Another big sales reorganization at Condé Nast shows that legacy media is still trying to figure out a path forward as ad dollars shift from print to digital.
In this latest move, the luxe publisher behind titles like Vogue and Vanity Fair pushed further into a category-sales approach it began adopting two years ago when it replaced individual title publishers with group publishers. With this reorg, Condé Nast went from five to three divisions, led by a chief business officer who will lead ad category sales for the entire company and consumer revenue for the titles in their respective divisions.
Even Condé Nast’s most valuable title Vogue wasn’t spared. Vogue, which until now had been treated as an exception with its own publisher and sales staff, will now share Susan Plagemann as sales leader with other titles as she adds responsibility for other fashion titles like GQ and Glamour.
The Condé Nast approach, which aligns the company with the way digital media companies like Vox Media and BuzzFeed — not to mention Google and Facebook — tend to sell, is a departure from the other big legacy media companies Hearst Magazines and Meredith Corp., where the magazine titles still play a starring role in how they’re pitched to advertisers. It also shows how legacy media is still struggling to figure out how to make up for the declines in their core print magazine ad business, which Zenith predicts will shrink to 3.8 percent of global ad spending in 2020 from 5.2 percent in 2017.
The category-centric approach is a big bet by Condé Nast’s chief revenue and marketing officer Pamela Drucker Mann on the company’s ability to grab a larger share of audience-based ad spending and a piece of the TV ad pie as it launches over-the-top video channels tied to its magazine titles. In a company memo, she said the private company is on track to beat its goal, without saying what that goal is. The company also reportedly lost $120 million last year and is selling off some of its titles, so success is relative. The category approach also is a bet that the company, still best known for exclusivity and which is trying to simultaneously build a paywall business, can compete against scale players in TV and digital media.
“Everyone’s struggling with what’s the right solution to a thorny problem,” an insider said. “We still rely on print and we’re not making up all the dollars with digital gains. And we’re struggling to figure out what’s the right talent to do that.”
John Wagner, group director of published media at PHD, said the category approach has lessened the internal competition for ad dollars that Condé Nast titles were famous for.
“They’re not fighting with each other like they used to. We’re all talking to the same person, versus the disjointed process that was previously in place.” The question for an advertiser that’s not endemic to a title is whether they’ll get the same attention that a core advertiser would get, he said.
The category approach isn’t foolproof. Time Inc. got rid of publishers at its 22 magazines in 2016 in favor of selling around 11 categories including pharma and food, but ran into execution and cultural problems. Brand people still wanted to sell brands, and accounts were falling through the cracks. Meredith bought Time Inc. in 2018 and restored the publisher title; Meredith is still working to raise the Time Inc. titles to its own standards for growth and profitability.
That Meredith has dedicated people selling its brands makes sense, with one-third of all ad revenue coming from digital in its fiscal year 2018. It still has dedicated print sellers.
“Meredith has always been brand-first, and I don’t see it slipping away,” Wagner said. “The sales reps are out on the street and they’re meeting with everyone. They’re competing against Facebook, Google, Amazon, so the more boots on the ground is the best way forward.” As print’s share of ad revenue continues to decline, it’s a question of how long its brand-centric approach will make sense.
Hearst also leans brand. It has corporate teams that work on things like events, branded content and consumer revenue for big advertisers, and vertical sales teams for auto and pharma, because those are lucrative categories for Hearst. But group publishers sell their respective titles, with an emphasis on brand, whether it’s Cosmopolitan, Good Housekeeping or Esquire. That’s because most advertisers are still coming to Hearst to buy based on the brand, not audience, said Michael Clinton, president of marketing and publishing director at Hearst Magazines.
“We have a deep belief in brand,” he said. “Advertisers want the brand-to-brand connection. We continue to see share growth with major advertisers, and that’s where the proof point is.”
The title-centric approach isn’t foolproof, either. Ad buyers have complained that Hearst can be inefficient when it comes to doing print-digital deals because multiple salespeople have to be roped in. And whatever the approach, it matters who’s doing the buying. The category approach is well suited to top 50 ad spenders, but not smaller advertisers. It’s understandable that publishers would rather sell six titles than just one, but when buying branded content, you might want to talk to sellers who are expert in the magazine, which is harder to do when one person is expected to be able to sell multiple titles.
“The value they bring is not just the audience but how they talk to them,” said Chris Wexler, svp and executive director of media and analytics at Cramer-Krasselt. “If I’m doing a deep dive with Dwell, I don’t care if you know anything else. Condé Nast understanding context is something the big ad platforms can’t offer.”
Given the legacy publishers lack YouTube-like scale, there’s an argument that they should forget the idea of trying to compete with the tech giants and just focus on keeping things status quo — if only to minimize confusion in the market.
“As long as they pick a lane, I’ll work with them, but it’s not going to fundamentally change whether I work with them or not — as long as they don’t keep changing back and forth,” Wexler said.