Media Briefing: Why Leaf Group spun off its media arm into a standalone company
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This week’s Media Briefing takes a behind-the-scenes look at Graham Holdings’ decision to dissolve Leaf Group and form the new media company World of Good Brands. The newly appointed CEO Lindsey Abramo chats with Digiday about her plans to invest in experiential and embrace niche vs. scale.
- Letting go of Leaf Group
- The Wall Street Journal braces for layoffs, the Insider Union preps for a strike and more
Letting go of Leaf Group
Graham Holdings, owner of Leaf Group, Slate and several local news outlets, said this week that it was dissolving Leaf Group and would be rebuilding another media company, called World of Good Brands, for its media portfolio.
Leaf Group held a unique position within the larger Graham Holdings portfolio. Acquired by Graham Holdings in 2021 for $323 million, Leaf previously operated as a holding company within the larger holding company, said Lindsey Abramo, who joined as the Leaf’s CRO in October. Its portfolio included a mix of digital media brands (Hunker, Well+Good, Livestrong and OnlyInYourState) as well as online art marketplaces (Society6 and Saatchi Art) and a traveling in-person art fair, The Other Art Fair.
In April, the CEO of Leaf Group, Sean Moriarty, stepped down from his role after nine years due to pressure from “financial headwinds,” as Adweek reported at the time.
Lindsey Abramo, who joined Leaf Group less than a year ago, was named chief executive officer of the World of Good company, which will house the four digital media brands previously in the Leaf Group portfolio, as well as an expanded experiential business called House of Good, which was born out of the Hunker House franchise. Together, these brands make eight-figures in revenue annually, according to a company spokesperson. Abramo declined to comment about whether the company is profitable at this time, but said there was “a very strong plan in place for success.”
While Saatchi, Society6 and The Other Art Fair have become their own standalone companies within Graham Holdings, Abramo shared more about why World of Good was formed with Digiday, her ongoing plans for establishing the new, niche media company and how the new organizational structure impacts the day to day operations.
Below are highlights from the conversation, which have been edited for length and clarity.
What is the new revenue structure of the company, now that the marketplaces are no longer a part of the revenue mix?
Not much has changed … from a brand partnerships advertising standpoint. I still feel very bullish on experiential, I still feel really bullish, maybe more now, on direct [advertising] given what’s happening in the industry and the external factors that all of us are facing from a traffic perspective. So I still think that direct, which encompasses experiential, is going to be a big play for us this year, and likely next year, with a slow down of programmatic. Another area that we’ve had some initial success in is commerce and that’s an area that we really want to grow in some more meaningful ways next year.
Then we’re also going to reimagine [House of Good] to have even a broader aperture of uses. So thinking about how do you get even a different type of advertiser in, like the DTC, lower funnel brands, to do some sort of lower touch, turnkey opportunities.
How much of the decision to introduce World of Good Brands came from wanting to insulate the non-media side of Leaf Group from the headwinds facing the media industry?
I don’t think it applies apples to apples because we’re a really unique company. [Leaf Group was] not a media company. We’re a diversified internet company [that] had not like-minded businesses all put together. So I think the idea of Graham separating [those businesses] is really just to follow the model of the rest of their businesses, [which] they’ve had tremendous success in [doing]. We, as a brand partnerships team, will continue to represent all brand partnerships on our sister brands, so nothing changes there for our advertisers or for the market.
However, I do think that following that model does inherently give each business autonomy to really prioritize what that business’s needs and priorities are, versus looking at it through this overarching holding company, and decisions being made that way. [We can] move even more agilely and nimbly when [we’re] just thinking about a media business, or just thinking about a marketplace business… so, for us, it better sets us up to make really specific decisions on our business.
What does the partnership arrangement look like between World of Good and its sister brands? Will World of Good receive financial benefits from orchestrating those deals?
Ostensibly outside the advertising community, nothing changes. So everything we were able to pitch and position for brand partners across Society6, Saatchi Art and The Other Art Fair continues. And, and I still believe really wholeheartedly in this move towards experiential, so The Other Art Fair is continuing to get a ton of momentum and we’ve had some of our strongest fairs to date already this year. And the brand partnerships pipeline continues to be really strong.
