David Carey Echoes William Randolph Hearst in New Year's Note to Staff
In an annual New Year's note to his staff Hearst president David Carey looks back on the company's history and how its philosophy to take big risks on new and innovative ideas still informs its strategy today. Borrowing the phrase "alarmingly enterprising" from Hearst founder William Randolph Hearst, Carey describes the ventures that have paid off for the publisher in 2014. Highlights include new print launches -- Dr. Oz The Good Life, Trending NY, and the relaunched Town & Country Travel -- and a revitalized digital strategy which has doubled U.S. monthly unique visitors to 112 million and increased Hearst's social media followers by 90% to 63 million.
You can read Carey's complete letter below.
In a few hours, I will head to Times Square, where the Cosmopolitan U.S. team has taken over the "Crossroads of the World" to kick off its 50th anniversary as the famous ball drops at midnight. I'm thrilled that Hearst will be at the center of this celebration, with millions of people surrounded by Cosmopolitan branding.
Looking back, 2014 was a real roller coaster of a year for the media business. Here at Hearst Magazines, we experienced a mix of both growth and turbulence. Thankfully, the unique Hearst culture -- innovative, collaborative and open to rethinking long-standing practices as the industry evolves -- proved critical to our success, as we posted the best performance in the industry. You should be very proud of your role in this accomplishment.
The story of Cosmopolitan offers many lessons. In 1962, Helen Gurley Brown wrote Sex and the Single Girl and her message of empowerment became a rallying cry for tens of millions of young women. Helen soon came to Hearst to pitch a new magazine she called Femme, but instead she was offered the opportunity to transform Cosmopolitan, then a sleepy women's magazine, to fit her vision. The rest is history: From the first issue it was a sensation, striking a chord with American women, and its success helped fuel Hearst Corporation's subsequent growth.
Hearst executives at the time recognized that Helen's concept could serve as the foundation for a monthly magazine and a brand in its own right. The company took huge risks: giving a first-time editor a long-established business to transform, and then quickly exporting her winning concept around the world. Today, there are 61 editions of Cosmopolitan in 32 languages and 79 countries.
That philosophy -- identifying ideas with big potential, taking calculated risks (where failure is a real possibility), and thinking of our global businesses as interconnected -- continues to inform our strategies for growing our company today.
Over the holidays, I had the chance to reread David Nasaw's The Chief, a book about our founder, William Randolph Hearst. Early in our history, Mr. Hearst put forth a clear mission for success: to always be "alarmingly enterprising," words that have never been more relevant than they are today.
We certainly took his mission to heart in 2014, and we will continue to do so in the year to come. As we count down to the New Year, I've put together a list of my favorite "alarmingly enterprising" moments of 2014:
- NEW PRINT LAUNCHES: In the U.S., we successfully rolled out Dr. Oz THE GOOD LIFE, piloted TrendingNY, a free-to-the-reader fashion, beauty and pop-culture magazine for millennial women, and reintroduced Town & Country Travel. Our goal is to launch another new title in early 2016, and we're in conversations now with possible joint venture partners. We also reinforced our established brands' marquee status and strength around the world, introducing Town & Country U.K., Harper's BAZAAR in Serbia and the Netherlands (where it was named "Launch of the Year"), and Esquire in Poland. We'll soon introduce Harper's BAZAAR in Chile and Town & Country in Malaysia.
- EDITORIAL INNOVATIONS: Our editorial teams' exceptional creativity led to exciting new experiments in print and digital. Dynamic covers, bold redesigns and new formats were all rolled out, with the knowledge that we must constantly refresh our editorial products. Food Network Magazine and HGTV Magazine developed their first "crossover" content and a joint cover execution. Good Housekeeping introduced a vibrant new look and enjoyed strong financial performance. Our best content initiatives were brilliantly presented to a standing-room-only crowd of top marketers at our second "MagFront," in October. In 2015, many of our existing titles in the U.S. will celebrate important milestones: In addition to Cosmopolitan turning 50, ELLE will mark its 30th anniversary, Car and Driver its 60th and O, The Oprah Magazine its 15th, with each planning special surprises for their readers. And in April 2015, we will introduce the Hearst Editorial Excellence Awards -- stay tuned for more details.
- ADVERTISING TRIUMPHS: While some print businesses faced sector challenges, many outpaced the industry. Our U.S. fashion media brands -- ELLE, Harper's BAZAAR and Marie Claire -- beat their own best performances once again, gaining market share and influence in this important category. It was especially rewarding to see Adweek name Harper's BAZAAR the "Hottest Magazine of the Year." ELLE DECOR, marking its 25th anniversary, produced record profits, Town & Country, at 168 years young, had remarkable revenue growth, as it did in 2013, and two-year-old HGTV Magazine's revenues increased 24 percent. I'm looking forward to our pioneering "native-in-print" advertising programs, to debut in 2015.
