Interview: CN Digital President Sarah Chubb: Print And Digital Combo Gets Us Ready For Better Times
This story was written by David Kaplan.
Over the past year, a number of magazine publishers have decided that it no longer makes sense to keep different ad sales teams for print and online. For one thing, at a time of rising layoffs, companies are finding it easy to consolidate staffs in general. But as online advertising has been feeling some of the pain the print side has been experiencing, unity sounds like a sensible solution.
This past week, Cond Nast decided to erase the line between sales for its companion magazine sites and destination sites' ad sales by rechristening its interactive unit CondNet as Cond Nast Digital. As a result, CN Digital will have oversight for all online ads.
"We're putting together a consolidated digital P&L for the whole company," Sarah Chubb, who was CondNet's president and retains the title as head of CN Digital, told me this week. "Even though me and my team are responsible for online ad sales across the board, that doesn't mean everything that we do now will become like CondNet. We'll probably still end up with several different approaches in play." I spoke with Chubb about the new approach and what she believes the new system can improve upon. As Chubb explained it, the change was part of an evolving process at Cond Nast. For the past few years, the mag sites were used as circulation drivers, while online ad revenue was secondary. And though digital ad revenue growth shows signs of greater weakness, Chubb said that when the economy eventually turns around, publishers will be more reliant on online ad dollars than ever before.
A single point of contact: Integrating the digital and print sales teamsChubb says there were no layoffs as a result and none are plannedwill create the single point of contact for buyers that agencies and marketers increasingly demand. Each account will have a digital specialist working with the print side. Chubb: "The way we structured the Wired digital team over the past year is a good example. There are probably between 25 and 30 accounts that Wired Digital and print brought in together that would never have happened if it were one or the other. It showed us that by pulling it all together, we could realize a lot of advantages. In a year where everyone is challenged on the advertising side, we believe that as business starts coming back in the second half of the year if that's not too optimistic we'll be organized and ready for that added business." More after the jump.
CondNet RIP: For the most part, the 13-year-old CondNet represented a farrago of elements and dictates. Roughly two years ago, Cond Nast stripped operations and maintenance of its individual mag sites from CondNet, though the interactive unit still ran ad sales for mag sites like Wired. It also made a number of acquisitions, including news aggregator Reddit and tech news site Ars Technica. "CondNet was charged with running businesses online. We were trying to own specific categories, and make a play for some of the categories Some of our ideas were more gloriously successful than others, such as Style.com, Epicurious and Wired. Those are the shining examples. Others like, [defunct social net app] Flip, were a good try and in hindsight, I can see why it didn't work."
The rise of Cond Nast Digital: The rationale for separating the ad sales was based on Cond Nast's focus on using its websites to drive circulation, not ad saes, Chubb said. But as some sites began to grow into sizable destinations in their own rightChubb points to Glamour.com and NewYorker.comit began to make sense to tear down the wall separating the ad sales teams.
Don't knock circ revs: As more sites developed into viable ad sales properties, Cond Nast began to widen its focus beyond driving circulation. Still, Chubb rejects the notion that the company was being short-sighted when it came to the use of its mag sites. "What people don't realize is that the money to be made from selling subscriptions online is enormous because it's much more efficient than other methods, like through the mail. Plus, if you can get a rate base increase for a big magazine out of your online sales efforts, that means millions of dollars of ad revenue."
Watch the margins: Chubb also addressed the seeming disparity AdAge found last week between Cond Nast's $104 million digital ad revswhich represent 3 percent of its total advertisingand Time Inc.'s $245 million digital ad dollars, which account for 10 percent of total ad dollars. Chubb: "The thing is, Time Inc. does things for different reasons than we do, because they're public and we're not. They have been very aggressive about spending online, because they've gotten so hammered by the street for not having a digital strategy. If you look at the print and digital mastheads of Time Inc., they have enormous teams of people. I know what magazines cost to run and I am sure that they are not making any kind of margin on the revenues they're bringing in. My suspicion is that The Street hasn't been upset with them about their digital margins, it was upset that they didn't appear to be doing anything. So they essentially spent their way into that position. We're private and we don't care about The Street. We're trying to build a digital business with real margins."
By David Kaplan