Four years ago, Hollywood trade pub Variety Magazine was aging and under threat.
A paywall pushed Variety.com’s traffic dip to fewer than 1 million uniques. A revamped Hollywood Reporter and industry blogs like The Wrap and Deadline.com created new competition for advertising dollars.
Its then-parent company, Reed Business Information, had stopped investing in Variety and finally sold it for $25 million to Penske Media, owner of Deadline.com, in 2012. With the magazine now owned by one of its digital competitors, change was swift.
The company shut down its daily print magazine and focused on the weekly publication. It took down the paywall and started investing in content, going for in-depth articles and an Economist-style take on the entertainment industry as competitors focused more on industry gossip.
Since the sale in 2012, Variety has increased print revenue by 10%, while industrywide it fell by a third. Digital advertising revenue has grown 367%.
Michelle Sobrino-Stearns, who has been with Variety for close to two decades, presided over the change and was promoted in April to group publisher and chief revenue officer, expanding her responsibilities to include Penske Media’s recently acquired IndieWire.com, which it bought in January.
Sobrino-Stearns talked to AdExchanger about how Variety turned itself around, how B2B media is changing to embrace native and Variety’s advertising growth as consumer brands seek to reach its highly influential audience.
AdExchanger: What kind of forces has Variety been reacting to that prompted its transformation?
MICHELLE SOBRINO-STEARNS: I was here for the launch of Variety.com. Print was king, and websites were an afterthought. The past 10 years Variety has been facing lot of sites born due to a lower cost structure [on the web] and capturing the dollars that Variety had – the Emmy business, the Oscar “For Your Consideration” dollars. A lot of folks were trying to capture the same dollars.
What have you done as publisher so far?
I have many challenges ahead of me. As publisher, at the end of the day I want to grow revenue and grow this brand. We are marketing to marketers, so we said, “Let’s make this brand beautiful.” That includes the print product and online. We’ve tripled the size of the newsroom. I doubled the business side. Our new CMO [Dea Lawrence, formerly of TubeMogul] comes from the tech world.
Variety took down its paywall in 2013. How are you approaching subscriber revenue vs. advertiser revenue?
Part of our strategy is not to give Variety away. We have invested a lot in the print edition in the past few years. Digitally, we want to grow our traffic numbers, but we want to be authentic in our approach: We’ve never deviated from the message of providing information for the entertainment community. We had the highest traffic in March of any of our competitors. Now we’ve introduced video, and that’s growing our numbers dramatically digitally.
What’s working on video?
We started investing in video over the past year, because we saw this massive growth. We put out these snackable video moments, like “Actors on Actors,” which is an A-list actor talking to an A-list actor, and they’ve gotten tons of sponsorship dollars. There is a massive appetite for great content.
What does social media mean to Variety?
We have 2.6 million users on social media, and 400,000 out of our 1 million Facebook followers are deeply engaged, meaning they are sharing content, not just liking it. The amount of social media that comes out of our events is tremendous, and that’s a big part of our strategy. We have a “Power of Women” franchise that gets 1 billion media impressions. It’s Variety’s largest franchise in digital, print and social. We are also attracting a lot of new users through social, which is fantastic, because we are a 111-year-old brand. Facebook is one of our largest referrers of traffic, and it has helped us grow our audience phenomenally.
How much advertising is from the film community, versus consumer brands that want to target a movie industry audience?
It depends on the season. With the Cannes Film Festival and Emmy season coming up, there will be a lot of studios, networks, film companies and streaming services that will advertise around the voting windows. Awards season runs from October to February, and that’s a long season where endemics are king.
But over the past one-and-a-half years, there has been a growth in premium brands like Ciroc and Mercedes and Blackberry that have purchased native campaigns around the season. They want to promote their video content and content that we’ve produced for them to target our audience.
How are you using data to target, say, voters during awards season?
We have a list of Academy voters that’s been gathered over the years. But there’s no publisher that can isolate just those users, because you’re breaking the rules of the Academy. We have a list of influencers around Academy season – these are filmmakers, industry executives and other voters – maybe they’re not an Academy voter, but a SAG [Screen Actors’ Guild] voter, so all those individuals we can target as a group. We also know that if you aren’t living and breathing the awards season, you’re not going to be interested in content like who just won the Critic’s Circle awards. We gather that information and know who is a voter or not.
How have disruptions in the entertainment industry, like the rise of Netflix and Hulu, affected Variety’s coverage and advertising business?
The film business is not what it used to be, I can assure you. Sadly, I think a lot of great independent companies have gone away. But in the past year, a lot of new independent companies have found success, and distributors and producers have come back into the marketplace – A24, or Bleecker Street. TV for us has exploded as a category, with new streaming services and content creators. Our TV coverage, which includes the Netflix, Amazon and Hulus all over the world, has doubled in terms of commitment to the space in editorial.
What’s changing about how buyers want to buy with you?
Print is pretty much the same: They want to reach the voters and influencers. Digitally, it’s completely changed. Brands have stepped up. Native advertising was something we sold years ago, but we’re starting to partner with really big brands. Also, tracking and reporting. Buyers didn’t ask us for that before, but now they want to see an ROI on what they sponsor.
Does being a B2B brand insulate you from some of the issues B2C media brands have to deal with?
When I started out here, being a B2B was limiting because brands wanted to be part of consumer-facing brands. That has completely changed. Our consumer revenue mix has seen a massive increase, including in digital. Brands have gotten smarter, that it’s not about mass reach, it’s about the right reach, and that’s where we’ve benefited. I can tell you definitively that we’ve reached entertainment enthusiasts and influencers. Brands are looking for that, because there is so much mystery around who audiences are, and if they’re authentic or not.
Speaking of audiences, how has programmatic affected your business?
We reach influencers, so when people are trying to reach influencers through programmatic, we can work with them and PMC [Penske Media Corporation] corporate to sell programmatically across all our brands. We will never do that around our strongest business cycles, because we sell out of inventory, and we don’t lead with programmatic, but we can hook up our pipes to any programmatic and allow them to access our first-party data.
This interview has been condensed and edited.
