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Al DiGuido

Time Inc.'s Opportunity for Change

Al DiGuido Consumer - 05/20/2013-09:58 AM

 

[Editor's Note: Al DiGuido is a publishing vet and a savvy direct-marketing and digital innovator with a track record of success that spans executive positions in a host of companies. Like many other industry watchers, he sees the spin-off of Time Inc. from Time Warner as an opportunity for whoever becomes the company's new CEO to make some significant changes. Here, in his second post on the matter, Al offers his take on what a new strategic plan might look like. Digital, of course, features heavily in his plans.]

I’m not sure why there is so much confusion and mystery around charting a strategy that transforms the Time Inc. magazine brands into an even bigger powerhouse digital publishing empire. Everything that is being said in analyst reports and the media is old news.

For years, we have witnessed the ongoing shift in media consumption patterns from legacy print media to the digital venue. Only the ignorant, arrogant or asleep could have missed this freight train. Let’s not over-complicate the components of the solution to Time Inc.’s problems. I refuse to believe that my thinking is “missing something” in terms of the challenges that Time Inc. and many other publishers face inside their businesses.

So here’s my plan on rebuilding Time Inc. as it spins off into its own company. If you disagree with it, let’s argue. I am sure that investors are getting tired of this asset posting operating losses and are already in a feverish discussion about how to change the course of the company.

Welcome to Time Inc. Digital

The new company must create a new pivot point from the start. It should not abandon its print legacy—which, according to PIB numbers, still retains market dominance. But it should signal to the market that Time Inc. believes in building the widest network of new digital platforms in the media industry. The new company will be focused on offering marketers the deepest suite of integrated digital solutions available. Meredith and Hearst have already provided the test case for several of these components. Time Inc. can and will do better. It is going to staff this business unit with top minds and thought leaders across the entire suite of digital offerings in the market. Its focus will be to continue to maximize its understanding of customer content and commerce needs with digital intersections.

Time Inc. Magazine Database

Time Inc. has a huge reader/visitor aggregate profile database. This database has been built by collecting email addresses from print titles as well as consumers who have subscribed to all of the newsletters and other e-alert programs. I estimate that there are 60-70 million profile records with email addresses inside this DB. Time Inc.’s brands have done a great job building engagement between the reader/visitor and their content for years. Somewhere during that time, I think it lost track of the fact that its readers were finding incremental content at venues that did a better job satisfying their information and/or community needs. The analytic teams should develop a profile of the customers and where they spend time (when they aren’t consuming the content). They should build the most exhaustive view of customer profiles and preferences ever collected in the company’s history. If they listen to their customers, they will tell them how to service them better. With this information and an understanding of the models that are working in the industry today, the company can commit to introducing a suite of new digital products. It will earn a reputation for the pace of innovation and creativity that it delivers to the marketplace.

Tablet Magazine Extensions

Within the next 12 months, each property will be responsible for publishing 10 new digital magazine titles. You heard that right. For example, at Sports Illustrated, there should be 10 new digital titles that are delivered via the tablet platform and sent on a controlled circulation basis to interested segments of its print and email subscribers. Time Inc. can and will become the industry’s leading digital/tablet publishing company. With each passing month, more of its readers and consumers are embracing this platform. It’s mission critical that it is out front in providing engaging content to its readers and innovative advertising opportunities for its marketer customers. The new company will create a business unit responsible for creating new cross-title digital publications. Here again, a comprehensive study of market sectors outside of the company’s walls for audience and advertiser density will provide it with the direction that it needs for new product development.

New Reader Acquisition Initiatives

It’s clear that Time Inc. must craft a strategy to grow the size of its consumer database. Like other print publications, it has seen significant declines in both new subscriber growth, renewal rates and newsstand sales. While it may believe that it is capturing new readers via online and social portals, the evidence proves that it is being beaten to the punch by others in this effort.

