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Magazines Invest In Online Revenue
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Published: April 5, 2008
Magazine publishers have been snapping up small technology firms in hopes of offering a compelling menu of digital services to keep marketers from taking their ad dollars elsewhere on the Web. They are about to find out whether that strategy is working.
The latest example involves Conde Nast, which designed a shopping and social-networking promotion for the retailer Dillard's. The promotion, to kick off next week, uses tools from news-aggregation site Reddit, which Conde Nast bought in 2006. It lets visitors to Dillard's Web site vote on merchandise that later will be featured in online ads.
Usually when publishers acquire technology companies it's to spruce up their own Web sites, but increasingly publishers such as Conde Nast and Meredith are drawing on the technology to create advertising campaigns for marketers.
This takes publishers further into the realm of marketing services. Instead of simply selling ad space, they're rolling up their sleeves and designing the promotions as well.
For the next five months, visitors to the Dillard's Web site will be able to rank products featured in a top-10 list selected by Conde Nast's Lucky magazine and fashion Web site Style.com. The fashion lists will rotate seasonally, giving visitors the chance to rank new items every two weeks. The top-rated item on the list then will appear in Dillard's online ads running on nine Conde Nast Web sites, including Teen Vogue, Glamour, Style.com and Vanity Fair.
Conde Nast, owned by Advance Publications, isn't alone in trying to make this leap. Meredith, whose magazine titles include Better Homes & Gardens and Family Circle, bought three digital agencies during the past two years, including digital-ad agency Genex and word-of-mouth marketing firm New Media Strategies. Hearst, which publishes Cosmopolitan and Good Housekeeping, has also made a string of acquisitions, including social-shopping site Kaboodle and, most recently, a question-and-answer tool called Answerology.
"You try to best leverage the assets you control," says Richard Beckman, chief marketing officer of Conde Nast Publications. He is also president of Conde Nast Media Group, the publishing company's integrated-marketing unit, which does corporate sales and marketing for its magazines and Web sites, and creates ad campaigns.
Magazine publishers were slow to embrace the Web. Now that they have more of a presence online, they're finding it tough to draw enough traffic to compete for digital-ad dollars. Even the biggest magazine sites are miniscule compared with other online properties. Conde Nast's Wired, for instance, attracted 2.5 million unique U.S. visitors in February, compared with 14.5 million visitors to the top technology news site CNet, according to comScore Media Metrix.
Publishers hope the technology offerings will give them more traction. Hearst acquired Kaboodle in August to tap an area of e-commerce that combines social networking with shopping. Kaboodle is rolling out a feature for advertisers that makes it easier for consumers to highlight their favorite products. A promotion for Nordstrom's spring collection includes an "Add to Kaboodle button" in its ads on the Kaboodle site.
At Meredith, prior to its recent acquisitions, most of company's integrated-marketing unit specialized in traditional marketing. Now, half of the group works on digital projects for marketers. The acquired firms brought in their own clients, but also have started working with Meredith customers.
For the past couple of years, Meredith has published a "Plan Ahead, Get Ahead" custom magazine for Principal Financial Services. Genex, the digital marketing firm Meredith bought last year, now creates an online version of the magazine.
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