Axios is a quirky success story. A five-year-old media startup, backed by his venture capital, he has found success both journalistically and financially. This is why he was able to sell his company to Cox Enterprises for over $500 million.
But there is something else about Axios, at least compared to most media companies. Axios owes much of its success to Meta and other big technology companies.
That’s because Meta, Alphabet, and other big tech companies looking to repair or polish their reputations are pouring their advertising dollars into Washington DC-focused Axios and other digital publishers. This group includes Politico and his Punchbowl News, a congress-focused startup. Publications that want to join this group include subscription news startup Puck and Semafor, a publication that Ben and Justin Smith are launching this fall.
Technology companies haven’t been the only ones in the so-called “corporate social responsibility” advertising market for years. If you’ve ever seen a Sunday news program like meet the press, you’ve certainly seen examples. Often for companies that never interact personally (Cargill, ADM, Lockheed Martin, etc.) but are very eager to interact with Congress. It was also a staple of previous generations of his print-based DC publications such as the Congressional Quarterly.
But the ad is meant to influence those who might regulate the companies that pay for it, starting with Politico and the new breed of digital-first that’s popped up in DC over the last decade or so. publications of particular interest. in 2007.
According to market publishers, spending has increased significantly in recent years, largely due to tech companies trying to cope with new scrutiny. And they say Facebook owner Meta is the biggest player in the game.
In 2020, Axios CEO Jim VandeHei said “Facebook is a big plus for us” when explaining why the company’s advertising business is growing faster than planned. (VandeHei, like many of the publishers I spoke with, refused to speak on the record for this article, as did tech executives I spoke to.)
How much money is Meta and other big tech companies pouring into DC publications and publications not just focused on Washington, such as The New York Times, The Wall Street Journal, The Atlantic, and even Vox Media? owns this site — it’s a matter of guessing. But the publisher I spoke to said the market for corporate responsible advertising in DC pubs is about $350 million, maybe 10 times what he was in the 1990s, and tech companies are a third of what he was. I believe that it occupies
By the standards of tech giants, the world’s biggest companies, that’s pretty much nothing. Context: In the second quarter of 2022, struggling Meta on multiple fronts generated a profit of $6.7 billion. That’s over $70 million a day.
But for publishers, even a fraction of tech money is incredibly profitable and meaningful. Competitors say Axios, for example, charges him $300,000 for his one-week ad campaign that includes multiple placements. Last year, Axios made $4 million in profit on his $87.5 million in sales, and by 2022 he hopes to generate more than $100 million, the company told investors.
The funding is also important for smaller marketing agencies that have spawned a boutique industry that advertises on behalf of corporate clients. Bully Pulpit Interactive, for example, handles Meta’s DC-based purchases, though neither company has officially confirmed. Meta also lists on its homepage the Chan Zuckerberg Initiative, a charity funded by Meta CEO Mark Zuckerberg and his wife Priscilla Chan, as one of his Bully Pulpit clients. Not posted.
If tracking the total amount tech people are spending in Washington remains vague (unlike lobbying spending, they don’t have to submit that information anywhere), the rationale for spending is very high. is clear to Scrutinized and criticized by Democrats and Republicans who line up to regulate the sector.
Politico Editor-in-Chief Matt Kaminsky said, “They’re doing more in Washington because Washington is doing more to them.” These include Google’s parent company Alphabet, which is currently facing multiple lawsuits from regulators, and Amazon, which could be sued by the federal government before the Biden administration ends.
Less aggressive is Microsoft, which fell into Washington’s crisis in the 1990s when it fought a lengthy antitrust lawsuit. Since then, the company has paid more attention to policy makers. This may help explain why it has escaped much of the anti-Big Tech broadside of the last few years.
It makes sense to ask if all that money has any bearing on the DC pub’s coverage towards Big Tech. Because, as journalist Judd Legum points out, when they send out a message en masse, it’s almost impossible to miss it.
But the publishers I’ve spoken to claim they’re not worried about technology money distorting their coverage. And corporate image advertisers want their ads to reach policymakers and influencers of their choice, not because they want to distort how they report, they say. They also note that the New York Times, which was significantly critical of Big Tech in its post-election coverage in 2016, has often campaigned for Big Tech’s image.
It’s also debatable whether technology’s dominance in DC advertising will continue for years, or whether it will be displaced by other prominent sectors. , with healthcare and Wall Street companies displacing technology at the top of the advertising industry.
Some argue that the sheer scale and influence of technology means that it will always be subject to regulation. In other words, technology will always want to pay to change the way the people who matter will perceive it. But anyone wanting to spend money will always find a bevy of publishers willing to take their money.