The 5 Words on the Minds of Magazine Media CEOs
Once again, the top execs of the largest consumer magazine companies took the stage at the annual American Magazine Media Conference. (Here’s what they had to say last year.) There was a lot of optimism shared despite some of the obvious pains in the industry, namely, the continued elusiveness of a sustainable digital advertising model, the ongoing battle against internet Goliaths Facebook, Google, and now Amazon for marketing spend, and ongoing industry consolidation and job losses.
The conversation mostly set aside those pervasive obstacles to focus on the positive path forward. But amidst the backslapping and rose tinting, it was possible to pick out what’s really on the minds of the publishing industry elite by looking at some of the keywords that recurrently came up.
This year’s panel, moderated by MPA president and CEO Linda Thomas Brooks, featured the following leaders:
David Carey, president, Hearst Magazines
Robert Sauerberg, president and CEO, Condé Nast
Tom Harty, president and CEO, Meredith
Pam Wasserstein, CEO, New York Media
Andrew Clurman, president and CEO, Active Interest Media
Eric Zinczenko, CEO, Bonnier
Throughout the conference, many of those that took the stage pointed toward revenue diversification as a top priority for their organizations with end goal of being less dependent on the whims of advertisers to fund their core and costly product (journalism) and become more resilient to market fluctuations.
The baseline for diversifying revenue is growing subscription revenue to better balance ad dollars, but the panel also explored some of the other products publishers are finding success with by capitalizing their well-established brand equity.
Bonnier’s Zinczenko applauded Meredith’s brand licensing business, which is the second largest business of its kind next to Disney. While that business line is driven greatly by Better Homes & Gardens licensed products, Meredith’s Magnolia Journal (launched in 2017) has a revenue makeup that would make any publisher envious, with 95% of revenue coming from the consumers.
Condé Nast also has diversification in its sites, with branded content, data, and video at the top of the priority list for growth. But in order to achieve better revenue homeostasis, publishers need to get the content right, said Sauerberg. “If you get the content right, there will be a big pay day with consumers.” Sauerberg said that The New Yorker subscription revenue has seen 40% growth year-over-year – the type of revenue shift that totally alters the business model in a positive way.
Active Interest Media, perhaps the leader when it comes to creative thinking about alternative revenue streams, has gone so far as to sell horse trailer insurance to compliment it’s equestrian titles. Meanwhile, Clurman said the company is looking to expand further into education and certification programs to serve its enthusiast audience. New York Media has had success capitalizing on the Vulture brand by launching Vulture Festival. And for it’s part, Zinczenko said he would like to see Bonnier have a portfolio akin to an investment fund with 30% print, 30% digital, and 30% alternative revenue.
Audience development and consumer marketing is already heating up as a high priority for publishers of all walks in 2018. Publishers would be wise to hit the gas on that effort in order to support diversification of their portfolios before the next sizable economic hiccup shrinks marketing spend.
Advertising Safety & Transparency
Why all the focus on diversification? Because digital advertising turns out to be quite difficult if your name isn’t Google or Facebook. That said, the panelists did indicate that the objectives and expectations of advertisers and agencies are changing, and in some cases these changes could turn in publishers’ favor.
Active Interest Media’s Andrew Clurman said it seems there is sometimes a disconnect between what marketers think and feel is best for their brands at a high-level and what their marketing spend actually is. Clurman was likely referring to the type of scenario where an advertiser says brand safety is a priority but their actual ad buying is strictly guided by digital performance indicators that leave brand safety out of the equation.
During a session earlier in the day, WPP Sir Martin Sorrell founder and CEO suggested there is a dichotomous relationship in the marketing psyche between the “time spent” metrics you see in a Mary Meeker report versus metrics about engagement. “All the data points that newspapers and magazines have better engagement,” said Sorrell. “There is clear data to demonstrate that.”
How this dichotomy gets resolved -- if at all – will determine how publishers fair in the advertising game down the road.
New York Media’s Pam Wasserstein said this conflict is also reflected in the differing objectives from one advertiser to the next: some advertisers are more concerned with content and context, while others are just concerned with reaching their audience. Still, Wasserstein said 2017 was the year where transparency and brand safety in digital advertising gained awareness and many CMOs came to a realization that context plays an important role in ad spend, especially when brands are exposed to (and financially supporting) repugnant content by Nazis and terrorists.
Hearst Magazines president David Carey said the “drumbeat of concern” about social platforms and their potential for negative impact on society is a healthy conversation for society to have. Carey believes that for a long time social platforms like Facebook and Twitter were given a hall pass but are now under greater scrutiny, whether for their role in circulating disinformation or fueling political partisanship.
Carey wasn’t the first speaker of the day to make the comparison between the engineered addictiveness of social platforms and the regulation faced by the tobacco industry (WPP’s Sorrell also hinted at it). It’s an interesting poke at Silicon Valley given that many publishers including Hearst are no doubt emulating social platforms’ addictive product design. The move by publishers to embrace personalized content recommendations is directly from the playbook of social platforms’ long-personalized newsfeeds.
Consumer-versus-advertiser revenue is one type of balancing acts execs have on their mind. They’re also trying to balance the positive and negative implications of being “legacy” publishing brands. For quite some time many publishers have felt compelled to distance themselves from the fact they’ve been around for many years, concerned they’d be branded as dinosaurs and digitally illiterate. (David Carrey, to his credit, has been decidedly proud to be a “magazine publisher.”) The consensus among the panel seemed to be that finding a way to capitalize on the positive attributes of being a “legacy” or traditional publisher without letting it impede your momentum forward was the key.
“You have to fight for your cultural relevance always,” said Wasserstein, as publishers are tasked with competing with other publishers, the Golden Age of TV, and social media. Wasserstein said New York Media isn’t resting on its legacy, though it’s able to leverage that legacy in ways that bring the brand gravitas. The brand is currently celebrating its 50th anniversary and can use the POV to enhance what it does today.
David Carrey poetically added: “Our job is to mix the history with the modernity.”