Q&A With Hearst Magazines Digital Media CTO Michael Dugan on a Commerce-Focused Future

Like most companies, Hearst Magazines Digital Media is ever in search of sustainable revenue streams. One area it’s eyeing as ripe for growth is in ecommerce. With a host of enthusiast and lifestyle brands -- bolstered by the recent Rodale acquisition -- the company is well aware that its content inspires many buying decisions. Making a direct connection between inspiration and transaction can be profitable and improve user experience if done well.

Through a combination of content strategy shifts and supporting technology systems, in the past 18 months the company has laid a strong foundation for its ecommerce-focused efforts. And so far it’s working out well, says Michael Dugan, CTO of Hearst Magazines Digital Media. “This is a fast-growing category for us with revenue increasing 120% in 2018 over the same period last year.”

Not surprising, data is at the center of this strategy. The content readers interact with and when reveals a lot of information about their interests and buying intentions. Or as Dugan puts it, “The media industry has massive amounts of consumer preference data.”

In a Publishing Executive interview last year, Adam Harris, Hearst Digital Media’s VP of data products, shared the central role data insights are playing in product development. And just this week DigiDay reported the launch of the 20-person Hearst Data Studio, where a team of research, data, and programmatic specialists will work to give advertisers better insight into how Hearst’s audience responds to ads so the company can sell advertisers more directly on audience interest instead of placement.

In this conversation, Dugan shares some of the big picture trends Hearst is keeping an eye on, as well as how he sees technology like machine learning and business intelligence keeping the company innovating around user and advertiser experience.

Michael Dugan is conference co-chair of the FUSE Media tech summit this October and will be leading a session titled How Hearst Is Taking Ecommerce to the Next Level.

As CTO of Hearst Magazines Digital Media, what is your main focus?

I manage all aspects of HMDM’s product and technology organization around the world. My main focus is developing new features, platforms, and systems that leverage our understanding of our content, our growing knowledge of our audience, and our aggressive commerce strategy to create unique value for both readers and advertisers.

What are the high-level industry trends you’re keeping a close eye on these days?

There are a few trends that we are laser-focused on right now. GDPR (General Data Protection Regulation) is one of the largest issues facing the industry and we have been preparing for that with enforcement coming soon.

We are also seeing an increase in the deployment of “smartwalls.” This is something we are paying close attention to as we continue to find new ways to diversify our revenue streams across the organization.

Building equity around brand safety in light of current events is also an ongoing area of focus for us. When advertisers work with Hearst, they are working with a trusted company that has created and published premium, quality content for many years. Now more than ever, we want to be sure we are delivering on that for our advertising partners and our readers.

What are your biggest priorities as a business in the next 12 months?

Over the next 12 months, we will further evolve our robust content and commerce strategy, which is designed to inform consumers about specific product offerings. This is a fast-growing category for us with revenue increasing 120% in 2018 over the same period last year.

Leveraging our first-party data to build better product and ad offerings is also of increasing importance. Marketers today want great content, strong performance, and more accountability, and the connection between inspiration and action is key to achieving real results.

We will continue to create wider distribution channels as more of our content is consumed off-platform.

And finally, with Hearst Magazines’ acquisition of Rodale in 2017, we are actively building out our digital enthusiast offerings around health and active living, running, and bicycling.

One of your priorities in the last 18 months has been integrating ecommerce into your content to grow revenue. How have you done this so far?

We’ve had a lot of success in this space, starting with the launch of Best Products in 2016. The site has served as a valuable resource for the entire organization as we learn the ins and outs of affiliate commerce.

Our growth in the space has also been made possible by MediaOS, our proprietary unified content management, ad sales and data analytics platform. We can take our understanding of search, content, and data from our consumer and serve as the storefront for our audience.

Where do you plan to take this next?

We’re focused on action and creating experiences for our advertising partners that inspire consumers to take action and ultimately move further down the purchasing funnel. We are also doing a number of things to improve the commercial impact of content and track the results of a campaign. Across our portfolio, we’ve integrated the ability to embed SKU (stock-keeping unit) level products, real-time pricing and availability data into content.

What types of technologies do you see creating the biggest growth opportunities for publishers?

New technologies are developing at such a fast pace, many of which offer not only performance, security, and cost benefits, but also help with retention, hiring new talent, and the velocity of your engineering teams. We are constantly scrutinizing our technology stack and evolving as needed.

Looking to optimize our front-end development, the engineering team recently ran a PoC competition between JavaScript frameworks. React is now being deployed platform-wide, replacing a mix of other libraries and frameworks. Container orchestration is a critical function of any microservices architecture, and our DevOps team just completed an upgrade to Kubernetes. The path to true continuous integration (CI) is paved with automated testing, so our QA team is targeting complete coverage by year end.

How do you see machine learning changing the media industry in the next two or three years?

The media industry has massive amounts of consumer preference data.  We are leveraging this insight to inform what features we bring to our reader experiences.

We are also looking into machine learning to derive business intelligence beyond standard data analytics. With machine learning, there is a huge opportunity to identify non-obvious trends that help quantify the lifetime value of our digital consumers, which is really exciting.