Hearst and Time Warner Grab Web-Only Properties to Bulk Up Online Stables

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By Nat Ives

Published: July 30, 2007

NEW YORK (AdAge.com) — It took a little while, but most magazine and newspaper publishers eventually accepted the need to establish web versions of their cherished print properties; it was pixelate or risk perishing. But now those same publishers are demonstrating a growing belief that while those companion sites are necessary, they are not sufficient.

Jonathan Simpson-Bint, president of Future US, says that publishing companies have been picking up new web brands because of difficult experiences migrating established print titles online.

Hearst Corp. acknowledged as much last week when it revealed a deal to buy UGO Networks, a suite of men’s lifestyle sites about games, movies, TV, movies, music, sports, women and comic books — but little connection with established Hearst magazine brands such as Esquire or Seventeen. Condé Nast Publications has been busily building sites such as Flip.com, Lipstick.com and others with zero old-media roots. And who can forget Time Inc.’s online-only Office Pirates, both born and axed in 2006? It may have survived only six months, but its parent has promised to try again.

Part of the drive stems from the failures of many print brands to make much of themselves on the web. Hearst’s Esquire.com drew 247,000 unique visitors in June, according to ComScore Media Metrix; UGO sites got 11.2 million.

“A lot of companies are aware of the fact that big media brands have not successfully migrated online, or that there’s certainly a lack of them,” said Jonathan Simpson-Bint, president of Future US, publisher of magazines such as Guitar World, Pregnancy and PC Gamer. “So the feeling is we need these new brands.”

New players dominate
Even an established online player such as Time Warner’s AOL has found more success with gossip site TMZ than it ever did depending on Time Inc. brands such as People.com. TMZ drew more than 9.3 million unique visitors in June, up 99% from last June, ComScore said. People.com, now in Time Inc.’s control, got fewer than 6.1 million, up 29%.

Future US has a lot invested in magazine companions such as GuitarWorld.com, but it also just launched a brand at Gloob.TV, where editors present videos picked from the ocean of available clips. And that curated experience was supposed to be the main draw, but already visitors are making good use of another element: the ability to embed their own videos in the comment threads.

New digital brands can draw from those sorts of interests and influences of crowds — in a way that established names can’t. “A lot of the big successes online are successful at something that wasn’t their original goal,” Mr. Simpson-Bint said. “MySpace was built to be basically a network for bands. They didn’t really think that 20 million kids were going to go get their own home pages on there. If you put something out there and it’s exciting and malleable and connects with people, the audience will potentially take it in a different direction. You have to create the room for these things to take place. That’s possibly why established media brands have struggled online — because there’s automatically baggage.”

Not giving up
It’s not that anyone, including Future US, is giving up on digital companions for print properties. They remain the centerpieces of most online businesses run by traditional print operators, who view other acquisitions or launches as complementary.

“You take Seventeen.com and some of our teen magazines … it translates pretty well,” said Ken Bronfin, president of Hearst Interactive Media. “UGO reaches an 18-to-34-year-old male demographic, which is often difficult to reach with traditional media properties.”

Established print brands have an opportunity to capitalize on their currency among advertisers and readers, said Eric Blankfein, senior VP-channel insights director at Horizon Media. “The approach to promoting the web versions of competing magazines is what’s key, not the fact that they haven’t been created from the ether,” Mr. Blankfein said.

But online brands’ central focus on digital and ability to offer interactive experiences, among other things, overpower the strength of magazines’ print brands and content, said Rishad Tobaccowala, president of the Denuo Group. And where eyeballs flock, advertisers tend to follow.

Buying blog cache
There are, of course, different ways to deploy a brand online. Complex magazine, where Complex.com is an important part of the brand footprint, has just formed partnerships with the independent blogs Nice Kicks, Nah Right, Bastardly and SlamXHype. Each deploys classic internet irreverence and subject expertise to attract and maintain its audience. Complex could have tried building similar blogs on its own site, but it didn’t see as much upside.

“When you have an opportunity to get in bed with and partner with people who are pure and organic as possible, especially in the trend marketplace, it’d be insane to reinvent the wheel,” said Rich Antoniello, publisher of Complex. “Also you can’t just decide, ‘We’re going to be pure and organic.’”

At Condé Nast and its CondéNet division, destination sites such as Epicurious.com are meant to be big ad plays while companion sites such as VanityFair.com are meant to enhance print readers’ relationships with each title.

‘Companions’
“You could try to build a really big site based on a brand,” said Sarah Chubb, president of CondéNet. “We have just chosen to be very focused on having the sites be companions to the magazine. That means echoing the brand, supporting the brand, giving the person who’s really into that magazine more to do online. Which is very different from trying to make a big magazine site itself.”

