Jim Spanfeller has spent nearly two decades demanding that advertisers treat digital media with more respect. Now, Spanfeller has a very different kind of challenge: To rally and diversify the revenues at one of the most difficult, splenetic publishing properties in the history of digital media.
On Monday, The Wall Street Journal reported that private equity Great Hill Partners had acquired Gizmodo Media Group and The Onion from Univision, and installed Spanfeller as the CEO of G/O Media, a newly created entity housing the properties. According to Recode’s executive editor Peter Kafka, Great Hill acquired the properties for barely more than a third of the $135 million Univision paid for them in 2016.
In interviews, Spanfeller praised G/O’s titles for growing large, loyal audiences, and said he planned to boost their revenues by leaning more on commerce and expanding programmatic advertising, as well as expanding into consumer revenue through a subscriber-exclusive content strategy.
To make that happen, Spanfeller will rely on what observers say is a deep, comprehensive understanding of the digital advertising ecosystem — knowledge he’s acquired through a career that contains more hits than misses. He’s also built a reputation as a highly demanding leader that some expect could clash with the G/O sites’ distinctive culture. Spanfeller did not respond to a request for comment by press time.
Industry observers said that Spanfeller, a veteran media executive who, years after a successful career in magazines, built a leading digital presence for Forbes and led a pair of digital-native sites, The Daily Meal and The Active Times, to acquisition, had all the qualities that would make him attractive to a private equity firm looking to turn around a media property.
“He’s original digirati,” said Wenda Millard, vice chairman of MediaLink, who’s known Spanfeller since he was at Playboy. “He’s a builder and a fixer.”
But Great Hill has also chosen an executive whose last venture, The Daily Meal and Active Times, didn’t live up to the hype that its founder whipped up around it. After vowing to build the biggest food site on the internet and raising more than $15 million from various investors, those sites were eventually sold at a price low enough that the acquirer, Tribune Publishing, did not feel it had to disclose its purchase to shareholders.
To observers like Millard, the stumble is not a strike against him. But to some former employees, those sites’ struggles – and the character traits those struggles brought out – make him a dangerous choice for a media company in need of a rally.
By the time Spanfeller launched his first self-owned digital property, The Daily Meal, in 2011, he had already been coronated as digital advertising royalty. He’d grown Forbes’s website, originally founded as a separate business, into one of the top business publications on the internet and received a lifetime achievement award from the IAB, which he briefly chaired.
While running Forbes.com, Spanfeller launched several programs that practically dared marketers to move their budgets his way. In 2003, Forbes.com started pitching advertisers on a digital ad guarantee, in which marketers who spent a minimum of $150,000 over a 60-day period were promised a statistically significant increase in several key brand metrics, including intent to purchase. If Forbes.com didn’t deliver, the advertisers got their money back.
Before Spanfeller stepped down as the site’s CEO in 2009, the minimum buy-in had swelled to $1 million over a 90-day period. The strategy’s success spawned outside imitators, not just at legacy publishers including Meredith, which unveiled a sales lift guarantee in 2011, but also at digital advertising networks such as Undertone.
It even gave rise to a competing in-house product: In 2008, Forbes.com’s sales teams rolled out The Wall Street Journal Challenge, which offered advertisers the chance to compare the performance of Forbes.com’s ads with those an advertiser had purchased in the print pages of the Wall Street Journal.
By today’s standards, digital display ads fetched enviable sums. According to a source that worked under Spanfeller at Forbes, even its standard display units could fetch CPMs between $25 and $40 in 2009.
Spanfeller carried that enthusiasm for guarantees – and expectations of premium-level CPMs – to The Daily Meal, which he launched two years after stepping down as CEO of Forbes.com. (After Forbes decided to absorb its digital counterpart, the job became “less interesting,” Spanfeller said at the time.)
The Daily Meal was meant to be a large-scale, all-encompassing site about food. Rather than an interest-specific site like Allrecipes, the Daily Meal was meant to have news, reviews, recipes, and everything in between. Like Forbes, it offered a brand lift guarantee — minimum price tag: $200,000 — and asked advertising CPMs that one former sales employee described as “outrageous” for a new digital site.
“They were very ambitious,” said one source that’s known Spanfeller since his days in magazines, which included Playboy as well as the Ziff Davis portfolio. “I think there was a little bit of naieveté – in all of us – about what it takes to build brand digitally.”
The Daily Meal and the Active Times struggled to build the scale Spanfeller sought. Despite hiring big-name editors and sales executives, including the co-founder of Saveur and the former publisher of Food & Wine, the sites had trouble building an audience on a scale that Spanfeller imagined. In Dec. 2016, the last month before their acquisition, The Daily Meal and Active Times, a sister site focused on active lifestyles, had amassed fewer than 8 million monthly unique visitors, according to Comscore. “The advertisers were always unhappy when the numbers came back,” one former employee said.
The sites eventually embraced quantity publishing emblematic of the overall digital publishing world. The Daily Meal’s news editors were expected to produce eight stories per day, according to multiple sources. Some former employees described a high-stress environment.
In G/O Media, Spanfeller assumes control of a company with some, but not all, of Spanfeller Media Group’s problems solved. The sites, collectively, have scale, reaching nearly half of all U.S. millennials, and some have built incredibly loyal audiences. But they also lost money last year and Univision was trying to rein the sites’ costs in by offering buyouts to unionized staffers.
Whether Spanfeller’s strategy for G/O succeeds or fails, much will be expected of his new charges. A caps lock-heavy memo that leaked to New York Magazine exhorts G/O employees to “BE GOAL ORIENTED.”
“He always makes his intentions known, and the expectations are clear,” said the source from Spanfeller’s Forbes days. “If you are operating at a high level, all day, every day…then when times get tough, you’ll be able to push through.”