Closing the Gap: How Magazine Media is Solving for Print Losses
Time Inc., New York Media and Atlantic Media offer three unique solutions.
Among all the changes magazine media faces—consolidation, layoffs, digital—the one consistent trend is the decline of print advertising. Moody’s estimates that print ads will continue to fall 10% through mid-2018, providing little hope for a turnaround in the traditional revenue stream that media companies used to rely on.
But, it’s also true that some companies, like New York Media and Atlantic Media, have long looked past the traditional advertising spigot, to find more reliable resources of growth. This has created some innovative strategies, where organizations have sought to use their knowledge and prestige to test new revenue streams.
We take a look at three different initiatives that may not replace the advertising losses, but provide a new way of viewing the potential still inherent within media brands.
The Recommendation Business
Last year, New York Media’s executive Director of Business Development and Strategy, Camilla Cho, decided to take a closer look at the management of affiliate links. The parent of New York Magazine had a few partners that provided its sites revenue for when readers clicked to the partners’ website, but it contributed only a tiny portion of the business. Cho, however, noticed that engagement rates were “very healthy.”
The numbers indicated that readers took the advice that writers gave concerning what’s in style, what’s worth buying, and what they can ignore. Cho wanted to see if her team could better monetize this trust.
They began by testing out affiliate links on e-commerce articles developed by her team. They posted them, primarily on The Cut, the site’s fashion and politics page geared towards women, to determine what made readers click. Did more readers want shoes? Were they interested in sunwear? Did they buy more often from Amazon, Macy’s or Nordstrom’s websites?
“After a period of five months we blew through the KPIs,” says Cho. “We were able to prove a real viable business here.”
That’s when the company decided to take its long-running magazine section, The Strategist, and turn it into a website of the same name that provides reviews—and affiliate links mixed within—for a variety of products that its writers enjoy. Article topics range from the best bed sheets, to the best gifts for a one-year old. Alexis Swerdloff runs the editorial side of the project, and she has a full-time staff that includes a senior editor, three staff writers and a number of freelancers. They work in tandem with Cho and her team on the business side. The site only offers suggestions to products that “the editors or writers stand behind,” adds Cho.
The Strategist launched in October, and e-commerce affiliate revenue has grown 20 to 40% per month since, in part because it was starting at a very low level. But it has encouraged offshoot opportunities, like a pop-up shop, which debuted at the Vulture Festival in May.
“We’ve always been in the recommendation business,” says Cho, now more so than ever.
The Advice Business
Like most organizations, Atlantic Media has seen a dramatic flip in its revenue. A decade ago, print accounted for 80% of sales, but it’s now about 15%. While digital advertising makes up a large portion of the new normal, a digital agency, Atlantic Media Strategies (AMS) has become an ever-growing presence.
In 2012, The Atlantic wanted a way to capitalize on its knowledge adapting to the digital world. Plus, it worried that clients would take native advertising development in-house. “We were concerned for the long-term viability of the digital native ad market,” says Michael Finnegan, president of Atlantic Media. So he thought, “why don’t we build the disruption ourselves?”
Out of the disruption came AMS, which provides advertisers with audits of their current digital efforts, offers support for ongoing digital projects or develops and runs entire content-focused campaigns. One of its largest clients, the insurer Allstate, came to AMS looking for ways to promote community renewal and innovation. This turned into a multi-pronged campaign, including the development of TheRenewalProject.com, which includes at least three new pieces of original content each week, and the creation and management of a number of social channels. But these efforts can bleed into other parts of Atlantic Media’s portfolio of businesses, like pieces of original journalism, sponsored by Allstate, and the creation of a rewards program for innovative non-profits, to which Allstate provided $20,000 in grants for each winner. “AMS is the hub that ties it together,” says Bob Cohn, president of The Atlantic.
It’s now the fastest growing division within the Atlantic Media portfolio, doubling its staff to 40 since 2014. Last year, AMS revenue jumped 29% and that’s expected to improve to 32% this year.
The Licensing Business
Time Inc. has struggled adapting to the modern media landscape. In June, it announced another round of layoffs that impacted 300 staffers. This came shortly after its decision not to sell the company and after posting a first-quarter print advertising loss of 21%. But one area that’s showing promise for Time Inc. (my previous employer and a company I still write for at times) is in licensing its brand names to retail outlets. Although originally launched over a decade ago, the licensing unit has become an increasingly important focus of Time Inc. over the past two years, expanding programs for Real Simple, People, Food & Wine and others.
Southern Living, for instance, has an exclusive line of products in Dillard’s department stores. Products range from bed spreads, to rugs to kitchenware, and has become one of the store’s top-selling home collections, according to Bruce Gersh, Time Inc.’s SVP of strategy and business development. The number of products sold in the store has increased by 110 since 2015.