For example, I googled “NY Rangers Hockey” (after the team’s great seventh game victory) only to find that a link to Sports Illustrated’s coverage was on the second page of search results. A similar search on the Benghazi attack has no mention of Time magazine coverage on the first page of results. People’s link to Angelina Jolie’s incredible announcement is at the bottom of the results page. Consumers are finding other content connections that rank higher from a preference standpoint.

Time Inc.’s full array of content offerings (print, digital and online) must appeal to the widest group of consumers in the marketplace. It can drive incremental growth both organically and through strategic acquisitions. A team should be assembled to work with other Time-Warner business units to create programs where it can leverage these assets to cross-promote and sell offerings to its audiences.

In my household we have subscribed to People and Time, I can’t ever remember any type of upsell offer being sent to us to subscribe to other Time Inc. publications. Seems like low hanging fruit to me. In my opinion, incentives are needed for enhanced cooperation between units.

Another unit will be created to identify strategic assets for acquisition for their ability to expand the company’s penetration into incremental, marketable consumer categories. Time Inc. should abandon what seems to be a “not built here” mentality. It needs to be in land-grab mode. Time Inc. has lots of smart people in the building and some of what I  recommend here may already be going on in stealth. Nevertheless, as an “interested consumer,” I haven’t seen any evidence.

Time Inc. Digital Marketing Solutions


The company needs a new focus on providing its marketing customers with a range of solutions to help them to a better job of connecting with their customers. This business unit will operate as an integrated digital marketing agency within the organization. It already has a Content Marketing Solutions group that seems to be doing a good job of helping advertisers with “content marketing solutions.” My sense is that it needs to do much more. It can and will provide its customers with tools, technology and solutions that will position it as the leader in the industry. It may have to use some of the capital that it will save from other areas to purchase the platforms (email, search, social media monitoring, creative services etc.) in order offer a credible digital marketing services offering to its customers. It is playing catch up to the Meredith and Hearst in this regard. In addition, it should put a stake in the ground regarding its “digital content marketing solutions.” There is a huge opportunity to lead the industry in building digital publications for clients that truly engage their respective audience with engaging design and relevant content. It must become the industry’s leading special interest digital publishing (tablet and smart phone) service provider.

All that has been recommended here may be viewed by Time Inc. insiders as misinformed. They may argue that much of what has been provided is “already going on” inside the walls on Sixth Avenue. If that is the case, something is clearly broken. It’s not pleasant seeing the quarterly reports and increasing losses within Time Inc.’s business.

As an interested observer, I worry that the company’s culture lacks the urgency to take bold steps in the direction of this new vision. Time is definitely not on the company’s side. With each passing month, the competition only grows stronger in their ability to pick off readers and advertisers. Transformation is needed now. Will it happen? Only Time will tell.

 

 

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Al DiGuido

No Time to Waste

Al DiGuido Consumer - 04/25/2013-14:27 PM

 

As we all wait for the white smoke to appear above the Time Warner Center, it appears that many are  fixated on gaming the odds of one CEO candidate or another. Mr. Bewkes has already announced (after talks broke down with Meredith) that he wants to “spin out” the magazine assets into a separate company. Recent reports coming from Sixth Avenue indicate that the HR folks are doing all they can to retain their best employees during this period of uncertainty. Not sure how much Laura Lang (outgoing CEO) can and/or will do in the remaining months of her tenure. The departure of chief revenue officer Paul Caine (Time Inc.’s top sales producer) can’t be doing great things for customer relationships either.

For rank in file dealing with the day-to-day questions from advertisers and fellow employees, time passes painfully. Marketers don’t enjoy uncertainty, especially in a quickly changing and highly competitive media landscape. With each passing day the Time Inc. brand risks falling further back down the hill it will need to climb to regain its position of leadership in the publishing industry.

