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In order to work more effectively with advertisers, Hearst Magazines, parent to editorial titles including Cosmopolitan and Esquire, plans to reorganize its internal sales structure around industry categories by the end of the first quarter.
The move will shift the sales and marketing staff away from their current title-centric model to better support the objectives of its advertising clients. The company said that it already successfully operates using this structure outside of the U.S.
Hearst Magazines currently operates as a hybrid model, bucketing its brands into groups by subject matter, but the new structure will prioritize the industry of the advertiser.
All sales and marketing personnel will now be slotted into one of five categories: fashion/luxury; beauty/wellness and retail; home and design; food and pharmaceuticals; and travel, tech, finance, and outdoor.
“We are setting ourselves up for the next few decades,” said evp and global chief revenue officer Lisa Ryan Howard. “This is about unlocking innovation, prioritizing digital and being as easy to work with for our clients as we possibly can.”
Howard arrived at the decision after a three-month period of evaluating the business and soliciting feedback from advertising partners, who overwhelmingly asked for greater capabilities around data and targeting. She joined Hearst Magazines in October, following a nearly seven-year stint at The New York Times, which also employs an industry-centric model.
Amid a challenging digital ad market, the move could help Hearst Magazines tap into new budgets, as the buy-side has come to expect an industry-centric model from publishers and tech platforms, said Mediahub media director Lauren Wetmore.
“I was surprised that [Hearst Magazines] had not moved to this model sooner,” Wetmore said. “It makes more sense for a seller to focus on a category rather than region or magazine. It allows for greater digital opportunity from a data and targeting standpoint.”
Prioritizing categories and data
Each new category will operate according to a hub-and-spoke structure, with a dedicated sales and marketing team at the core, surrounded by a support staff of creative marketing, brand marketing, media strategy, ad operations and analytics professionals. The categories are staffed to reflect the volume of revenue they drive, with the lifestyle groups owning the largest head count.
Orienting the sales process around industries can present its own set of challenges, said Adam Ryan, chief executive of Workweek, such as when a potential ad partner crosses categories. Veteran sales staff could also be reluctant to jeopardize long-standing client relationships.
The shuffle has led to layoffs of roughly 1% of total head count, according to a company spokesperson, including the departure of longtime publisher Carol Smith, who oversaw commercial operations at Elle, Harper’s Bazaar and Marie Claire.
When sales teams operate by category … they are living and breathing that subject matter all day, so they bring a higher level of expertise to the conversation.
Lauren Wetmore, media director, Mediahub
But the reorganization has also led to the creation of several new roles, currently unfilled, including a senior ad product position and others related to data and analytics. The decision was not spurred by cost-cutting pressures, said Howard.
Instead, by restructuring by category, Howard hopes to provide her sales and marketing staff with the leeway to guide a potential advertiser through all the possible products and packages that might suit them based on their objectives, rather than shoehorn a brand into working with a particular title.
“We have 26 brands, and some are more than a century old,” Howard said. “So we had to ask ourselves, ‘How do we organize ourselves around our clients’ businesses so that we can sit in front of them and be solutions-oriented? How can we be less about our specific brands and more about the whole world that we can unlock for them?’”
The reorganization also aims to position Hearst Magazines to transition more seamlessly toward a digital advertising future. The pod structure will let data and analytics staff more effectively craft custom packages, optimize ongoing campaigns and provide retroactive analysis.
“When sales teams operate by category…they are living and breathing that subject matter all day, so they bring a higher level of expertise to the conversation,” Wetmore said.
Sales staff will undergo training to develop their fluency in every publisher and ad offering included in their category, ranging from data-driven performance products to brand-based packages.
While the format requires a wider scope of expertise from sales personnel, it can also unlock more revenue, which translates into greater take-home pay for the staff, according to Ryan.
“When a seller can strategically sell into a specific category, they can understand industry acquisition costs, competitor strategy and large initiatives throughout the year,” Ryan said. “This strategic relationship allows sellers to build larger campaigns and ultimately carry larger quotas.”