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 — When Kate Ward started her media career at Entertainment Weekly in 2007, her plan was to never leave. "I thought I'd start my career at Time Inc. and just be there my whole life," she said during an interview in her office at Bustle Digital Group, where she is now editor-in-chief. "I never imagined I would go this route."
More than 10 years after her first job in magazines, so much has changed in the media industry that trying to describe it in a sentence is an exercise in futility. Last year, failed pivots to video along with scandals and algorithm changes at Facebook finally killed the notion that viral content would save digital media. The industry reacted with brutal cuts: In 2018, Meredith Corp., Hearst, Condé Nast, Refinery 29, BuzzFeed and Vox all made headlines for employee layoffs.
Condé Nast announced that it would shutter the print edition of Glamour — its magazine division’s former cash cow — and place three titles up for sale, following reports that the company lost $120 million in 2017. Now, imagining pieces of its portfolio as part of Bustle Digital Group — which acquired Elite Daily, The Zoe Report, Mic, Flavorpill and Gawker last year — is hardly crazy. In fact, BDG aims to replace Condé Nast as the world’s top portfolio of fashion and women’s publications, with entirely digital native properties. “That was always the plan,” founder Bryan Goldberg said. “And that's what I told everybody in 2013 and nobody really cared to listen.”
How many brands are we going to have under our umbrella in five years? I don't know, 15, 16, 20?
Rachel Zoe, who sold The Zoe Report to BDG almost a year ago for an undisclosed sum, has been so happy with Goldberg, who she knew as a friend prior to going into business with him, that she said she could imagine working with him on other projects. “It's a totally unconventional person who I think leads this type of company,” she observed. “He's done exactly what he said he's going to do.”
BDG, which started as one site with a handful of editors in a rented townhouse in Williamsburg, Brooklyn, now spans three floors in a lower Park Avenue office tower housing 300 employees, with additional offices in LA, Chicago and London. Seemingly awash in resources, Bustle has two rooms dedicated solely to podcasting in its New York space alone. Boxes of LaCroix and pineapple pool floats dot the office along with other Instagram accessories that have become essential to the tens of millions of not-girls, not-yet-women who visit Bustle.com and its sister properties every month. Employees sit elbow to elbow at long rows of computers. Not much desk space remains.
Bryan Goldberg | Source: Courtesy
Goldberg is halfway through a 10-year plan for BDG that includes more acquisitions, perhaps from Condé Nast. (According to a source, he's not interested in the three titles currently for sale — Brides, W, and Golf Digest — though he could see BDG acquiring Glamour or Allure.) He imagines the company running print publications within the next two years, but his ambition doesn't stop there. "In five years, we will be the largest publishing company in New York with the most journalists on staff doing the best work," he said. "And how many brands are we going to have under our umbrella in five years? I don't know, 15, 16, 20?"
In 2012, Goldberg sold Bleacher Report, the sports site he co-founded, to Turner Broadcasting for upwards of $200 million. In 2013, he managed to hire Ward to launch Bustle. He was impressed by her streak of promotions at Time Inc. and sent her a message on LinkedIn. Their first meeting took place over beer and nachos in downtown Manhattan. She wasn’t a consumer of sports news and didn’t know Bleacher Report. She asked Goldberg for references, and he provided her with eight names. She set up meetings with all of them. “I was so impressed by that thoroughness and that due diligence and I just said, she's behaving like a CEO here,” said Goldberg. “I was like, this is someone who I think could really run something much bigger.” He had to offer her the job three times before she accepted.
One thing that may have set Goldberg and Bustle Digital Group apart is a rare sense of optimism — that women's media isn't on its last breath.
Goldberg had not yet announced publicly that Bustle would be his next venture. When he did, his thoughts on how the women's media landscape would evolve — that shopping articles about lipstick would run alongside news about Syria — smacked of a bro emerging from a cave sealed off from the internet's long-thriving feminist blogosphere. First came a highly criticised Pando Daily article by Goldberg himself, followed by a 6,000-word profile in the New Yorker that portrayed him as a clueless, self-serving executive who saw young women merely as a demographic he could exploit for a profit, both as media consumers and a source of cheap blogging labour.
In some respects, Goldberg’s position wasn’t all that unique. For one, men have always sat atop portfolios of the world’s largest women’s media brands. The executive teams at Condé Nast, Hearst and Meredith Corp. are composed overwhelmingly of men though the audiences their magazines serve, and the editorial teams at those magazines, are made up overwhelmingly of women.
