Digital publisher Vox Media is expected to miss its revenue goal for this year by more than 15%, according to people familiar with the matter, adding to the list of new-media companies struggling to live up to lofty growth expectations.
The company, which owns websites including Vox, The Verge and SB Nation, had been targeting revenue of about $200 million in 2018, which would have translated into about 25% growth over last year’s haul of roughly $160 million, the people said. Instead, the company will be struggling to achieve double-digit percentage revenue growth, the people said.
The expected miss was discussed last week at a Vox Media board meeting, as some investors grow concerned about the situation, one of the people said.
A spokeswoman for Vox Media said it is too early to make predictions about 2018’s final revenue because the fourth quarter is traditionally the largest, by far, for the company and the digital media industry. The spokeswoman said Vox Media is having a strong third quarter and expects to finish the year within its forecasting range, with double-digit percentage revenue growth.
A person close to the company said that $200 million is a “stretch” sales goal, at the high end of the range.
The expected Vox Media shortfall is another sign that the digital media industry is struggling to adapt to the reality that online ad growth is becoming harder to come by, especially as tech firms such as
corner the market. Last year, BuzzFeed and Vice Media, two of the largest digital media firms by revenue, missed their revenue targets substantially.
The growth posted by venture-backed digital media companies would still be the envy of most of their peers in traditional media, whose mature businesses have grown at a slower pace in recent years. But the new-media companies are under pressure to live up to the high expectations of venture and strategic investors, who not long ago believed companies in the sector could easily grow faster than 25% annually.
Vox Media, which has raised more than $300 million in venture capital, now has nearly 1,000 employees. Its last major investment round, a $200 million infusion from
NBCUniversal in 2015, valued the company at about $1 billion.
One concern for Vox Media, much like other digital media firms, is that revenue from sponsored content isn’t growing as fast as it once did, the people familiar with the matter said.
Vox Media, which relies on advertising as its primary source of revenue, has sought to diversify its business over the last year. The company has expanded its cross-company advertising network, Concert, launched a podcast business, cut licensing deals with video companies such as Netflix and PBS and has begun selling publishers its proprietary content management system, Chorus.
Vox Media’s peers have taken similar steps. BuzzFeed, for example, recently launched a product review site to capitalize on affiliate revenue sales, and its news division has begun asking readers to chip in with donations.
In August, Vox Media announced internally a reorganization of its advertising sales workforce, creating one team to handle major categories and accounts and another to focus on cultivating new business. In April, the company promoted Chief Marketing Officer Lindsay Nelson to become its chief commercial officer in charge of leading revenue growth efforts.
Despite the tough digital advertising market, Vox Media’s audience is growing. The company drew 78.4 million readers in July, according to comScore, an 8% increase over the previous year. Digital audiences for the New York Times, the Washington Post and BuzzFeed were all down in July compared with the previous year.
—James Oberman contributed to this article.
Write to Amol Sharma at firstname.lastname@example.org