- A SOARING IMPLEMENTATION OF OUR 'MONTHS-TO-MOMENTS' DIGITAL STRATEGY: We are in year two of our ambitious reset of our digital operations, with impressive results. We are currently restaging all of our owned and operated sites in the U.S. and around the world on the RAMS publishing suite, which is leading to an improved user experience and vastly increased content creation. This effort, combined with ongoing investment in our editorial teams and our centralized U.S. news operation, has driven impressive audience growth. In the U.S., monthly unique visitors have doubled, to 112 million, and social media followers have increased 90 percent, to 63 million, as audiences engage with us on every platform imaginable. And Jumpstart, our automotive-focused digital marketing company that connects advertisers to a 17-million-strong audience of car shoppers and influencers, turned in a terrific performance, by far the best in its history. I'm pleased to report that our digital businesses are now a vital contributor to our earnings.
- CONNECTING GLOBALLY: This year, we expanded our international digital teams and advanced the way local sites in each country produce and share content, resulting in significant audience growth. We now operate a 24/7 English-language newsroom for the Cosmopolitan network, feeding content from the U.S., U.K. and Australia to our Cosmo sites worldwide. We extended our reach, launching new sites from the U.K. to China and everywhere in between. In Russia, our 16-city digital classified business grew revenue 53 percent. And I'm especially excited about the digital-only debut of Cosmopolitan in Nigeria, a fast-growing market with high smartphone penetration, the first of several planned "Digital First" launches.
- HARNESSING DATA: Our investments in our data businesses paid off in 2014. Core Audience, our programmatic sales platform, allows marketers to efficiently reach across all Hearst units, uniting television, newspaper and magazine digital audiences. Billions of impressions were delivered through Core Audience in its first full year and we expect this number to grow dramatically in 2015.
- NEW BRAND EXPRESSIONS: Our brands are exploring new ways of reaching audiences in the U.S. and abroad. I'm especially impressed by the reinvention of Good Housekeeping in the U.K., with an ambitious paid digital product and a new stand-alone Good Housekeeping Institute -- complete with its own cooking school -- located on a busy street in London.
- REDEFINING SUBSCRIPTION MODELS: We have always known that our most devoted readers feel a strong connection to our brands. Consumer marketing and the editorial team at O, The Oprah Magazine created our first-ever premium subscriber program, "O's Circle of Friends." It's been gratifying to see the response: With minimal marketing this fall, the program is approaching 10,000 members, the majority of whom joined at the $199-per-year level. We plan to test two new membership initiatives in 2015.
- GROWING B2B UNITS: Our three business-to-business services units produced very good results, and helped counterbalance the volatility of the media businesses. CDS Global, with its industry-leading suite of products, welcomed an impressive list of new clients across many industries, from publishing to nonprofit to education, managing $7 billion of consumer payments. iCrossing, recognized by Gartner as a "Leader" among global digital marketing agencies, produced outstanding work for clients including LG, PetSmart, UNIQLO, Microsoft and Charles Schwab. In September, we acquired 80 percent of KUBRA, a print and digital provider of billing and payment solutions to large industries, including utilities, insurance and government, that processes over 400 million customer interactions on behalf of its clients every year. KUBRA shares Hearst's core values and was recently named one of the "10 Most Admired Corporate Cultures" in Canada.
People ask me all the time, "Where will the company be in five years?" Here's the simple answer: Hearst Magazines business units will be everywhere. Our digital businesses will be substantially larger, fueled by the new global "media OS" our teams are implementing. We hope to enlarge our print portfolio, through new joint ventures, spinoffs from existing titles and strategic acquisitions. Our brands will be brought to life via large-scale live events and on the small-scale screens that we'll all soon be wearing on our wrists. And I expect our B2B services businesses to greatly expand, as they invest in technology solutions that enable their blue-chip clients to succeed.
I don't expect current disruption of the broader media industry to calm down -- this really is the new normal. Fortunately, the talent and flexibility of our teams, combined with the financial strength and growth orientation of Hearst Corporation, provides us with a major competitive advantage.
If our founder could see all that was achieved this year, I'm sure he would feel the same way I do: that we have been, and will continue to be, "alarmingly enterprising" in all that we do.
I wish you and those closest to you the happiest of New Years. I know I could not do my job without the patience of my family, who will soon join me in Times Square. And we know that Hearst Magazines would not succeed without the love and support of the families and friends who stand side by side with our 12,000 colleagues all over the world. As we ring in 2015, I want to toast you and thank you -- and them -- for all we accomplished in 2014 and all that's to come.