The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — At the end of the summer, Condé Nast's chief revenue and marketing officer Pamela Drucker Mann delivered some good news to the chief executive of one of its largest advertisers. The publisher had attracted a large enough audience on YouTube — 20 million subscribers — to reach the kind of scale the executive was looking for online.
“I can finally get… the quality that we have spent millions and millions of dollars [on] in your magazines for however many years — we can now have that on the YouTube platform?” Drucker Mann said he told her. “‘This is my dream come true.’”
Condé Nast only started investing strategically in the video it publishes on YouTube and other third-party platforms in the last year, following what Drucker Mann describes as a mindset change at the privately-held publisher of titles such as Vogue and Vanity Fair. The company had to let go of the idea that advertisers would pay premium rates just to reach magazine readers and visitors to Vogue.com, for example, and embraced third-party platforms like YouTube, too. It was a risky proposition: the publisher was years behind competitors like Buzzfeed and Refinery29, who had followed their audience from desktop to mobile, and from websites to social media. And some of those rivals had invested heavily in online video with little to show for it.
How are we going to open up our world around how we think about content in general and where we want that content to be?
The company built out its video production capabilities and purchased large quantities of data about its audience, which it analyses for advertisers via a proprietary service called Spire. Now, Condé Nast’s video audience is robust enough to put it in competition with television companies, like NBC and CBS, for online advertising dollars, said Drucker Mann.
“It’s legitimately new business for us,” she said. “If you go back a few years, we made content that we created, we distributed in our magazines and that was available on our owned and operated [platforms], and that's it. There wasn’t a concerted energy or effort or interest even in saying: how are we going to open up our world around how we think about content in general and where we want that content to be?”
This shift is one way Drucker Mann is pushing Condé Nast to return to profitability by 2020, after a reported more than a $100 million in losses in 2017, following a collapse in print advertising. The publisher’s digital advertising revenue equaled its print revenue for the first time in the second quarter of 2018, and the company is on track to cut last year’s losses in half this year, according to a representative for the company. Revenue from video is up over 150 percent year-over-year.
Much of Condé Nast's strategy involves putting the company's luxury sheen on the tactics many media companies are adopting to survive the shift from print to digital. Across the market, print and digital publishers are wooing brands with audience data they say will drive sales. Online video is another popular strategy, with global media conglomerates betting they can command premium advertising rates by producing large amounts of high-quality video. Others are rolling out memberships — including Condé Nast, which is testing a Vogue model — and paywall subscriptions.
“We’ve never tried to be the biggest, we always wanted to be the best,” said Drucker Mann. “The reality is the [advertising] partnership is really about the relevance and the environment and the opportunity to be in and around our content.”
Now that Condé Nast has the video audience, the goal is to get advertisers to buy in bulk and up front. At the publisher’s NewFront presentation this year in May, the publisher presented advertising products for 2019 that required brands to commit to multi-million dollar deals for the first time. Previously Condé Nast appealed to “scatter market” budgets allocated by advertisers on shorter terms throughout the year. Drucker Mann also announced the forthcoming launch of new dedicated channels for Wired, Bon Appétit and GQ coming to AppleTV, Roku and Amazon Fire. Its video offering, called Prime, also got top billing.
Now, Drucker Mann is reorganising the sales team along similar lines, putting chief business officers on top of three divisions selling advertising to different industries on behalf of the company’s entire portfolio, rather than groups of individual titles. It builds on the changes enacted by former president of revenue Jim Norton at the beginning of 2017.
Susan Plagemann, Vogue's chief business officer, will now lead fashion and beauty; Chris Mitchell, who previously led Vanity Fair, The New Yorker and other titles, will lead auto, media and entertainment, business, finance, tech, luxury and spirits; and Eric Gillin, who previously worked on the digital business of Architectural Digest, Condé Nast Traveler, Bon Appétit and Epicurious, will focus on consumer packaged goods, pharmaceuticals and health, travel, home and golf.
Each of the three leaders will still represent individual titles, but only in regards to consumer revenue opportunities, such as subscriptions and events. Plagemann, Mitchell and Gillin will retain the publications they already looked after and absorb others.
“We were half industry and half brand sellers; now it’s clear who owns what,” Drucker Mann said.
Drucker Mann is also promoting heads of advertising sales and consumer revenue from within the organisation who will oversee centralised resources and work with the division leads. Craig Kostelic, who helped launch the Food Innovation Group when Drucker Mann was the publisher of Bon Appétit, will lead advertising and Monica Ray, who replaced chief executive Bob Sauerberg as head of consumer marketing when he was promoted to president in 2010, will lead consumer revenue.
Drucker Mann said another way to increase advertising revenue is to capitalise on what she describes as the company’s ability to influence what will be popular for consumers months ahead of time — and to make that information available to brands in advance.
“When we create content, it drives SEO search tremendously. So if we can help our clients get in front of that, that’s a pretty cool angle,” she said.
That “pre-search” offering is part of Spire, the data product it has spent years building in order to try to catch up to the audience data offerings of both its peers and Facebook and Google and become more than a brand marketing partner for advertising partners.
“Everyone has data now, so good for everyone,” said Drucker Mann. “We know we create the influence, but at the same time now we can now prove we drive sales.”
We know we create the influence, but at the same time now we can now prove we drive sales.
Condé Nast is creating more content for advertisers — both branded and not branded. It launched a Beauty Studio in September where editorial teams and brands create video and social beauty content. And Condé Nast’s internal agency, formerly known as 23 Stories and now called CNX, is expected to announce a new managing director shortly, following the departure of Josh Stinchcomb in August to Dow Jones.
“We are consultants for hire,” she said, adding that the agency has accounts on retainer for the first time. Raul Martinez, Condé Nast’s corporate creative director, also oversees CNX.
For a company that has been criticised for being blind to the changes to its business model, continuing to keep its eyes open to how culture changes in a digital world will be key to making any reorganisation or five-year plan effective in the long term. Vogue and Vanity Fair's ability to define culture and trends justified the publisher's higher than average page rates in its heyday. But just as its business model is being challenged, so too is its influence. Many fashion and beauty trends are born and raised on Instagram and YouTube.
Drucker Mann underscored the value of Condé Nast's authority. "People want to know what Wired thinks, they need to know who Vanity Fair is still putting on the cover," she said. "It doesn't matter what part of Fashion Week is being reported on, people are still looking to Anna [Wintour] to say that this was right and this was wrong, whether they love it or hate it.
“There's an expectation for us.”