Condé Nast Digital Ad Revenues Rise 38% Year Over Year

Digital media company Condé Nast, the publisher of more than a dozen titles including The New Yorker, Vogue and Vanity Fair, saw its year-over-year digital advertising revenues rise 38% in 2021, according to people with knowledge of the matter. The company attributes much of its recent success to its investment in digital video. Given the economic context of the time frame––digital advertising cratered in 2020, only to rebound to historic levels in 2021––such side-by-side comparisons will naturally be flattering. And the publishing portfolio, owned by the privately-held Advance Communications, declined to offer financial specifics. But the growth is part of a broader turnaround within Condé Nast. Long criticized for its faltering attempts at digital transformation, the publisher generated nearly $2 billion in overall revenue in 2021—and it turned a profit for the first time in years. “We were a magazine company for 100 years, but 2020 allowed us to really deepen our focus on the consumer and build that relationship with them, wherever they are,” said chief revenue officer Pamela Drucker Mann. “And now we’ve found that the more we meet the consumer, the more we’ve been able to meet the advertiser.” Condé Nast and Verizon Media Are Swapping Content for Ad Tech The advertising gains come after extensive internal restructuring, spearheaded by chief executive Roger Lynch, in an effort to streamline the sprawling, global media company into a digitally native operation. This initiative, combined with a series of emerging revenue drivers—such as digital video, commerce and digital subscriptions—has helped Condé Nast reverse its losses. The reinvention of the media company offers a potential blueprint for other legacy media operations hoping to accomplish a similar feat. Emphasizing video and the IP1P formula Although 2021 marked the return of Condé Nast to profitability, digital advertising revenues at the company have grown for five consecutive years, three of which––in 2018, 2019 and 2021––saw double-digit gains. The publisher attributes much of this success to its investment in digital video, the primary area of focus for the publisher and its fastest-growing revenue driver by source, according to Drucker Mann. Condé Nast hired Agnes Chu in September 2020 from Disney+, placing the streaming veteran in charge of leading Condé Nast Entertainment—a move that signaled the intent of the company to transform its intellectual property into original video content. They're looking for us to invest with them almost like a TV partner.Dan Thomann, vp, group media director at Mediahub This emphasis has influenced how it pitches marketers, said Dan Thomann, vp, group media director at Mediahub. Rather than sell against one moment, Condé Nast shares its content schedule for the full year––the publisher calls this document the Cultural Calendar––a practice that resembles how television inventory is sold and allows it to block out competitors. “They're really positioning the Cultural Calendar as if it were akin to a broadcast network,” Thomann said. “They're looking for us to invest with them almost like a TV partner.” Internally, the publisher refers to this as part of its IP1P strategy, Drucker Mann told Adweek. The phrase, short for first-party, intellectual property, reflects the focus Condé Nast has placed on its first-party relationship with readers––and the unique content it creates, including archival material and video. As the digital privacy landscape changes, publishers with large, identifiable audiences will likely benefit from a shifting power dynamic in the media ecosystem. Condé Nast, which reaches 350 million readers monthly, excluding China, according to the company, has positioned itself to turn that audience into a key draw for marketers. It aims to combine those relationships with its distinct cultural authority, evidenced in events like Vogue’s coverage of the Met Gala and Vanity Fair’s access at the Oscars, to create touchpoints for marketers unavailable anywhere else. Diversifying revenue streams As part of its internal realignment, Condé Nast aimed to prioritize digital advertising while simultaneously diversifying away from it. By implementing paywalls across a handful of its sites, Condé Nast has seen consumer revenue from subscriptions increase 15% year over year. Its commerce operation, which generates revenue primarily through affiliate links, saw a revenue increase of 46%, while advertising against its events––a small but growing division for the company, per Drucker Mann––saw revenues rise 54%. To make the organization more digitally minded, Condé Nast began hiring talent from tech companies, such as its global head of revenue operations Deborah Brett, poached from Viacom. It also restructured its sales team to center around digital advertising and trained staff to sell Condé Nast the platform, rather than employ a brand-by-brand approach, Drucker Mann said. The publisher now generates 70% of its advertising revenue from digital channels. In addition to making its business-development efforts more future-facing, the moves also trim operational costs—a linchpin of its return to profitability, said Ava Seave, a principal at Quantum Media. “As far as business is concerned, the thing [Condé Nast] cares about most is making this digital transition—and a key part of making the transition is cutting down their cost structure,” Seave said. “They used to have fiefdoms filled with redundancies and they are trying to eliminate those.” As Commerce Revenue Jumps, Condé Nast Pitches New Shoppable Shows

Publishing News

Condé Nast Digital Ad Revenues Rise 38% Year Over Year

The publisher turned a profit in 2021 after years of losses

Mark Stenberg

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Mark Stenberg