Media Companies Need to Partner with Brands If They Want to Survive in the Digital Age

Media Companies Need to Partner With Brands If They Want to Survive in the Digital Age – Adweek 11/21/18, 8:29 AM

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the landscape shifts Apple’s Gorgeously Detailed Holiday Ad Has a Moral That All By Dan Tynan 1 (https://www.adweek.com/contributor/dan- Creatives Should Take to Heart tynan/) (https://www.adweek.com/brand- | November 11, 2018 marketing/apples-gorgeously- detailed-holiday-ad-has-a- moral-that-all-creatives-should- take-to-heart/)

12 Easter Eggs You Probably 2 Missed in Apple’s Incredibly Detailed Holiday Ad (https://www.adweek.com/brand- marketing/12-easter-eggs-you- This year, advertisers will spend $46 billion on probably-missed-in-apples- programmatic ads, according to eMarketer. incredibly-detailed-holiday-ad/) Photo Illustratiom, Source Getty Images, iStock Omnicom Wins 10 Year, $4 Lava crackling down the slopes of Kilauea. 3 Billion Army Contract After Elimination of Incumbent The whispering walls of Gol Gumbaz in McCann Bijapur. A strangely beautiful ultrasonic (https://www.adweek.com/agencies/omnicom- conversation between rats in downtown wins-4-billion-army-review- Manhattan. after-elimination-of-incumbent- mccann/)

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When The New York Times Magazine 10 Royalty-Free Music Sites published its “Voyages 2018” issue last 4 Every Online Video Creator September, readers could not only see the Should Know visually stunning images on the (https://www.adweek.com/digital/royalty- free-music/) magazine’s pages, but they could also listen to them, thanks to a web-based An AI Tried to Write the Perfect soundtrack created by the Times’ T-Brand 5 Lexus Ad. Here’s a Scene-by- Studio (https://www.adweek.com/tv- Scene Look at What It Was video/this-weekends-new-york-times- Thinking magazine-wont-be-filled-with-words/). (https://www.adweek.com/programmatic/an- ai-tried-to-write-the-perfect- lexus-ad-heres-a-scene-by- The audio-zine was not merely a unique scene-look-at-what-it-was- blend of analog and digital. It also thinking/) represented a unique collaboration between editorial and advertising, content and commerce. And it may signal a way forward for traditional media companies struggling to survive in the internet age.

Like the Times’ November 2015 foray into virtual reality (https://www.adweek.com/blognetwork/nyt- launches-virtual-reality-project/12598), when it shipped 1.3 million Google Cardboard VR headsets along with copies of the Sunday paper, the Voyages project was created in collaboration with GE, which contributed three audio reports of its own.

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That’s a clear sign of how much the media landscape has shifted over the last five years, says Sebastian Tomich, global head of advertising and marketing solutions for the Times.

“When I started at the Times, it was your traditional media sales business,” he says. “The newsroom put out a product, you took that to advertisers, talked about how big the audience was and the various sizes of ads you could sell, and then you sold them.”

Now the Times is no longer just a newspaper and a website. It’s a sponsored content agency (https://www.adweek.com/digital/new- york-times-runs-its-first-ever-native- print-ad-161547/) and a film studio. It’s an events (https://timesevents.nytimes.com/) and conference business. With the acquisition of HelloSociety (https://www.adweek.com/digital/nytimes-buys-digital-marketing-company- hellosociety/) in March 2016, it became an influencer marketing firm. And,

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increasingly, the Times is a strategic consultant for the brands that appear in its pages.

Those changes necessitated an equally dramatic shift in the Times’ culture. While editorial integrity remains the hallmark of the organization, Tomich says there’s a lot more communication between the edit and ad sides of the house. And when the Times goes on a sales call, everybody comes along for the ride.

“There’s a wholesale evolution of the talent involved,” he says. “Now we have a creative team, a strategy team, tech and product teams, and a sales team, and they work hand in hand as peers to service each client.”

Changing times

The Times is hardly the only media giant undergoing a massive transformation. Last month, Condé Nast announced a top-to- bottom restructuring of its ad sales team (https://www.adweek.com/digital/condenast-reorganizes-ad-team-under-pamela- drucker-mann/), splitting it into three divisions based on its culture, style and

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lifestyle titles. Condé Nast is consolidating research, events, sales and ad operations under a single chief revenue officer.