The new brands do lend themselves to faster growth, Ms. Chubb added. “A brand like Epicurious, because it was a new brand, had elasticity to it that meant, from day one, that we could make it what we wanted, which was the No. 1 destination for food online. If you’re working with a pre-existing brand, a pre-existing corpus, it’s a different thing.”

Exclusive: MediaVest Wields $900 Million to Land Issue-By-Issue Circ Promises

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By Nat Ives

Published: May 07, 2007

NEW YORK (AdAge.com) — Kraft, Wal-Mart and Coca-Cola are among the marketers that are prepared to stop spending in magazines if they don’t get issue-by-issue circulation guarantees.

Robin Steinberg, senior VP-director of print investment and activation at MediaVest, insists that magazines should make issue-by-issue circulation guarantees to marketers.

Media buyers long have been frustrated with many magazines’ insistence on guaranteeing only average paid circulation — instead of guaranteeing the paid circulation of specific issues in which ads actually appear. But now MediaVest USA has gathered support from heavyweight clients to make issue-specific guarantees a reality.

“Let me be clear that I am a print champion,” said Robin Steinberg, senior VP-director of print investment and activation at MediaVest. “However, we believe that all publishers should make this guarantee, and we will walk away from business for those who don’t.” MediaVest spent about $900 million in consumer magazines on behalf of its clients last year.

New leverage
The new power play reflects the growing demand for precision metrics in the media business, a drive fueled by an internet model that seems to promise instant accountability. It is also, though, part of a broader regime change in the industry, one that has delivered dominance to advertisers from media owners. Marketers now have too many options and have found too many ways to sell themselves, beyond traditional advertising, for publishers or broadcasters to keep setting the agenda. There’s a reason commercial ratings on TV have arrived at last: Advertisers seem to finally have enough leverage to force the issue.

“As somebody who’s ultimately paying the bills, what I’m looking for is accountability and transparency,” said Donna Campanella, executive director for global media at Avon, a MediaVest client. “We want to make sure that the impressions we were hoping to get for a particular issue have been delivered. Because what we advertise is coordinated with what’s in our brochures, timeliness is important.”

“In this age when there are so many choices out there, particularly in the digital arena, traditional media needs to step up and really prove their value, good or bad,” Ms. Campanella added.

But change still doesn’t come easily or instantly. Time Inc., the country’s biggest magazine publisher, guarantees most advertisers an average paid circulation across the issues in which they buy space; if you buy into five issues, the company promises those five issues will achieve a certain average paid circulation.

Pressure
Anything else would only hike costs for everyone, said John Squires, senior exec VP at Time Inc., because publishers would pump up print runs to make sure not one issue falls even a percentage point shy of its rate base. “They want all guarantees and all protections at all times,” he said of marketers and media buyers. “That just kind of forces a completely unrealistic expectation on our business. We do have to concentrate on some efficiencies.”

Publishers don’t get any reward when magazines sell more copies than guaranteed, Mr. Squires noted. And swings of 50,000 copies in newsstand sales at magazines that consistently sell millions can’t be the top challenge in marketing right now. “In these times, in this world, with the kind of competitive pressure that there is on publishers already and the intense pressure on rates, is this really a big issue?” he asked.

Ms. Steinberg said advertisers need protection against tactics publishers can use to meet average guarantees. A few titles have made up for shortfalls early in the standard six-month reporting periods by drastically increasing their use of copies — called “verified” by auditors — that are distributed in hair salons, doctors’ offices and so on. “Verified circulation was put forth with the notion that publishers would use and place these copies strategically and with transparency,” she said. “However, we believe the proper use is not taking place, and the current use is to make up for rate base underdelivery from newsstand decline.”

A challenge from Hachette
Hachette Filipacchi Media U.S., publisher of magazines such as Elle and Car and Driver, already has started selling its men’s enthusiast titles against issue-specific guarantees and is considering doing the same across its portfolio next year. But if Jack Kliger, president-CEO, is going to meet the buyers’ challenge, he has one of his own for them.

“Issue-specific circulation-based pricing, to me, is an interim step to issue-specific audience-circulation guarantees,” he said. That is to say, once the industry can better measure how many people see an issue, whether they borrow it from a friend or read a public-place copy, media buyers should drop this obsession with refining paid-circulation metrics. “It’s like trying to make the kerosene lamp produce more light because that’s what we’re familiar with,” Mr. Kliger said, “and don’t trust this newfangled electricity thing.”