How Hearst Magazines Leverages Its Scale and Innovation to Drive Consumer Value

Leading digital publishing executives united to discuss industry-wide technology challenges at the 2019 FUSE Media Summit in November. Sheel Shah, VP of strategic partnerships and consumer products at Hearst Magazines, kicked off the event with a keynote addressing how platforms disrupted the traditional media model – and how Hearst is using the reach of platforms to extract audience insights for consumer product development. Shah began by overviewing the Internet’s fundamental impact on the business of legacy publishers like Hearst. Before the Internet, “companies like ours were able to package up the editorial and the advertising and put it into a curated product that we owned and operated the distribution channel for,” he says. “Consumers really valued that.” The Internet eliminated the competitive advantage of distribution, as well as opened the door for digital media natives like Vice, Group Nine, and BuzzFeed (where Shah worked prior to joining Hearst in 2016). “Another phenomenon that happened during that time was that the attention moved from media companies to social platforms,” says Shah. “If that attention is going to be spent with the platforms, then they get to create the consumer experience. They get to own the consumer, own the consumer data, as well as build an ads business.” Thus, content distributors became competitors. As publishers well know by now, the duopoly of Facebook and Google gobbles up most of the digital ad spend, along with other Big Tech companies like Amazon and Microsoft. While a publisher’s initial instinct may be to pull content off platforms or to charge the platforms for premium content, Shah views platform distribution as both a necessity and a big opportunity. “We have visibility into what people are watching on YouTube, what people are saying inside of our polls on Instagram, and how much time they are spending with us on particular articles versus other articles,” he says. “One of the ways I think we can use data like that is to develop consumer products and drive our consumer marketing strategy.” Below are key points from Shah’s session at FUSE, plus examples of data-driven consumer products developed within Hearst. “We have great brands, we have tons of influence, and people trust us; I don't think many people really trust platforms.” Shah emphasized the respect and authority garnered by magazine media brands like Hearst’s ELLE, Esquire, Cosmopolitan, Good Housekeeping, and others. This authority uniquely positions publishers to create premium digital content and physical products (e.g., books and branded merchandise) that platforms won’t create themselves. “We can find different ways to engage with people and create value for them, and at the end of the day we are businesses, so we'll find ways to monetize them as well," he says. By gleaning audience insights from platforms and then sharing those insights internally, media companies equip employees to put customer needs first. It’s important, however, for teams to be mindful of how each decision or piece of content impacts the business, Shah says. “There has to be some type of purpose to everything we create.” Whenever creating editorial content, the Hearst team will ask, why are we creating this? “Is it to learn something new? Is it for somebody to want to buy something? Is it to drive a click to go somewhere else?" Shah suggests. "We need to know that purpose before we go into actually creating it." Shah used a Women’s Health initiative to demonstrate how the team applied this line of questioning. Hearst recognized strong audience interest in yoga content, so the editorial team decided to create more of it. But before doing so, they had to understand the purpose that content would serve: In this case, “their purpose of creating is to learn more about the customer need,” says Shah. Next, Women’s Health distributed the content across a variety of platforms, using the brand’s massive social reach to learn why people are consuming so much yoga content. On their website, they leveraged Hearst’s Instant Insights polling technology to directly ask readers for their input and opinions on yoga-related topics. While collecting qualitative data, the team learned that people thought most yoga mats were too thin and not sticky enough to prevent slipping during hot yoga classes, says Shah. These audience insights led Hearst to develop its own yoga mat called Backslash Fit, and to sell it directly to consumers. In addition to being thicker and more 'grippy,' the $89.99 mat also incorporates a snap bracelet so it can roll itself. Customer feedback was positive, says Shah, and the brand later returned to its audience to ask for their mat color preferences via an Instagram Stories poll. As a result, Hearst put a charcoal-colored mat on the market just in time for the 2019 holiday season. “You need to find ways of creating consumer value that drive consumer revenue.” Shah provided two other examples of how Hearst has used data collected through content to develop new consumer products that benefit both the business and brand fans. Food brand Delish leaned into creating more keto diet content in 2018 because it was attracting a growing number of visitors to the site. Delish pushed its keto content out to followers on social to get real-time feedback from those who engaged with it. The team learned that consumers valued not only keto recipes, but also tips and information that made adhering to the diet easier. “We knew that grocery shopping while being on keto was a pretty tough thing to do, and we also knew that while being on this diet, you need to have your meals planned out,” says Shah. “Additionally, keto is a low-carb diet.” With these pain points in mind, Delish editors created the Keto for Carb Lovers book, which includes a 21-day meal plan, grocery lists, meal-prep tips, and recipes. Hearst sold roughly 25,000 copies of the book direct-to-consumer in the last eight months, says Shah. (The book released in January 2019.) Lastly, Shah shared how Hearst’s fitness-focused brands are seeking to take back control of their video audiences through a subscription on-demand service called All/Out Studio, launched in July. Before creating the owned OTT platform, Hearst’s Enthusiast Group – including Runner’s World, Men’s Health, and Bicycling – surveyed about 5,000 audience members and learned that their consumers prioritize guided experiences and variety in their workouts. “A lot of people watch fitness videos on YouTube,” and Hearst brands do make some of their videos available on these platforms, says Shah. “But as much as people like watching these one-off videos, they want somebody to take them from beginning to end for a particular result.” https://www.instagram.com/p/B3K8aOlBvUV/ For a launch price of $9/month or $60/year, All/Out Studio subscribers can choose from more than 150 training programs and stream workout videos led by certified trainers via connected TV or mobile app. “This is not to say that putting a fitness video on YouTube for Women's Health is a bad idea – that’s advertising-driven and that's fine,” says Shah. “But if we're going to package all of this stuff up and put it into a platform and create this service for somebody, that exclusivity, that credibility, that type of curation is something that we want to get back to. This reminds me of the golden years model where we own the content, we own distribution, and we own the customer.” “Serve your customers until you die.” While advertising dollars are still critical to any modern media company’s revenue mix, Shah closed his keynote with a reminder that “advertisers care about your consumer businesses, but consumers don't care about your advertising businesses.” In short: By better serving customers, media companies also better serve (and attract) advertisers. Platforms still help brands extend the reach of their content and collect more data on their consumers, and so those platforms remain important factors in publishers’ business strategies, Shah summarized. “What you do with that data is really up to you,” he says. “You can build a variety of different businesses off of that. Leverage that data signal to create valuable products. But first and foremost, you have to serve your customers until you die.”

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How Hearst Magazines Leverages Its Scale and Innovation to Drive Consumer Value

Leah Wynalek

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