Google Traffic Down 70%, People Inc. Pivots to Non-Session Revenue

People Inc.'s referral traffic from Google search has fallen 70% over the past two years, including a 26% drop in Q3 alone — the steepest single-quarter decline yet — CEO Neil Vogel told investors on the company's Q3 earnings call Tuesday.

The loss contributed to People Inc. laying off 195 employees, about 6% of its staff, last week. Vogel conceded that the traffic is gone and is not coming back. AI Overview summaries now appear at the top of 90% of Google searches associated with People Inc.'s content, he said. Chairman and senior executive Barry Diller described a "critical loss of sessions" on the call.

What does this change for the publisher's revenue model? Quite a lot, and mostly on purpose.

Digital revenue still grew

Despite the traffic collapse, digital revenue rose 2% year over year in Q3 to $289 million — People Inc.'s twelfth consecutive quarter of digital growth. Total Q3 revenue fell 4% to $431 million.

Vogel credited the company with anticipating the shift. People Inc. coined the term "Google Zero," he noted, and has spent the past three years building non-session revenue and advertising products such as its D/Cipher contextual targeting tech. CFO Tim Quinn said the company should see the first major returns from these investments in 2027. Diller set the bar: he would be "very disappointed" if People Inc. did not return to double-digit growth next year.

Non-session revenue is the growth engine

Non-session revenue — everything not tied to website visits — already accounts for 43% of digital revenue and grew 15% year over year in Q3. The remaining 57%, session-based revenue, fell 6%.

The company's priorities include:

• Live events and activations
• Content licensing with news aggregators, including Apple News and Yahoo
• Licensing deals with AI companies such as OpenAI, Meta and Microsoft
• D/Cipher, extended last year to third-party sites and CTV
• More social video series

Licensing revenue grew 49% in Q3, led by aggregator and AI vendor deals. Quinn said that growth will slow in Q4 as the company laps the Meta licensing deal announced last year, which inflated the prior-year comparison.

One video bet is "The Intern," a short-form series featuring the InStyle editorial staff. Brands can sponsor a full season of seven three-minute episodes. "We weave that sponsor into the plot line in a wink, wink way that users enjoy," Vogel said. "They then have the opportunity to layer on events at InStyle, events at People, media across YouTube and Instagram and across all these other places." He called the show "very lucrative and very high margin" on its own, with the broader packaging opportunity feeling "very modern and very exciting for advertisers."

People Inc. is also extending its biggest franchises. People's "Sexiest Man Alive" — this year featuring Noah Wyle, star of "The Pitt" — now spans Instagram, TikTok, YouTube, Apple News, the People app, the VIP subscription, podcasts and distribution partners. "We grew revenue associated with SMA this year 50%," Vogel said. A Southern Living-branded sweet tea line, by contrast, has been discussed for nearly a year without launching.

Session-based ads under pressure

Advertising revenue fell 8% year over year in Q3. Vogel argued the 6% decline in session-based revenue could have been worse, given web sessions were down 26%. Quinn said higher premium ad rates on programmatic and direct-sold inventory offset the traffic losses, and the path back to growth is demonstrating strong advertiser performance.

Performance marketing revenue growth slowed from 13% in Q2 to 2% in Q3, largely because Amazon Prime Day fell in Q2 and shifted roughly 4% of growth into the earlier quarter, Quinn said.

MGM off, M&A and Google damages on

Diller said People Inc. abandoned plans to parlay its MGM Resorts stake into a bid to take the company private, though it still owns 26% of MGM stock and expects to buy more. He also rejected an MGM proposal to acquire People Inc. and said he sees no other sale proposal meeting his expectations. Pulling back should free capital for reinvestment and stock buybacks, and Diller said People Inc. will aggressively pursue M&A, though likely only small "bolt-ons to the publishing business."

Quinn added that People Inc. still hopes for a nine-figure damages payout in its ad tech antitrust lawsuit against Google, noting USA Today's Google suit is moving forward and People Inc.'s is next in line.

Management believes the worst of Google's AI search overhaul is behind it — and the company is still holding out hope that the next big check from Google arrives by court order.