Kate Ward | Source: Courtesy
One thing that may have set Goldberg and Bustle Digital Group apart is a rare sense of optimism — that women’s media isn’t on its last breath, that advertising is a good business model, that losing or gaining 5 million uniques here and there needn’t send executives into tizzies.
Then, there was the company’s contributor model.
In 2013, as the maelstrom of bad press swirled around Goldberg, Ward and her few colleagues employed the Bleacher Report’s contributor model to grow traffic aggressively. Under the approach, a vast network of writers did around-the-clock shifts for low hourly wages to deliver a quota of blog posts that often capitalised on trending Google terms to attract clicks. A large volume of such content, supported by a fast, proprietary CMS, enabled the site to rank high in Google’s search results for a wide range of topics and begin building a loyal following on social media. (Both Ward and Goldberg have always believed that sustained audience can most reliably be acquired through search rather than social networks, though Ward strives for a diversified traffic mix.)
Traffic came quickly: in five months, Bustle.com grew to a million uniques, according to Google Analytics; by the end of the first year, it hit more than 12 million a month. Romper, a site for millennial moms, launched in the fall of 2015 after Ward and her team pitched it to Goldberg as an opportunity to attract an underserved audience. Within a year, it had grown to nearly 9 million monthly uniques in Google Analytics.
Unlike many digital editors, Ward says traffic doesn't keep her up at night.
Today, Ward runs the editorial arms of Bustle, Romper, Elite Daily and The Zoe Report, and this year will add Mic to her purview. Elite Daily has become BDG’s destination for millennial self-help, while The Zoe Report serves the fashion vertical. Ward describes Bustle and Elite Daily’s fashion coverage as democratic, centred around affordable price points and the ethos that fashion is for anybody.
The Zoe Report is the portfolio’s tastemaker, showcasing brands of a higher price point that may be unfamiliar to Bustle readers. “A Reformation, I think, was something that people did not know five years ago,” Ward said. The Zoe Report is “figuring out what are those new Reformations.” While original fashion and celebrity photo shoots have appeared on Bustle and Elite Daily, The Zoe Report plans to publish its own shoots beginning in 2019. Zoe remains involved with the site as editor-at-large, and regularly attends pitch meetings to clients and appears in sponsored content.
Unlike many digital editors, Ward says traffic doesn’t keep her up at night. She’s never been handed a traffic goal, though she sometimes sets one for her team. Goldberg, Ward said, hasn’t ever been a micro-manager, and has pulled back even further from the day-to-day operations of the sites to focus on acquiring new properties.
Janelle Monáe performing at Rule Breakers | Source: Courtesy
Now that she and the editorial team have established scale — something that remains important to BDG's suite of advertisers — she's focused on investing time and money in premium features and photography, showcased in the "digital issues" she launched last year. Serving as mini-magazines versus a never-ending feed of the news of the day, they were designed as destinations for advertisers but also as a way to surface Bustle's best stories, which will be crucial as BDG's brands aim to become known as something more than a traffic behemoth. The "Rule Breakers" issue that debuted in 2018 was sponsored by HP and 1850 by Folgers and featured a profile and photo shoot of Janelle Monáe, who headlined a corresponding Rule Breakers event in Prospect Park, Brooklyn.
Four thousand people paid between $35 and $65 a ticket to attend the event, where they could watch Monáe, participate in a "mass meditation," roller skate, mix a custom face scrub by St Ives and apply temporary tattoos while waiting to use a photo booth. The franchise seems to be asserting itself as a replacement for Glamour's annual "Women of the Year" issue and invitation-only event.
Jason Wagenheim, BDG's chief revenue officer who joined the company two years ago from Fusion after four years at Condé Nast, where he served as publisher of Glamour and then Teen Vogue, said that in 2019, the company would unveil a dozen new "experiences," and put on "several dozen" events overall, including the second Rule Breakers. (Wagenheim said the acquisition of Flavorpill, which already had the ability to execute live events, enabled Rule Breakers.)
They're not trying to pivot with a legacy institution and legacy infrastructure.
Events have always been core to the magazine business, said Wagenheim, who added he isn’t desperate for new revenue streams. “We're not going to go launch a lipstick line, or a clothing line, and be in places where we're not good, just like our advertising partners have had a lot of missteps and challenges trying to become publishers.”
