Alexander 'Solly' Solomou, chief executive of LBG Media, the digital publisher behind LadBible, has described the sharp drop-off in traffic after Meta's algorithm changes as a 'tough pill to swallow.' The change, which prioritises creator content over publisher posts on Facebook and Instagram, sent LBG's shares plunging as much as 40% in a single day after a second profit warning in two months.
Impact of Meta's Algorithm Shift
LBG Media's indirect revenues—advertising from its websites including SportBible and Betches, and social media revenue share agreements—fell 41% following the change. Solomou, who co-founded LadBible in 2012 with Arian Kalantari, noted that this is 'definitely the biggest shift I've seen in any market.' The company, once valued at over £400 million after its 2021 stock market listing, now has a market capitalisation of just £68 million, with shares below the float price.
Industry-Wide Challenges
Digital publishers are also grappling with Google's AI Overviews, which provide information summaries that reduce the need for users to click through to websites. Future, publisher of brands including Marie Claire and Techradar, saw its shares lose a third of their value after reporting a more pronounced than anticipated decline in Google traffic. Future's market capitalisation has fallen over 90% from a peak of £4.7 billion in 2021 to £260 million. Investec analyst Alastair Reid described Future as facing a 'maelstrom of headwinds,' including AI and a change in chief executive.
Publishers' Response: Diversification and Direct Revenues
In response, Future launched Future+, a membership scheme across seven brands that has attracted 200,000 members. LBG Media has reduced its reliance on indirect revenues from 55% to 28% of total revenues in a year, partly due to the traffic decline, while direct revenues—from working directly with brands and owning intellectual property like the YouTube series Snack Wars—have doubled and now account for 72% of the business. The company expects underlying profits of between £15 million and £20 million this year.
Broader Implications for Online Journalism
According to the Reuters Institute, publishers expect traffic from search engines to decline by over 40% in the next three years, following a 43% fall from Facebook and a 46% decline from X over the last three years. The Daily Mail reported that AI Overviews have reduced click-through traffic to some content genres by up to 89%. The Competition and Markets Authority recently stated that online publishers can block their content from being used in AI Overviews without affecting wider search deals, potentially strengthening their negotiating position with Google.
LadBible's Evolution and Future Outlook
LadBible, which started as a Facebook page targeting the lads' mag demographic, now reaches 500 million people globally. Solomou, who moved to New York earlier this year to capitalise on the US ad market, remains optimistic: 'Even in a challenging year for us, we are profitable. The business has evolved over time, and in terms of what we are building, it is a long-term play. We are going to be here for many, many years.'
