Two weeks ago we spoke to Dennis Publishing’s CTO Paul Lomax about the issues facing digital advertising, how the internet inherently favours a Big Two in advertising and whether digital display advertising will ever be a healthy proposition for publishers. This week, his fellow panelist for Digital Media Strategies ’17’s diversified revenues session Duncan Chater explained where Hearst Magazines UK is expecting to see digital revenue growth.
Chater, who is chief revenue officer for the magazine group, began by elucidating on why media companies with strong brands are weathering the digital advertising squall better than most. He believes that publishers who have maintained the quality of their brands over the past few years have an advantage that it would be difficult for a competitor to replicate:
“Invariably the common thread for me is that brands want to engage with us for us, it’s all about our content. A lot of brands see us as content experts and audience experts and they want to tap into that insight and our ability to produce really engaging content for our audiences.”
The trick, obviously, is how publishers port their content across into new mediums in a way that maintains the quality of the brand. Every time a publisher begins pushing its content on Instagram, for instance, it cannot rely on the brand recognition that it has in print and is up against a brand new batch of competitors all out for the same ad spend.
Chater believes that, while that is a challenge, a savvy digital sales team can overcome those challenges, particularly when equipped with the appropriate tools:
“[Our] digital team are across everything. We have a team of 12 that is specifically focused on digital expertise and digital experts within agencies and clients.
“So we’re quite far ahead of our competition, we’ve invested really heavily in a digital platform called MediaOS globally. What’s really clever about that platform and what we’re doing is that it enables us to track live trends in content viewing across multiple different sectors.”
New opportunities in advertising
The real strength of a company like Hearst’s, though, is that its brands’ relationships with audiences enable it to experiment with new types of advertising. Cosmopolitan’s Influencer Network, launched late last year, is an attempt to tap into the burgeoning influence advertising market. With an increasing amount of ad spend bypassing publishers and going straight to Instagram and YouTube stars directly, a place at that table is an enticing one. Chater explains:
“What we know from case studies that Magnetic have done… when you pair an influencer with a trusted media brand, the engagement levels increase by about six times, so we know that when brands are working with influencers if they also bring us into that conversation we can really significantly improve the quality of their campaign by adding our trusted brand to that.
“What we wanted to do with Cosmopolitan is build up a network of influencers that we felt comfortable with, so we go through a really rigorous process of making sure that they stand for what we stand for.”
It’s that process of vetting the influencers, of making sure that they’re safe for association with a brand, that Hearst sees as its way into that new ecosystem. It’s that, plus the multiplying factor of association with Cosmopolitan, which Hearst is betting on as the reason brands will see the magazine company as essential for reaching audiences via advertisers. Chater explains:
“Once you get one of our brands involved the engagement levels increase by six times. That’s the clear messaging we need to give those brands. Also I think what we add to that is we add a different layer of media mix. When you’re working with influencers that’s a very vertical, narrow approach. What we offer them is some reassurance that you’re getting real value for money on a regular basis alongside that engagement multiple of six times. In most cases we’ve got ongoing relationships with most of the brands in that space.”
That ongoing relationship with a brand is also essential to another of Hearst’s new revenue-generating strategies: experiential events. With an ever-increasing amount of ad-spend going to live events, there’s every reason for beleaguered publishers to begin hosting their own events. Chater believes that the reason for the success of its experiential events so far is the same reason advertisers are attracted to the brand as a whole – its expertise in creating the content its audiences look for:
“Our experiential business has been doubling in size for about the last three years in terms of both the resource that we’re putting towards it but also the revenue that’s outputted from that division.
“The brands are interested in it because consumers are.”
Building for the future
Ultimately, with forecasts that ad spend even on premium print products is set to decrease, and that growth in digital audiences will not necessarily translate to digital revenue, media companies need to double down on any new endeavour that will benefit them. Chater says, for Hearst, that means listening to the expertise of its editorial team and building on working projects or acquiring new businesses to grow that side of the business:
“What magazines have this really unique position where our editors have access to pretty much what’s happening in the future in so many different industries.
“It gives us an interesting insight into what potential consumer trends are going to be happening and what’s going to be big in the future that very few businesses actually are able to predict.”
Duncan Chater will be speaking at Digital Media Strategies ’17 in February on the topic of diversification of revenue. For more information or to secure your place, click here.