Digital Publishing: New York Magazine Grabs Digital Ad Revenue - Scores Online Success

In the newly arrived digital age (really NOT so new, anymore) one of the great mysteries that has confronted magazines' digitization has been how to make money online --- A MUST for survival and transition from the sagging print editions.

Well, New York Magazine, once on the brink of failure itself, has solved this perplexing puzzle and should be a beacon of hope for other brethren of their competitive industry.

How did NYMag accomplish this? With intelligent foresight from a new, pioneering editor-in-chief AND a nimble business team that's equally adept at selling print and digital advertising.

Matthew Flamm, Crain's New York Business, takes us inside the minds and business decisions of the owners, managing staff and other players that not only rescued NYMag, but pushed it to the front of the pack:

Mags to riches

New York's Adam Moss is having his 'Approval Matrix' moment. The company's cashing in online. A publishing puzzle solved

To its groaning shelf of National Magazine Awards and bulging portfolio of stories extolling its business success, New York magazine can add one more credit: It's having its best year in a decade.

Both profits and revenue are the highest they've been since financier Bruce Wasserstein bought the barely profitable publication in late 2003 for $55 million and lured Adam Moss from The New York Times to become editor in chief. That move was among several that would make New York what it is now: a growth property at a time when much of the rest of the industry is struggling to hold its ground.

Observers also praise New York's owners for their willingness to invest for the long term and a nimble business team that's equally adept at selling print and digital advertising.

In addition, the magazine and website have racked up more National Magazine Awards since Mr. Moss' 2004 arrival than any other title during the same period.

The finishing touch has been an opportunistic approach to publishing, whether it's in print or online.

"We saw that we weren't just publishing a magazine, that we had a certain voice and way of looking at the world that could find expression in different products," Mr. Moss said. "Some would be distributed in print form and some digitally."

The editor in chief has gotten plenty of support from an A-list staff, including online Editorial Director Ben Williams, but veterans of the magazine cite Mr. Moss' vision as key to the company's success.
"He's got a really good balance between his own intense curiosities and a feel for what can resonate with a larger audience," said New York Times Magazine Editor in Chief Hugo Lindgren, who was Mr. Moss' longtime deputy at both the Times Magazine and New York.

Solving the mystery

Just as important, the company has solved the most pressing conundrum: how to make money online. Consumer magazines draw only about 5% to 15% of their ad sales from their digital operations, analysts and insiders say. New York's digital properties, by contrast, account for 40% of the company's total ad sales.

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Who Controls Social Media?

From outside the publisher's world, no one should control social media from my blurred point of view. Speaking just as an outsider (my specialty) and everyday web surfer, I like to think everything "internet" is open and free with no underbelly of strategic plotting behind every damn piece of content to "hook" me into doing something that I probably really don't want to do in the first place.

Just let social media develop naturally and be formed (and, yes, controlled...if there must be any control) by those visiting for their own enjoyment and seeking like-minded folks.

But, realizing that many things (if not all) on the web are free due to a secret source of monetization coming from some damn hidden place, I have to put on my magic pragmatic glasses and peer into the sucky-sucky world of internet control for money, money, money. You know, advertising and marketing...with actual content coming in last most of the time.

So, going undercover inside the publisher's world with my magic glasses, I found some interesting insights into this topic from Matt Kinsman, executive editor at FOLIO magazine...Insight further honed from his attendance at the MPA's (Magazine Publishers of America) Social Media conference yesterday:

For Publishers, Who Are the Gatekeepers of Social Media?
Who gets the keys to the engine, edit, sales or marketing?

Ten years ago, as the prospect of monetizing Web sites started becoming a reality for publishers, different departments butted heads over prime real estate: editorial wanted it for content; sales wanted it for advertising; marketing wanted it for promotion.

Today, as the emphasis shifts away from publishers serving their audience on their own Web domain into places that are daily destinations (such as Twitter and Facebook), publishers are again faced with the question of who controls what (and it's even more important today because social media offers the chance to directly engage with--or alienate--your audience).

That was a key debate at MPA's Social Media conference yesterday. "Should all stakeholders be given the capability to tweet?" asked Matthew Milner, vice president of social media at Hearst, and moderator of a session called Who Controls Social Media at Your Magazine Brand? "And is the ultimate stakeholder necessarily editorial, or marketing, or could it even be the technology department, which may ultimately own the cost of social media?"

For Time Inc., social media is very much an editorial enterprise (last fall, a survey by The Wrap found that five of the 10 magazines with the most Twitter followers were Time Inc. brands). The publisher even maintains a team dedicated to fine-tuning Twitter captions. "Social platforms can be remade in your own image," said Jim Frederick, managing editor of Time.com and executive editor of Time.

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E-Media Revenue Numbers - A Reality Check for Mags

Since the intro and explosion of digital media and publishing, how are the e-media revenues shaping up?

How are the profit margins changing?

What are the current realized earnings for small to large publishing firms now riding on the digital pony in the internet rodeo?

Well, for those who like charts and numbers (and interesting they are), I am presenting a great layout by Matt Kinsman, Executive Editor, at FOLIO magazine:

Digital is the priority for most publishers, yet many executives have had to re-adjust their e-media forecasts just as they did with more traditional revenue streams such as print and events. Online ad spending in the U.S. dropped 5 percent to $5.5 billion in the first quarter of 2009 and 7 percent to $6.2 billion in the second quarter, according to market analyst IDC.

Digital revenue remains relatively small, despite massive percentage growth in recent years (and massive slumps in traditional revenue streams). “Those who have been aggressively pursuing digital will likely see it between 8 percent and 15 percent of the overall revenue mix,” Deborah Esayian, co-president of Emmis Interactive told FOLIO: recently.



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Hearst's Digital Reach Grows

Advertising revenue for digital publications is taking off. And, subscription rates for online pubs is also climbing if Hearst's online magazine empire is any indication. The way they are able to tailor ads to specific targeted groups in different regions in the same issue is golden...

Amy Wicks, World Wide Digital, reports it this way:

GROWING REACH: With 26 sites and counting, Hearst Magazines Digital Media will launch a new vertical late next year that “is not one you’d expect from us,” noted Chuck Cordray, senior vice president and general manager. He added the URL already has been purchased but declined to provide more information. Next summer, the digital unit also will relaunch its teen network, which includes seventeen.com and teenmag.com.

And the digital space continues to attract new advertisers for Hearst, with ad revenue up more than 20 percent year-over-year. Cordray said the focus for next year will be on the retail category, which rose more than 50 percent this year. Cordray contended advertisers are coming to the Hearst digital network because, among other things, the package of sites on which the ads will appear can be customized depending on the audience a given brand wants to reach. “Ad networks usually can’t guarantee quality like we can, and they will alter placements across their sites,” Cordray said. “The nature of our content means the audience is very tailored.”

Meanwhile, the Web continues to be a greater source of subscriptions, with 3.3 million garnered this year versus 2.5 million in 2008. House Beautiful is one of the leaders, with more than 75 percent of subscriptions sold online.

Hearst magazine sites represent more than 40 percent of the total traffic in the digital network and 50 percent of its ad revenue. According to comScore for March through October, traffic across the total network was up 33 percent, including food site Delish.com. Traffic at Cosmopolitan was up 1 percent, Marie Claire was up 19 percent and Harper’s Bazaar was up 151 percent. Kaboodle, a nonmagazine site that focuses on fashion, was up 66 percent.