The pivot to paid leads to talent squeeze at publishers
The switch to reader revenue is in full swing, and a talent squeeze is following as publishers hunt for experts in areas like product design, user retention and data crunching.
According to Martin Tripp, managing director at headhunting consultancy Martin Tripp Associates, which typically works with business media companies like Thomson Reuters, applications to fill C-suite level roles at business media companies requires experience in driving subscriptions.
“You need to have prior experience. It’s ubiquitous; it’s a very pronounced trend,” he said. “Getting the right subscription proposition is tough. The key performance indicator is renewal rate: You can persuade people to subscribe for one year, but if they haven’t got that value from the product, then they won’t subscribe again.”
Greg Harwood, director at strategy and marketing consultant Simon-Kucher & Partners, said publishers are looking for experience at the executive level in monetizing audiences as effectively as possible. Often, that’s experience in driving subscriptions or from a background in online platforms like eBay or Graze, which rely heavily on understanding audience needs.
Publishers are interested in candidates with knowledge and understanding of product design — content and distribution — as well as marketing, sales and data analytics. Harwood said this means more traditional marketer skills when subscriptions are part of the mix, as well as the ability to use and understand predictive analytics, promotional tactics and the appreciation of the editorial product from a customer point of view.
Publishers are hiring chief customer officer roles in an effort to evolve into more customer-centric organizations. Now, Harwood said, decisions on subscription pricing happen at the executive level. A more common path is from the CCO to the CEO. But this skill set is increasingly in demand.
“The supply and demand ratio is completely off-kilter,” said Tripp. “Fifteen years ago, there was only a handful of real subscriptions businesses. Now, there’s a huge increase in businesses moving into the space and not a lot of experienced people to share around. Salaries in those areas have increased dramatically.” Over five years, a salary for a global head of sales role at a business publisher had increased by 50 percent, according to Tripp.
“It’s inevitable there will be a squeeze on capacity and resource, but it hasn’t manifested yet [in the consumer space]. There could be a lag on that,” Harwood said. “The switch to reader revenue has definitely happened in the last 12 months. There will be a transition period where people will still monetize their ad business as much as possible.”
Instead, publishers are hiring from within and reorganizing teams. For instance, The Economist combined its sales and circulation teams in April to form a new publisher team headed by Michael Brunt as chief operating officer and publisher.
Business publishers have been in the subscriptions business for longer, charging higher prices for valuable information people can’t do without. More consumer publishers are turning to subscriptions, innovating with new products and exploring new revenue options. Bloomberg’s announcement of its consumer paywall this month, while it already has a healthy business subscription product in the Bloomberg Terminal, indicates the direction of travel.
While Tripp believes consumer publishers can learn from business counterparts, moving from a business to consumer publisher has its difficulties. “Consumer audiences are more of an amorphous mass,” he said. Identifying the needs of potential client base and how to meet them is easier when a company helps them make financial market decisions, less so if it’s general news or lifestyle audiences. “A business publisher executive’s skills could become unstuck quickly.”
Movement is still possible, especially through acquisition or career development.
“You have to be sector agnostic: Hire for value; train for skills,” said Liz Dowling, founder at headhunting and talent consultancy Liz Dowling & Partners. “What’s the difference between growing subscriptions and increasing the number of followers online? The acquisition is the same, even if the transaction is different.”
Publishers need to balance their advertising and subscription models, often prompting questions about where each discipline sits in the business. They are, of course, linked: Ad businesses are becoming more customer-centric as the knowledge of their audience improves through subscription models.
Previously, said Dowling, executives with ad-sales backgrounds have been driven on operations and commission rather than implementation and delivery. Ad sales have key accounts, are negotiator-led and can carry heavy discounts.
“The routes [to C-suite level] are transitional,” said Harwood. “It’s fairly fickle, but if advertising is growing year on year, people will hang their hat on whichever part of the business is growing.”
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