While we sit in this holding pattern waiting on this multi-billion dollar media icon to make its next move; my mind is filled with all sorts of suggestions about strategies and tactics where work can be done now in preparation for the ultimate transformation of  the company:

1. Knock Down the Walls: Undoubtedly there is a tremendous number of very bright people working for Time Inc., most of whom will be responsible for creating change under the new regime. I have no doubt that given the chance to express their ideas and thoughts these professionals have the keys to unlocking the value of the organization. My advice is to start polling the leadership team in each area of the business along with their direct reports to solicit ideas on ways that their business unit can be more profitable and grow more quickly. Having led several media organizations in my career, I never thought that any one person or leader had the market cornered on creative thinking and/or innovative ideas. Remove the roadblocks to success. How great would it be for the new CEO on his or her first day to be delivered a warehouse filled with thoughts, tactics and new product ideas from the current team of leaders, all laser focused on how they can strengthen the company’s market position and value?

2. Cure Big Data Analysis Paralysis: Time Inc. is sitting on one of the greatest customer profile data warehouses in the world, let alone the publishing industry. My counsel is to go live inside of this database right now. In the coming weeks, get focused on organizing user and prospect profiles into new marketable audience segments. Publishers have a great understanding of the legacy content intersections that have proven to be successful in drawing an audience that marketers and advertisers are willing to spend big dollars to engage. It’s time to identify new content intersections that are growing in terms of audience concentration and advertiser demand, as well as financial support. Get the audience development and editorial teams to work collaboratively on this project. Assemble the best minds in the search marketplace to help identify key words, phrases, topics,  volume metrics and audience velocity/ concentration patterns in the marketplace. Just as the cable television business has been able to build micro segments in categories like cooking, entertainment, travel, etc., by understanding  audience need and affinity, the goal of Time Inc. must be to identify a network of incremental content types and venues that will provide current readers, new  visitors and marketers with relevant platforms where they can experience a unique and compelling Time Inc. experience.

3. Trash Can Irrelevant Content: In 2013, we really don’t have the luxury of creating irrelevant content. Relevancy is defined by the level of reader involvement and engagement metrics. A failure to monitor this data and adjust our product offering to stay in tune with consumers is deadly regardless of venue (print, online, email, social media ). Today we have the tools that allow us to know much more about our content, so why not leverage these tools? I have always thought that my content colleagues would welcome this insight and accountability.

In the coming weeks, the editorial leadership inside Time Inc. properties needs to do an audit of every content connection being made with readers. The day of reckoning in this regard is coming soon, so why not be ahead of it now? We can remain in denial about this issue or embrace the publishing reality and welcome the new CEO with this level of transparency and understanding.

Without great content, we have no chance of engaging a community of readers with a shared interest. It’s pretty simple. As a content provider, if you can’t engage the community consistently, marketers and advertising dollars don’t show up. The end of that story isn’t pretty.

4. Where have all the Advertisers Gone?: It’s clear that there is a serious revenue problem at the core of this issue. No need to wait on the new leader to start addressing this issue. No doubt the marching orders for the new chief will be to focus on ways to run the business more efficiently and grow revenue in lock step. Time Inc. can increase the overall value of the organization by charting a course to grow revenue in all areas of the business.

I have never believed that we can cost-cut our way to market leadership. Revenue needs to be grown by acquiring new customers, retaining the existing customers and most importantly, figuring out a way to win back lost and/or declining customers. Everyone in sales and marketing disciplines within the company needs to begin creating a new strategy for a fresh assault on the market. Leadership should be asking for sales metrics (number of calls, conversion rates, email touch points, call reports, etc.) to understand how much time is being spent in front of customers and prospects. Start working on pipelines that track advertisers by property that have left in the last 12 months and/or decreased spending in Time Inc.'s brands. The boss is going to want to know where these dollars went and why. Be prepared for that.

A new day of accountability and focus is coming for the revenue producing side of the business. The solution to the value creation problem is in the market, so they need to have the chops and focus to get after it.

Time Inc. is a great company with an amazing legacy as a leader in the communications business. There are surely a lot of folks like myself that would truly hate to see such iconic brands decline due to lack of interest, passion and focus. Time Inc. should be saved and restored to its dominant position in the marketplace. It doesn’t need to be “packaged” for sale or merged into another media company.

There is truly no time to waste over on Sixth Avenue.

 

 

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