The brand partnerships [team is housed within World of Good], but we have exclusive partnership selling rights to our three sister brands: Society6, Saatchi Art and The Other Art Fair. [It’s an] exactly similar [selling] model to how we used to work [with our sister brands]. Because we were a holding company, we had all separate businesses in our own sort of groups rolling up to a holding company… We already had a financial agreement in place, so nothing changes there.
How are you thinking about M&A now that you have a company with four media brands in very distinct niches?
It’s something we’ve talked about with Graham for a while. Given this disruption and quick pivot to being our own company, I think we need to focus [on] getting the company in a really good place. The reason why we also thought about the name so intentionally [is to understand] what would ultimately fit within the portfolio, as the portfolio would naturally grow over the next few years. But I think the near term is really [focused on] getting this new company in a really strong position with the four brands we have [and] with experiential assets that we have.
I think about M&A a little bit differently than [how] I thought about it even six months ago. And I think it doesn’t necessarily have to be in the media space with brands that we know today, it could be through tech, it could be through service, to help further along the categories we already have strong authority in.
In the last couple years, everyone was trading on scale, and it was all about this consolidation to get larger and larger and larger. When I came [to Leaf Group], I wanted to get back to the niche audience, the niche authority, the niche editorial expertise, because I’m such a brand believer. If you build unbelievable brands with really engaged audiences, that can withstand a really long test of time. From an M&A perspective, we would do it to build really credible news voices in these expert, passion-driven arenas. Not to get to a massive scale play.
What we’ve heard
“I haven’t gotten a brand deal directly from BuzzFeed, but I do know that their team is pitching me for the brand deals.”— Content creator Tue Nguyen on the latest episode of the Digiday Podcast, discussing her role within the BuzzFeed Creator Network.
Numbers to know
49%: The portion of 101 news publishers who said their newsrooms are already using generative AI tech like ChatGPT, according to a survey by WAN-IFRA and Schickler Consulting.
6: The number of staffers Cheddar News laid off last month, all of whom worked on the brand’s YouTube team.
78%: The amount of publisher professionals from large media companies (that made $50 million or more in revenue last year) who said their businesses are actively preparing for the end of the third-party cookie. Meanwhile, only 56% of publisher pros from small- to mid-sized publications (making under $50 million annually) said the same, per a new Digiday+ Research survey of 68 respondents.
What we’ve covered
With advertising in flux, Twitter is outsourcing ad monetization to ad tech:
- Twitter’s beleaguered ads business is on a bit of a roll these days.
- Since May 13, Twitter has been selling ad inventory through the mobile advertising marketplace Inmobi.
Learn more about the updates to Twitter’s ad business here.
Dentsu’s latest ad report shows slowed growth, driven mostly by inflation:
- The good news in the ad marketplace, for the moment, is that growth is still expected for the balance of the year, according to Dentsu’s latest report on ad spending for 2023 and beyond.
- Global advertising is expected to grow to $727.9 billion, a somewhat anemic 3.3% over 2022, and down from 3.5% that had been forecast last December by Dentsu.
Read more about Dentsu’s predictions for the ad market here.
Overheard at the Digiday Programmatic Marketing Summit:
- Programmatic marketing is seemingly as complicated an endeavor as ever, at least that’s what we can take away from the conversations had by brand and agency executives during a pair of closed-door sessions at the Digiday Programmatic Marketing Summit last week.
- “I need one scalable, proven method that’s not Google. I need it 100% scalable, ubiquitous.”
Hear more takeaways from the summit sessions here.
What we’re reading
Insider reported that several WSJ staffers are concerned that layoffs will start as soon as this week under the new top editor, Emma Tucker. This follows parent company News Corp’s announcement that it will be reducing staff by 5% across all of its businesses.
Following critiques that Finkelstein has a blasé approach to launching a media company in 2023, as well as the departures of several editors who claim they were instructed to create clickbait content, Vanity Fair writes that the founder is still convinced that The Messenger is on the right launch path.
Nearly 40 years after being founded in Atlanta, CNN is planning an official departure from its central headquarters and will move into a smaller Atlanta-based office by the end of 2023, according to a report from Axios. The company has been growing its Washington, D.C. and New York City offices in the transition.
The Insider Union announced on Twitter on Wednesday that it will go on strike if management doesn’t “remedy its unfair labor practices and settle a fair contract” by end of day Thursday.
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