Last week the iconic magazine publisher launched its own creative agency, CNX (https://cnx.condenast.com/). It had already announced plans to create over- the-top video channels (https://www.adweek.com/tv- video/despite-ups-and-downs-this-year- conde-nasts-ceo-is-creating-a-model- thats-built-to-last/) for Wired, GQ and Bon Appétit.

Condé Nast expects to be less dependent on ad revenue going forward. In an interview with Adweek (https://www.adweek.com/tv- video/despite-ups-and-downs-this-year- conde-nasts-ceo-is-creating-a-model- thats-built-to-last/), CEO Bob Sauerberg said advertising would account for half of Condé Nast’s future revenue, instead of the usual 70 percent.

Thanks to a spate of acquisitions, Meredith is now the largest magazine publisher (https://www.nytimes.com/2018/03/11/business/media/heartland-

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company-leads-media-race.html) in the world. But it has also undergone multiple rounds of layoffs, including one this fall that claimed 200 jobs (https://www.adweek.com/digital/meredith- announces-changes-lays-off-200- employees/).

Like the Times and Condé Nast, Meredith is diversifying its revenue streams, says the president of Meredith Digital, Stan Pavlovsky. The publisher is the world’s second-largest brand licensor (behind Disney), offering items like Better Homes and Gardens furnishings and EatingWell frozen foods.

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“We have 10 direct-to-consumer offerings and drive hundreds of millions in retail sales via ecommerce and affiliate relationships,” Pavlovsky says.

Traditional broadcast networks are also feeling the heat. The Walt Disney Co. recently consolidated all of its properties— including ABC, Disney’s cable networks and ESPN—into a single sales division. Discovery, Turner, Univision and Viacom all announced layoffs this year.

NBCUniversal has rejiggered its sales operations at least three times over the last five years, most recently this fall, when it laid off more than 50 ad sales positions.

At the same time, NBCU has invested heavily in digital initiatives—including more than $1 billion in digital native companies (https://www.adweek.com/tv- video/inside-nbcuniversals-billion-dollar- bet-on-data-based-advertising/) BuzzFeed, Snap and Vox. Earlier this year it rolled out CFlight (https://www.adweek.com/tv-video/how- nbc-is-giving-brand-partners-the-most-

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comprehensive-understanding-of-their- ad-exposures/), a way to measure viewership across multiple platforms.

Mark Marshall, newly christened president of advertising sales and partnerships at NBCU, says the network has had success monetizing video clips from key franchises, such as Saturday Night Live and The Tonight Show, on YouTube and mobile.

“The days of selling our content in one linear process are over,” says Marshall. FEATURED JOBS “We need to bring customized solutions to our clients, be increasingly nimble and University Creative Agency provide an even higher level of customer Director service to all our partners.” UT Tyler Tyler, Texas Rise of the machines (https://jobs.adweek.com/job/university- creative-agency-director-tyler-texas- The biggest driver of these changes is the 277762) dominance of programmatic advertising, Art Director says Raju Narisetti, former CEO of Bully Pulpit Interactive Gizmodo Media Group and currently a Washington, Washington DC professor at Columbia University’s (https://jobs.adweek.com/job/art- Graduate School of Journalism. director-washington-washington-dc- 277760) Machines can match ads to audiences with Lecturer in Digital Advertising greater efficiency and at much lower cost, University of Illinois at Urbana- while at the same time providing Champaign https://www.adweek.com/digital/media-companies-need-to-partner-w…orningDigest_Newsletter_2018111207&s_id=5b0703f23f92a47726e1da25 Page 9 of 24 Media Companies Need to Partner With Brands If They Want to Survive in the Digital Age – Adweek 11/21/18, 8:29 AM Champaign Urbana, Illinois (https://jobs.adweek.com/job/lecturer- in-digital-advertising-urbana-illinois- 277768)

Director of Marketing and Communications, Penn State La... Conﬁdential University Park, Pennsylvania (https://jobs.adweek.com/job/director- of-marketing-and-communications- penn-state-law-and-the-school-of- international-affairs-university-park- pennsylvania-277771)

Assistant Professor – Advertising incontrovertible evidence for which Digital Strateg... campaigns are the most effective. Graystone Advertising Syracuse, New York (https://jobs.adweek.com/job/assistant- This year, advertisers will spend $46 professor-ndash-advertising-digital- billion on programmatic ads strategist-syracuse-new-york-277765) (https://www.emarketer.com/content/us- programmatic-ad-spending-forecast- See More Jobs 2018), according to eMarketer. By 2020, (http://jobs.adweek.com) more than 85 percent of display and nearly 80 percent of video ads will be bought via automated channels.

