Condé Nast enjoyed a 3.3% growth in ad pages last quarter, according to the Publishers Information Bureau. While modest, this was the company's highest Q1 ad page gain – typically a weak ad quarter following the heavy holiday spending period – in five years.
Condé Nast Chief Revenue Officer Lou Cona and VP of Corporate Partnerships Josh Stinchcomb noted that digital revenues climbed 35% compared to last year, thanks in part to new targeting capabilities and an expansion of Condé's private exchange to embrace more valuable inventory.
Stinchcomb says, "We're now working on the first of what we call 'private deals,' where our clients would be able to use our programmatic buying tools to buy a whole host of inventory, including premium inventory."
Cona and Stinchcomb spoke with AdExchanger about the broadening of Condé's programmatic strategy and how print is both supporting and benefiting from online gains.
AdExchanger: What accounted for the strong print ad sales growth? Was there any particular change in strategy? Or was it more gradual?
LOU CONA: We've had a strong first quarter. We reorganized about 18 months ago. We made ourselves easier to buy and also began emphasizing cross-channel buys; we don't believe in silos or walling ourselves off. Our integrated marketing business is up 50% over last year. Our endemic business – which is driven by luxury, beauty and fashion – has done incredibly well, as has our non-endemic business. Automotive, for example, is up 30%. Food and beverage are up almost 70% from a year ago, and technology ad spending is up almost 200%. As clients go narrower and deeper, the focus on consumers who are "influencers" makes us a better bet for advertisers. Given what's happened in the first quarter, we're poised for a very good year.
We reorganized about 18 months ago. We made ourselves easy to buy, we have our integrated marketing business – 50% over last year – our endemic business, luxury, beauty fashion, top 20 accounts. In the meantime, our non-endemic business, food and tech, has been solid across the board, primarily by focusing on influentials in each category.
What specifically made the difference?
LC: When we reorganized 18 months ago, it wasn't just about selling advertising. We worked hard to move our approach from strictly transactional to something more like a strategic partnership. We typically lead with a solution now, as opposed to just connecting advertisers and placements. Putting greater emphasis on integrated marketing means – in addition to advertising – marketing for in-store or custom work on tablets or digital.
What's the role of digital now in ad sales?
JOSH STINCHCOMB: Most of the big programs we do are multi-platform. A lot of the creativity and concepts are digitally native and then get built out. We're up over 35% for digital Q1. The tablet and mobile web are driving the accelerated growth we're seeing in digital. But it's also being fed by print; there's no cannibalization – just the opposite. As Lou said, clients are looking for holistic solutions that necessarily require print and digital.
LC: Clients want to follow the conversation. We want consumers to access our content wherever and whenever they want. One reason there's no cannibalization is that there's very little duplication of audiences across our platforms. Between web and print, there's about 15% duplication. In that sense, the web is almost completely additive to print. Sometimes a digital buy will turn into a print buy.
Is mobile delivering substantive revenue?
JS: There's still a delta between the time spent and where advertisers are putting their dollars both across the industry and within Condé Nast. But there's been a lot of advancement in the last 12 months when it comes to ad standardization. That has made a difference. More than that, our clients have invested in their mobile marketing environments. That's made them more keen to advertise on mobile devices. There are things going on industry-wide that are closing that gap.
LC: Having so many connected consumers and so much research and data gives us a leg up as clients turn to us for solutions there.
What is Condé's approach to programmatic ad sales? A number of other publishers have been embracing private exchanges as a way to manage media buyer demand for buying via trading desks.
JS: We've been in the space for close to two years now. We were one of the first in our space to experience programmatic buying by setting up a private exchange with [Google's] AdMeld. We primarily used it as a way for our clients to bid on our remnant inventory.
We're now working on the first of what we call "private deals," where our clients would be able to use our programmatic buying tools to buy a whole host of inventory, including premium inventory. It will still have the same level of pricing and floor controls. But we also recognize that clients increasingly want to automate the buying of banners, though they don't just want it as an environment for remnant or strictly for real-time. We're working with a few clients now and we'll be expanding that over the next few months.
As you place more premium inventory into the private exchange setting, how do you manage channel conflict with direct sales?
JS: The pricing controls get better all the time. We're able to create many different levels of visibility and pricing. If we can create price parity between our programmatic buying and our direct buying, it means we're much easier to work with, from a buyer perspective. Clients want to work with publishers in different ways and at different times. The more places we can satisfy that demand, the better it is for everyone.
How does Condé take advantage of its first-party data?
JS: We've been doing a lot of work to take advantage of this trove of first-party data. Publishing companies, just by virtue of having mailed magazines to consumers for decades, have an amazing array of depth when it comes to first-party data. We know our customers by name and we know a lot about their profiles. And we're starting to do some interesting things on the digital side as it relates to that data. About a month ago, we launched our "catalyst segment," which consisted of custom, premium slices of influential business readers that we built offline and poured into an online advertising offering. We've created a targetable segment that is not just aimed at our sites but can be used by clients as a jumping-off point to capture these users across the wider web.
Another great example is our ability to target moms. We don't have a parenting site, but we know we have a lot of really valuable moms coming to our site, so now, with the ability to identify them with precision, we can address some of that advertiser demand that may not have been the most natural or obvious fit before.
What is the view of native advertising for digital? Certainly, advertorials have been around for as long as modern magazines and newspapers have. But is there anything particularly new that Condé is doing in this area?
JS: We have a suite of products that can easily deliver content experiences via advertising, whether that's through text, video or slideshows. We have "blog-vatorial" types of units as well. Advertisers are creating a lot of content on their own these days, and we look on that as an opportunity. In many cases, we're helping them create that content. They want to be storytellers; they want to connect with consumers in a way richer than traditional marketing.
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