Goldberg told the New Yorker that by 2019, Bustle would attract 50 million unique visitors a month and earn $100 million in ad revenue. His projection wasn't wildly off. In November 2018, BDG attracted 49 million unique visitors, according to ComScore. In 2018, BDG's revenue grew 57 percent, to $75 million — a $50 million increase from two years ago.
Advertising business in the retail category grew 107 percent, and fashion 112 percent, representing the company’s two largest drivers of ad revenue. Affiliate shopping revenue accounts for 12 percent of overall earnings, with most of that money coming from sales of beauty products. The typical sponsorship deal runs in the mid-to-high six figures.
“When I see those revenue jumps, that’s impressive,” said Albert Thompson, managing director of digital for Walton Isaacson, an advertising agency. “They’re not trying to pivot with a legacy institution and legacy infrastructure,” he added.
Bustle's approach has certainly attracted the kind of controversy that luxury advertisers may want to avoid.
Erica Kasel, chief marketing officer at the Jane Smith agency and Chanel's former vice president of marketing and digital for the US, said that while luxury advertisers will always be wary about the environment in which they appear, they've become savvier about digital advertising, and that BDG offers an easy opportunity to reach a millennial consumer at scale. "If it's not the right fit for them in terms of the look and feel, that's a call that they can make," she said, "but I caution against dismissing it because the person who's buying it and investing in it at the brand level may not be the same as the person who's consuming it."
Bustle's approach has certainly attracted the kind of controversy that luxury advertisers may want to avoid. BDG's acquisition of Elite Daily came only after half its 94 staffers had been laid off. Mic's acquisition followed the layoffs of 113 unionised employees, including its entire editorial staff. Given Goldberg's plans to relaunch the site, former Mic staffers and freelancer advocacy group Study Hall portrayed the sale as a means of squashing the union in a statement late last year.
In the same statement, Study Hall also used Bustle’s content farm as an example of media companies devaluing journalism and exploiting writers — many of them women — for low pay. Writer Erin Corbett told me she made $10 per hour when she started as a Bustle.com intern working part-time as a contributor in early 2016 and worked her way up to $12.50 an hour after a year. “Ask Bryan Goldberg how much money he has and if he feels good having that much money if he's paying his workers poverty wages,” said Study Hall co-founder Enav Moskowitz. (Ward declined to comment on pay rates; a BDG spokesperson declined to comment on Study Hall’s statement.)
"How to take up space with your winter outfits" | Source: courtesy
Yet it is this contributor model that attracted Allison Goldberg (no relation to Bryan) of Warner Investments to Bustle in 2013. “We really believed in the vision of the company and the idea of going big as a digital-first company targeting women of the 18-to-34 demo through a wide range of topics,” she said. “We felt like there was a really big wide-open space in the market for that.”
Last year, BDG closed a $30 million round of Series C funding, bringing its total venture capital investment to $80 million. Goldberg plans to use the funding and any future investments to aggressively expand the portfolio. “We are not just going to be a singular site, or a singular brand,” said Wagenheim. “The goal is to have maybe 10 or 12 great brands in the next 12 to 18 months that can live together or be their own independent properties.” Though BDG’s leadership sees the company as a modern Condé Nast or Hearst, they don’t view these legacy publishers as competitors.
Based on November 2018 figures from ComScore, Bustle.com attracted 35 million uniques that month, far surpassing Glamour.com (7.6 million uniques) and TeenVogue.com (9 million uniques), though BDG's Elite Daily (15.7 million uniques), The Zoe Report (2.46 million uniques) and Romper (6.5 million uniques) attracted fewer people.
The acquisition strategy will look familiar to media executives: the company is targeting sites that enable it to expand its advertising business into new categories, and then scaling that advertising across its network. (In 2018, fashion brands that had previously run on The Zoe Report, like Cartier, Fendi and Gucci ran advertising across the BDG portfolio for the first time.) Gawker will receive investment to hire marquee writers and publish longform journalism. Wagenheim is interested in acquiring properties in food, wellness and travel.
But experts say that BDG will need to grow to 100 million uniques to become a major player and profitability may pose challenges. "BDG is highly focused on balancing growth and profitability, particularly as we continue to acquire media brands in 2019," said the company in a statement.
Just don't expect BDG to pivot to video. Ever. Goldberg stands by his 2013 Pando Daily article, "Online Video is a Pain in the Ass."