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

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

Axios is an against-the-grain success story: a five-year-old venture capital-backed media startup that has succeeded journalistically and financially. Which is why it worked sell for more than 500 million dollars for Cox Enterprises.

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

That’s because Meta, Alphabet and other big tech companies looking to repair or improve their reputations are 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, a subscription news startup, and Semaphore, a Ben Smith and Justin Smith publication that will launch this fall.

Tech companies aren’t the only players in the so-called “corporate social responsibility” advertising market, which has been around for years. If you’ve ever watched a weekly news show like Meet the journalists, you must have seen examples. They’re often for companies you’ll never interact with in person—say, Cargill or ADM or Lockheed Martin—but they really want to interact with Congress. And they were a staple of earlier generations of print DC publications, such as the Congressional Quarterly.

But the ads, aimed at influencing people who might regulate the company that pays for the ads, have become especially important for a new breed of digital publications that have emerged in DC over the past decade, starting with Politico in 2007.

Publishers in the market say spending has increased significantly in recent years, largely suppressed by technology companies trying to cope with new scrutiny. And they say Facebook owner Meta is the biggest player in the game.

“Facebook is a huge network plus for us,” Axios CEO Jim VandeHei he told me in 2020, when explaining why his company’s advertising business was growing ahead of schedule. (VandeHei, like many publishers I spoke to, declined to speak on the record for this story, as did tech executives I spoke with.)

How much money the Meta and the rest of big tech are putting into DC publications — as well as those not just focused on Washington, including the New York Times, the Wall Street Journal, the Atlantic and even Vox Media, which owns this site — is anyone’s guess. But the publishers I spoke with think the market for corporate responsibility ads in DC pubs could be around $350 million — perhaps tenfold more than in the 1990s — with tech companies accounting for perhaps a third of that.

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

But for publishers, even a sliver of tech money is incredibly high-margin and significant. Rivals tell me that Axios, for example, charges $300,000 for a one-week ad campaign that includes multiple placements. Last year, Axios made a profit of $4 million on $87.5 million in sales, and it hopes to make more than $100 million in 2022, the company told investors.

Money is also material for small marketing agencies that have created a boutique industry that places ads on behalf of corporate clients. Bully Pulpit Interactive, for example, handles Meta’s DC-based purchases, although neither company has confirmed this on the record. The Meta also isn’t listed as one of Bully Pulpit’s clients on its home page, listing the Chan Zuckerberg Initiative, a philanthropy funded by Meta CEO Mark Zuckerberg and his wife Priscilla Chan.

If tracking the total dollars spent by techies in Washington remains unclear — by contrast lobbying coststhey are not required to file that information anywhere — the rationale for the spending is abundantly 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 for them,” says Matt Kaminski, editor-in-chief of Politico. Other active big-tech mouthpieces, publishers tell me, include Alphabet, Google’s parent company, which is currently faces multiple lawsuits from regulatorsand Amazon, which could also be found sued by the federal government before the end of the Biden administration.

Less obviously active is Microsoft, which took a crash course in the perils of Washington in the 1990s when it fought a protracted antitrust lawsuit. Since then the company he paid much more attention to policy makerswhich may help explain why it has been spared many anti-big-tech broadsides in recent years.

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

But publishers I’ve spoken to insist they’re not worried about tech money skewing their coverage. For starters, many of them barely cover technology. And they say corporate image advertisers want to advertise with them because they reach a select group of policymakers and influencers — not because they want to skew the way they report. They also note that the New York Times, which has been highly critical of big tech in its coverage since the 2016 election, has often run the campaign image of Big Tech.

It is also debated whether the dominance of technology in DC advertising will last for years or will be replaced by other prominent sectors. Some publishers think the pendulum will eventually swing the other way and you’ll see health care and Wall Street companies replace technology at the top of the ad pile.

Others argue that the technology’s sheer size and influence means it will always be a target for regulation, which means it will always want to pay to change the way important people perceive it. But whoever wants to spend will always find a bunch of publishers happy to take their money.



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