LBG Media tumbles 22.9% as Facebook algorithm changes hit ad revenue

LBG Media PLC shares fell 22.9% to 27p after the Ladbible owner cut its full-year forecasts, blaming persistent weakness in Facebook-linked ad revenue.

"Our indirect business was hit harder than expected," Chief Executive Officer Solly Solomou said.

The social media publisher reported H1 revenue of £52.4 million, up 19% from a year earlier, driven by a 95% jump in direct advertising sales to £37.6 million. US direct revenue rose 154% to £16.1 million, pushing direct sales to 72% of group revenue from 44% a year ago. Indirect revenue, which includes social media revenue-sharing and owned websites, fell 41% to £14.5 million. Adjusted EBITDA dropped 34% to £8 million, while pretax profit slumped 79% to £1.8 million.

The company now expects full-year revenue of £100 million to £107 million and adjusted EBITDA of £15 million to £20 million. The guidance cut follows changes to Meta's Facebook algorithm and lower search traffic as users shift to AI-generated search summaries.

LBG Media had upgraded revenue guidance as recently as April, making the reversal particularly sharp. The company's strategy has focused on building direct relationships with advertisers to reduce dependence on third-party platforms, with direct sales now accounting for almost three-quarters of total revenue.

Digital media peers have faced similar headwinds as platform algorithm changes disrupted traffic patterns. BuzzFeed and other social media-native publishers have also grappled with declining referral traffic from Facebook and Google, highlighting the structural risk of relying on third-party platforms for audience reach.

The decline puts LBG Media shares at their lowest level since the company's IPO, testing investor confidence in its pivot to direct advertising. The company's next catalyst will be its full-year results, expected in early 2027.

This article is for informational purposes only and does not constitute investment advice.