To help diversify revenues and lessen reliance on advertising, Vogue and GQ publisher Condé Nast International has developed a five-stage framework for creating non-ad products that it can scale across its global business.
The publisher used the framework to develop its first B-to-B product, Vogue Business, which launched in January after six months of planning. Speaking at the Digiday Publishing Summit Europe in Milan, Italy, this week, Ciara Byrne, director of business development said there are many more B-to-B products to come, such as services around recruitment and more concise intelligence reports.
“One of the first things we did for Vogue Business — because of the inherent risks of creating a B-to-B brand when most of our business and revenue comes from B-to-C — was to create an isolated team with more B-to-B experience under a different P&L,” she said. “Vogue Business is built off a subscription model, the U.S. has more experience in that. But we can pick up this best practice from our different markets.”
For Condé Nast International, over 100 years old with roots in print, finding new ways of working and organizing around product development isn’t easy. At any one time, Byrne’s team has about five different projects working through the five-stage framework, but not all will see the light of day. But finding sustainable ways of generating revenue outside of ads, or from professionals, is becoming more crucial for all publishers.
“My team develops businesses away from advertising, primarily for the Vogue title but not exclusively. That can scale across the title’s 24 markets,” she said. “There are some opportunities that a single Vogue market can’t execute on their own maybe because it needs economies of scale or it’s not profitable enough in a single market.”
The five phases in the framework include discovering insights and understanding customer problems; defining ideas and asking whether the publisher should answer this; mapping and iterating the product; accelerating from a scrappy operation to a substantial product and then scaling the established product. Each of the five phases has activities, tools, experiments and discussion points, effectively working as a governing body.
“This brings the wider business on board and you can bring them with you when you go on to get investment,” said Byrne. “They understand why you have taken these decisions; it helps with the incubation phase.”
For Vogue, there was a clear strategy and opportunity around B-to-B. During the discovery phase, the publisher asked leaders in the fashion industry the biggest problems that they faced and what would make them more highly functioning. Particularly useful insights that shaped the idea stage, said Byrne, were that leaders were interested in the effects of technology on the fashion industry, the fact that clients operate in a global landscape but need local cultural nuance and the need to know how cultural trends affect their businesses.
For the second phase in developing Vogue Business, the publisher whittled down 100 different perspective ideas, developed four personas of potential customers and experimented with different copy and creative on social posts in order to work out what the audience wanted.
A small team of four people from the business, led by Lauren Indvik, now chief editor of Vogue Business, questioned the idea of Vogue Business in the third incubation phase. “Was it desirable, viable and feasible?” she said, “Can we turn a profit, and will it affect the rest of the business, which was probably the biggest risk of this, launching a B-to-B proposition when most of our revenue and business is B-to-C?”
An email newsletter was the best delivery mechanism to test out different geographies covering and different topics that Vogue Business should cover. The publisher initially opted to call it “Perspective” to give it more freedom and alleviate the risk from being associated with Condé Nast International or Vogue. The team tested sending out the newsletter daily and weekly, settling on bi-weekly. Some markets like the U.S. loved the personalization; others, like Russia, liked it less.
After seeing readers respond positively to an infographic about how much a runway costs, the team hired a designer and made data visualizations a key part of the offering. According to Byrne, readers have adapted their marketing budget based on stories it has published.
“The two measures we were looking for were, can we aggressively grow a highly engaged audience of international fashion professionals and can we create a product that’s different enough?” said Byrne. “We needed to really understand the risks. Vogue Business is a considered measured industry publication when Vogue is more consumer-focused, so there were risks inherent in that.”