earlier generation of DC print publications, like the Congressional Quarterly.

But the ads, which are meant to sway people who might regulate the company paying for the ads, have become particularly important to the new generation of digital publications that have been springing up in DC over the past decade, starting with Politico. in 2007.

Publishers in the marketplace say spending has risen sharply in recent years, fueled in large part by tech companies trying to deal with new scrutiny. And they say Facebook owner Meta is the biggest player in the game.

“Facebook is a great net advantage for us”, Axios CEO Jim Vande Hei he told me in 2020, when explaining why his company’s ad business was growing faster than anticipated. (VandeHei, like many publishers I spoke with, declined to officially discuss this story, as did tech company executives I spoke with.)

How much money is Meta and the rest of big tech pouring into DC publications, as well as those not solely focused on Washington, including the New York Times, the Wall Street Journal, the Atlantic, and even Vox Media, which owns this site, is a matter of conjecture. But publishers I’ve spoken to think the market for corporate responsibility ads in DC pubs may be around $350 million, perhaps ten times what it was in the 1990s, with tech companies accounting for perhaps a third of it’s.

By the standards of tech giants — that is, some of the world’s biggest companies — that’s next to nothing. For context: In the second quarter of 2022, Meta, which has been struggling on multiple fronts, generated $6.7 billion in profit. That’s more than $70 million a day.

But for publishers, even a slice of tech money is an incredibly high and significant margin. Rivals tell me that Axios, for example, charges $300,000 for a week-long ad campaign that includes multiple locations. Last year, Axios generated a profit of $4 million on $87.5 million in sales and expects to generate more than $100 million in 2022, the company told investors.

Money is also important for small marketing agencies that have created a boutique industry that places ads on behalf of corporate clients. Bully interactive pulpit, for example, handles Meta’s DC-based purchases, although neither company would confirm this officially. Meta is also not listed as one of Bully Pulpit’s clients on its home page, which does include the Chan Zuckerberg Initiative, the philanthropy funded by Meta CEO Mark Zuckerberg and his wife, Priscilla Chan.

If tracking the total dollars tech people are spending in Washington remains murky, unlike lobbying expensesthey are not required to file that information anywhere; The rationale for the spending is pretty clear: After the 2016 election, Big Tech was scrutinized and criticized by Democrats and Republicans, who are lining up to regulate the sector.

“They’re doing a lot more in Washington because Washington is doing a lot more to them,” says Matt Kaminski, editor-in-chief of Politico. Other active big-tech messengers, editors tell me, include Alphabet, the parent company of Google, which is currently facing multiple lawsuits from regulatorsand Amazon, which can also be found sued by the federal government before the end of the Biden administration.

Less obviously active is Microsoft, which received a crash course in the perils of Washington in the 1990s, when it faced a long-running antitrust lawsuit. Since then, the company paid much more attention to politiciansWhich may help explain why it has escaped many of the big-tech barrages of recent years.

It’s reasonable to wonder if all that money has any effect on the coverage that DC’s pubs are targeting for big tech. Because when they do a concerted messaging push, it’s hard to miss, as journalist Judd Legum has pointed out.

But the publishers I spoke to insist they’re not worried about tech money distorting their coverage. To begin with, many of them barely cover technology. And they say corporate image advertisers want to advertise with them because they’re reaching a select group of lawmakers and influencers, not because they want to skew the way they report. They also point out that the New York Times, which has been sharply critical of Big Tech in its coverage after the 2016 election, frequently runs big tech image campaigns.

There is also debate over whether DC’s ad tech dominance will continue for years or be replaced by other prominent sectors. Some publishers think the pendulum will eventually swing in a different direction and you’ll see Wall Street and health care companies displace technology to the top of the hype heap.

Others argue that the massive size and influence of technology means that it will always be a target for regulation, meaning that it will always want to pay to change the way important people perceive it. But whoever wants to spend will always find a herd of publishers willing to accept their money.

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