The New York Times thrives off of subscription revenue and print advertising. But at SXSW, its focus has been on its show, “The Weekly,” which airs on FX and Hulu. While the Times isn’t in charge of selling the advertising, it’s an investment in growing their brand, said Sebastian Tomich, the Times’ global head of advertising. Digiday spoke with Tomich at SXSW about the success the Times has had on platforms like podcast apps and newsletters. The conversation has been lightly edited for clarity.
Why did you create “The Weekly”? Are you going after TV money, or is it something else?
I think of “The Weekly” very tactfully. It doesn’t play a role in the ad business. We’re not responsible in selling the advertising. I think it has residual effects, though, because when you have a really successful TV show, I’m not selling the inventory around it, but it has a good brand effect, and I think it exposes more people to the Times. Everyone’s instinct is “The Weekly” is the next iteration of “The Daily,” but it’s not that similar — completely different in form and in talent. But you think about “The Daily’ and the impact its had on advertising. I walk into rooms of media agencies now, rooms filled with 20 to 25 year olds, and I ask if they subscribe to the Times, and they’re like, “I see [the Times] sometimes on Instagram and Facebook,” and I ask, “Who here listens to ‘The Daily’?” and everyone raises their hand. “The Daily” is the best brand campaign we’ve ever had, exposed an entire new generation. From a financial perspective, I definitely don’t think it would be the most profitable thing we do. It’s a tough game to win.
With “The Daily,” how successful do you think podcast revenue is? Obviously, people have the ability to skip your ads.
In terms of skipping ads, people can skip through print pages [of ads] and people can skip through TV ads, and an enormous amount of digital ads are fraudulent. “The Daily” has a been a massive hit. We’re sold out [for the quarter], and I bet it will set out again. When I sold a lot of display, I don’t think I ever had a client who called me and said this is working really well I want to re-up my spend. In audio what’s been happening is it’s working really well. There’s skepticism around measurement and skipping, but the podcast mainstay advertisers are below the funnel. You’re not seeing P&G, Coke you’re seeing Casper mattress, ZipRecruiter, and I think that’s positive. They’re incredible performance driven, and they don’t have big budgets. It’s performing, and if you drill down into that why is it performing, part of that is lack of fraud. We’ve been so used to fraud that it’s baked into all of our numbers. On “The Daily,” there’s intent, and it’s disruptive. I’m a big fan of disruptive advertising because it works. The problem with digital advertising is a lot of it’s a flyby. Lastly, I think we’re hoping into the golden age of podcasting. I think it’ll be a good next few years.
Beyond “The Daily,” what about your relationship with other platforms? BuzzFeed keeps saying Twitter has been super valuable for them. Do you have a good example of a success relationship?
Well, “The Daily” is off our platform, it’s on Apple and other podcast apps. That [good relationship] will probably not hold, looking at how other platforms play out, the social video, the pivot to video, the economics were so fraught. You did have that period of a year two years and then all the sudden there were platform changes. I think we as a company are very hesitant overall about our relationship with platforms. I think in [a panel earlier] someone said no platform is alike. Facebook is a tricky one. I would imagine we’re one of the number one spenders on Facebook in terms of driving subscriptions. But in terms of the business of selling ads, there was a general sense in the industry that Facebook or Instagram could take over the entire world and either you play for them and play by the rules and you’ll be left behind. But I don’t sense that anymore. I think there’s consensus in the industry that you can’t build a business on the back of the platform. Google is a little different. Google has the same goals [as us]. But I can pretty much guarantee the company won’t do anything off platform that doesn’t come with some guaranteed in come right off the bat.
How important are newsletters to the Times, especially when it comes to revenue?
If you look at star products, where our revenue is made it’s creative services, audio and email. Newsletters play an incredibly important role for the company. I think we get more traffic from those than the site’s vertical pages. I love newsletters, but I think they suffer from advertising taboo. Newsletter, email doesn’t sound sexy. It was traditionally a value add tool for sellers. The challenge that I’m seeing is more the ad tech. It’s a little janky. There are separate ad revenues. It’s a challenge, but overall, I’m a little bullish.
How about T Brand Studio? Are you investing more in that business this year?
I’ve noticed in digital media that if you’ve moved on from talking about something a lot, it’s making a lot of money. The minute that it goes into the core business, it’s making money, and you’re not talking about it. T Brand is definitely that for us. Four to five years ago, we dominated trade headlines, and now you see every media company has one these days. In terms of role at the Times, it’s at the center of every conversation we have. It’s a media business. The team is enormous: 175 people and three offices. We acquired two others, and I wouldn’t be surprised if we added more over the next couple of years. In terms of the business, it moves really well. i think the end of result for all of this is publishers establish direct relationships with clients and not just media clients but real creative, brand marketers who understand the value and have the budgets to support it. When they all propped up the big story is we were competing with the agencies. The only way this works is if we’re direct with clients. Our vision has been to do it and we’re creeping toward it more and more.