During Q3 2024, digital media revenue growth rebounded, and volatility accelerated at a record pace. After 9 consecutive quarters of 6% or less growth, median revenue growth rose to 9% during Q3 2024. This positive breakout may indicate the start of a resurgence for digital media as it bounces back from a period of prolonged stagnation. However, despite the positive momentum, the digital media landscape remains unpredictable. Volatility has returned with reckless abandon, leading to unexpected fluctuations in performance across varying media industries and verticals. While there appears to be a general improvement in revenue performance across our index, it is worth noting that a few key out-performers may be largely responsible as they experienced staggering growth.
Tired of mainstream media focusing only on “Big AdTech”, our team began examining public revenue data for the broader digital media industry. We review the revenues of more than 30 public digital media companies and compare their performance next to “Big AdTech”. After 2+ years of poor performance, a recovery for the digital media industry may be underway. See more with the release of our Q3 2024 Digital Media Revenue Report to share our findings.
Companies Analyzed
We evaluated data from publicly traded companies, in the USA, with financial reports denominated in USD. Those companies must also earn a majority of their revenues from digital media operations and have been underwritten by OAREX’s credit team. Furthermore, we excluded some “Big AdTech” companies to ensure the data was not outweighed by industry giants (i.e. Google, Meta, and Snap).
Key Findings In The Report
- Revenue growth rebounded, breaking a record slump: After nine consecutive quarters with 6% or less revenue growth, median revenue growth was 9% in Q3. Furthermore, the number of companies with positive YoY revenue growth rose to 66% but was unchanged from Q3 2023.
- Google remained below the industry average, again: Google Network (its display business) was down 2% YoY in Q3, making it the tech company’s eighth consecutive negative growth quarter. Alternatively, Snap was up 15% and Meta was up 19%.
- Correlation between size and performance disappears: For the first time in our data set, there was almost no correlation between company size and YoY growth during Q3. Larger companies have traditionally outperformed their smaller counterparts, but those roles reversed in Q3.
- Volatility continued accelerating at record pace: After 2 years of suppressed dispersion between 18-21%, volatility jumped to 28% during Q2. As we speculated, that breakout continued, and volatility accelerated to 53% in Q3 2024–marking a 5 year high and the fastest rate of change on record. This dramatic increase was primarily due to some significant positive outliers which has not occurred in the past few years. While this means that some companies saw impressive gains, others struggled to maintain momentum, further highlighting the unpredictability in the market.
- Best Performance: MediaAlpha was up 247% and QuinStreet was up 125%. While Applovin, The Trade Desk, Viant and Zeta Global all saw YoY growth over 25%.
- Worst Performance: Perion was down 45% and Digital Turbine, IAC and Unity were down more than 15%.
Our Takeaway
Hindsight is always 20/20 but, as we speculated in our last Q2 Digital Media Revenue Report, the breakout observed in volatility was foreshadowing of the positive performance to come. Although that trend continued in Q3, and we expect more growth to carry over into Q4 performance, our outlook for 2025 remains somewhat apprehensive. While we are excited for their growth, outlier performances like we saw from MediaAlpha and QuinStreet skews the data upward. Additionally, it is noteworthy that both companies operate in the same space and some of their outperformance may stem from increased demand within performance marketing. Either way, we hope to see more of a broad and stable increase in revenue performance during Q4.
As we move into 2025, we look to the political regime shift and what impact it may have on the economy. We ultimately believe the biggest drivers of continued success will be the macro economic environment and access to liquidity. While the past two quarters have shown promise, they may simply be a reversion to the mean after a prolonged draught. Nevertheless, amid the uncertainty, our outlook remains optimistic as we await Q4 2024 data and begin the new year. For businesses also focused on maximizing scale in 2025, OAREX can help. Our flexible capital solutions and deep industry knowledge empowers companies, enabling them to exploit more opportunities, drive growth and mitigate risk. Schedule a call today to find out how OAREX can you succeed.
Want to see more? Download a copy of our free report here or schedule a call to speak with our team.
