Despite his grim predictions last year that display-ad revenues would plummet this cycle, Gawker Media head Nick Denton reports increases in the company's ad revenues and blog traffic for February 2009. In a memo to his staff posted on Poynter Online by Jim Romanesko, Denton reveals that the sites' traffic has improved by 34% over last February, ad revenues are up a fifth over last year so far, and reader comments have multiplied and improved.
Denton calls the news a "chink of light" in a somewhat gloomy media climate and attributes the Gawker Media's success to the popularity of its new big ad units and to the concentration of web traffic to fewer and larger sites. The company has cut costs by selling properties Gridskipper, Idolator, Wonkette and Consumerist last year, consolidating Gawker Media brands under Gawker.com, and laying off staff.
According to paidContent, "staying slim" might be essential to Gawker Media's performance as other smaller online publishers are also withstanding the ad sales drop relatively well. An article in the Wall Street Journal asserts that these successful publishers have employed "business models that allow them to create niche content with little financial investment." Gawker Media is a good example of this tactic as it publishes several blogs with targeted audiences - such as Gizmodo: the Gadget Guide and Jezebel: Celebrity, Sex, Fashion for Women - therefore attracting niche-specific advertisers. Gawker Media's advertising web page presents its various titles with links for each that neatly define its niche by specifying the publication's objective, audience, brands, traffic, and geographic distribution.
Whether it is due to cutbacks, consolidation, large ad units, or targeted audiences, Gawker Media seems to be doing something right. Still, Denton warns his staff that the future of the media, advertising, and the economy is unclear and that they "can't afford to be complacent. However if this success continues, trends such as niche web sites might be of interest to publishers looking for creative business models and solutions to the decline in advertising revenue.