Of course, more than 60 percent (https://www.recode.net/2018/3/19/17139184/google- facebooks-share-digital-advertising-ad- market-could-decline-amazon-snapchat)

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of digital ad revenue still fill the coffers of Google, Facebook and, to a lesser degree, Amazon.

“I don’t envy my sales friends working on the ad-tech side,” says Jesse Math, vp of display and social for PMX Agency (https://www.pmxagency.com/). “It’s a tough environment for them. Some companies have gotten out of the media- buying game altogether and have become analytics or data companies.”

As a result, publishers and broadcasters have been forced to diversify their revenue streams. Roughly half of Gizmodo’s revenue came from display, programmatic and video ads, Narisetti explains. The rest was made up by ecommerce and custom content.

“We were able to grow our top line in the high double digits, and that’s without even thinking about events, subscriptions or syndication,” he says. “I think the sustainable media companies are discovering that if they can have six or seven different revenue streams, they can collectively grow a business without really changing who they are.”

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Always be consulting

When programmatic advertising began to take off, many media companies thought they no longer needed large teams of salespeople in the field, building relationships with clients.

Now, they’re starting to rethink that approach, says Susan Bidel, Forrester Research analyst for b-to-c marketing. But that doesn’t mean a return to the old ways of doing business.

“I think media companies are realizing that it’s in their best interests to have salespeople who are digitally fluent but can also position themselves as real partners to their clients,” she says.

Many of these companies don’t have the right skills in-house to make the transition to the digital world—a key reason for the recent rash of layoffs, says Matthew Gay, head of advertising and marketing solutions for Accenture.

“I think they’re getting serious about retooling their workforce,” he says. “They’re getting rid of people who have

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been doing things a certain way and finding people they can retrain to operate in ‘the new.’”

Media companies need their teams to act less like salespeople and more like problem-solving consultants, says Gay.

“Whether or not media companies want to admit it, a large part of their business has been order taking,” he adds. “There’s still a lot of ‘buy this’ or ‘I’m selling that.’ Salespeople need to understand how their media company’s ad products can solve the needs of their customers.”

The mobile morass

If the transition from print and over-the- air broadcasts to digital has been challenging, that’s nothing compared to mobile.

Nearly three-quarters of audience engagement happens via mobile devices, says Narisetti. But most media firms still get the lion’s share of their digital revenue from desktop because there’s more room for ads.

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“The growing gap between where your audience is and where your digital revenue comes from is a challenge that’s not easy to solve,” he says. “That’s why you don’t hear media companies talk about mobile revenue; you just hear them talk about mobile audiences.”

The good news? Because people check their phones an average of 80 times a day (https://www.asurion.com/about/press- releases/americans-dont-want-to-unplug- from-phones-while-on-vacation-despite- latest-digital-detox-trend/)—nearly twice as often (https://priceonomics.com/which- generation-is-most-distracted-by-their/) if they’re millennials—mobile provides many more opportunities for advertisers to grab people’s attention, says Narisetti. Now they just need to figure out how.

One thing holding back monetization of mobile is the lack of a standard way to measure video consumption across multiple platforms, says Catherine Sullivan, president of U.S. investment for Omnicom Media Group (https://www.omnicommediagroup.com/).

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OpenAP (https://www.adweek.com/tv- video/turner-fox-and-viacom-tap- accenture-to-run-their-audience- targeting-platform/), introduced in 2017, is a collaborative effort from Fox, Turner and Viacom to create an independent way to measure cross-platform targeting. But adoption has been slow.

“Even if it has a lot of flaws, OpenAP is still a step in the right direction for creating a measurement system that is more like digital,” notes Sullivan. “But there’s still too much of a walled-garden mentality. I know our clients are getting more and more frustrated by all the talk and not enough action.”

The media landscape is likely to be in flux for a year or two before things settle down, says the Times’ Tomich.

“Honestly, I think everyone is still trying to figure out how we’re going to make enough money from this new world to be a sustainable business in the future,” he says. “I feel like the Times has made the jump, as well as a select number of competitors. But for the most part, it’s fairly chaotic.”

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This story first appeared in the November 12, 2018, issue of Adweek magazine. Click here to subscribe. (/subscribe- (https://www.adweek.com/issue/la-appeared) issue- 2018/)

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