Time Inc.’s CEO Aims to Unify Print and Online Fiefdoms
Time Inc. Chief Executive Officer Laura Lang, hired last year to revive the struggling magazine publisher, is forging a plan to unify its long-sparring online and print fiefdoms.
Lang wants to give customers the ability to advertise across all 21 of Time Inc.’s magazines, both on the Web and in print, potentially reaching an audience of 127 million people in one fell swoop. That’s a break from the previous strategy, where the company typically suggested doing marketing campaigns via specific brands -- say, the print edition of People or Time.
Time Inc., Time Warner Inc. (TWX)’s worst-performing division, is grappling with sluggish demand for advertising and a shift to the Internet, where ads command lower rates than traditional print campaigns. In the first half of this year, the publisher’s ad sales dropped 6 percent to $855 million from a year earlier, while subscription revenue fell 7 percent to $581 million.
“We just need to be wherever people are -- sometimes you need print, sometimes digital,” Lang, 56, said in an interview from her office in New York. “Advertisers I’ve met with have all said the same thing: ‘I love your print product, but find a way to let me do it with other channels.’”
Previous efforts to boost online-advertising revenue were hampered by a print staff that didn’t want to relinquish valuable contacts to a separate sales team, according to people familiar with the matter. Another complication: The websites of the magazines were once managed by AOL Inc. (AOL), which was spun off in 2009.
Many sales executives were schooled in traditional media and didn’t have expertise selling digital ads. That’s changing now, Lang said. “There’s training put in place,” she said.
Lang -- a former advertising executive who led Digitas, a digital-ad agency owned by Publicis Groupe SA (PUB) -- is appealing to advertisers accustomed to the approach taken by Google Inc. (GOOG) and Yahoo! Inc. (YHOO) The Internet companies entice customers by promising to reach a certain set of users, regardless of what specific websites they’re visiting. Likewise, Time Inc. wants advertisers to target demographics across their publications, rather than readers of individual magazines.
“We’ll now be able to deliver audiences like anyone else, but we also have the best content,” Lang said. “And very few can offer both.”
The strategy also involves linking Time Inc.’s editorial efforts more closely to its advertising sales. A consumer-goods company selling beauty or health products, for example, will now be able take fashion layouts from one of Time Inc.’s magazines such as InStyle and publish them in a Facebook (FB) Inc. news feed. Or it could post parts of the layout to its Twitter Inc. followers -- essentially purchasing use of the content.
“Our clients have been clamoring for that kind of content flexibility,” said George Janson, managing partner at WPP Plc (WPP)’s GroupM, which buys media space for advertisers. The popularity of Facebook and Twitter has created an incentive for advertisers to produce or purchase their own stories, something they often aren’t equipped to handle.
Any Time Inc. content shared this way would be branded as coming from the magazines, such as InStyle, Lang said. Articles also won’t be produced at the behest of advertisers, Lang said. Given the depth of Time Inc.’s editorial well, sales executives should be able to find articles or features relevant to any campaign, she said.
The company also plans to more aggressively market its tablet and smartphone readers to advertisers. While the publisher’s mobile audience is relatively small -- about 17.1 million people a month -- Lang plans to bolster those numbers via partnerships with other services.
Time Inc.’s stable of publications include some of the world’s best-known magazines, such as Sports Illustrated, Fortune and Entertainment Weekly. Still, Time Inc.’s annual sales and profit growth have trailed those of the parent company’s television and film operations since the AOL spinoff.
Bloomberg News and Bloomberg Businessweek compete with Time Inc.'s publications.
Time Inc. has historically functioned as a collection of feudal states, both in the editorial and sales departments. Sales managers would compete against ad executives from sister titles for the same account and power struggles between magazines were common, according to people with knowledge of the company’s operations.
Lang was hired by Time Warner CEO Jeff Bewkes last November to replace Jack Griffin, who had clashed with other executives. Griffin’s “leadership style and approach didn’t mesh with Time Inc. and Time Warner,” Bewkes said in a memo when Griffin left.
Lang’s collegial management style impressed Bewkes, who was in need of an executive who would bring a much-needed contrast to Griffin’s tumultuous tenure, according to two executives with direct knowledge of the matter.
She also has a consumer-products background, having worked at Pfizer Inc., Bristol-Myers Squibb Co. and Quaker Oats Co. She graduated from Tufts University and has an MBA from the University of Pennsylvania’s Wharton School of Business.
As part of Lang’s extended listening tour when she first joined the company, she met with Chief Revenue Officer Paul Caine, a Time Inc. veteran. He outlined some of his ideas, which eventually became the basis for the company’s new sales pitch.
“In the middle of our meeting I thought, ‘We should stop talking right now and go out and just do all this,’” Lang said. “Paul really is the architect of this strategy.”
Despite the emphasis on online advertising, the strategy doesn’t rely solely on the Internet to boost sales, Caine said.
“As the world’s largest publisher, it’s not about pivoting more digitally -- it’s about enhancing our overall businesses,” he said in an interview. “Print is still very critical.”
Time Inc.’s new audience approach comes at the right time, said Page Thompson, CEO of Omnicom Media Group North America, the media-services division of Omnicom Group. Making print advertising more flexible and tying it to the Web is key to helping it recover, he said.
“Print is starting to look more and more like digital, and that is the real savior to the print world,” Thompson said in an interview.
Other major publishers such as Hearst Corp., which owns Cosmopolitan and Marie Claire magazines, also are seeking ways to squeeze more revenue from digital media. Hearst Magazines President David Carey has focused on increasing sales of tablet magazine subscriptions, which now count close to 700,000 across all its titles, he said in an interview.
Carey has started to delve into e-commerce programs as well. The company recently unveiled ShopBazaar, a website that features apparel from the editorial pages of Harper’s Bazaar magazine. The publisher forged a partnership with Saks Inc. to sell the merchandise.
“We’re relaxing some of the long-held orthodoxies around content and commerce and what you can do,” he said. “There are a lot of opportunities in digital.”
At Time Inc., the company plans to capitalize on what many advertisers sees as its most valuable asset: its database of 65 million print subscribers. The publisher is combining its lists of online and offline readers to make it easier for advertisers to target consumers.
“That has been the missing link -- connecting the digital and offline databases,” Omnicom’s Thompson said.
Toyota Motor Corp. (7203), one of Time Inc.’s biggest advertisers, has signed on to test the new capabilities. The publisher’s readers are valuable targets, said Dionne Colvin, national media marketing manager for Toyota’s U.S. division.
“Time Inc.’s audience is sort of prequalified,” Colvin said. “It’s a great, robust database.”
“People are really excited about this here,” she said. “And we think the advertisers too.”
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