Advertisers ghosted the news. Are they ever coming back?

“News has been under such assault the last few years—it’s sold at a tremendous discount from a CPM standpoint."

Photo by visuals on Unsplash

Mark Penn, the CEO of ad holding company Stagwell, is on a mission to bring skittish marketers back to the news business.

Stagwell has committed to increasing overall spending on news by 22 percent this year. “We’re trying to get every client who signs on to commit to at least three percent of their media buying [in news] in order to get them to try it,” Penn said. The company counts Starbucks, Visa, and Target among its clients and houses ad agencies such as Anomaly and 72andSunny.

Penn is pushing back hard on the brand safety business. “No grocery store [advertiser] ever said, ‘I’m not going to be in the New York Post or the New York Times with that Wednesday supplement.’ It's inconceivable. How did this come up all of a sudden, that we can’t be on a news site online?” he said at a recent WSJ panel titled, “Hard Truths, Real Results: How News Unlocks Advertising ROI.”

Back in 2020 at the height of the George Floyd protests, corporations like Target started keyword blocking news publishers, concerned that it wasn’t the best environment to sell bed sheets. Activists too dragged advertisers for putting their ad dollars on sites like Breitbart. Marketers threw up their hands and disappeared to sports to avoid the negative attention. With the check of a box, agencies instructed their automated buying systems to block news buys. Fast forward five years, and many news publishers are selling their inventory at a discount to the market to stem the declines.

Penn is focusing his efforts around conversations with chief executives and found that many didn’t even know their marketing units had demonetized the news. While CEOs check news as many as six times a day, their chief marketing officers are much more likely to be sports fanatics. “If I’m advertising milk, I may be better off in sports. But if I’m advertising information processing technology, you probably have underestimated news,” Penn added, referencing a survey that said 25 percent of respondents described themselves as news junkies, and half of those don’t follow sports or entertainment.

Marketers have long feared adjacency to controversial topics. It’s logical that airlines don’t want to advertise next to airplane crashes. “No one believes that JPMorgan is for Hamas because it appears in the middle of a story about the Israel and Hamas conflict,” Penn said. Yet many advertisers appear to have thrown the rule book out when it comes to spending in much less brand-safe venues.

Indeed, JPMorgan Chase’s chief media officer, Tracy-Ann Lim, told the same WSJ panel, “I felt the alarm last year, and that got me off my chair in this space to help. Brands might say they are risk-averse; they are spending considerable amounts of money on social media.” Lim said she is vigilant about making sure that team members don’t block the news from plans.

Forecaster Warc Media says global ad spending on news brands is projected to fall to $32.3 billion in 2025, a 33.1 percent drop from 2019. That number is expected to stay flat through 2026. “Keyword blocking hinders the ability of publishers to monetise newsworthy moments, while ad investment is increasingly shifting from professional journalism to ‘creator-journalists,’” Warc Media’s head of content Alex Brownsell said in April when the report was released.

Stagwell, which recorded $2.84 billion in 2024 revenue, is pitching advertisers on its private marketplace, where news partners share inventory to persuade advertisers to get back into the news. The company has put its money where its mouth is—sponsoring a coalition of news industry efforts called “The Future of News” in Washington and London. Stagwell also pushed the issue onto the agenda at the World Economic Forum in Davos, and most recently at the Cannes Lions International Festival of Creativity in France.

Penn isn’t alone in his efforts to move the needle. Lou Paskalis, chief strategy officer at Ad Fontes Media, partnered with ad tech firm The Trade Desk to create a “News Navigator” in January. The product, aimed at encouraging advertisers to buy high-quality news, is on track to steer an incremental $500 million in advertising to news publishers, Paskalis said. “News has been under such assault the last few years—it’s sold at a tremendous discount from a CPM standpoint.” He added, “Our message has shifted from ‘it’s your civic duty’ to ‘news performs.’”

Paskalis points out that few industries could survive the kind of drops that have hit news publishers. There’s been an 80 percent decline in ad investment on news in the fifteen years up to the 2020 pandemic, according to a slide he shared citing the News Media Alliance. “What’s left is competing against brand safety issues that have been proven false by the Stagwell study, and they’re having to sell at a tremendous discount.” Though this isn’t true for top-tier outlets like The WSJ and The New York Times, he adds.

Paskalis is armed with case studies to prove his point. A Hollywood studio and a financial services firm experimented with news in the first quarter. The financial services company saw a 39 percent lower CPM on Connected TV platforms than it had forecast. Ultimately, the test resulted in a 25 percent budget increase on news in the second quarter. A second case study saw the movie studio winning a 34 percent lower CPM in Connected TV versus overall performance, and increased its conversion rates.

Without changes, the long-term effect of advertisers staying away from news is simply less investigative reporting and more lifestyle content and a shrinking of journalism already under assault. “Let’s get back to fair consideration for the news—along with everything else,” said Penn.