"I think this will be an enormous business for us someday." -- Steven T. Florio, president of Conde Nast, on the CondeNet web operation established in 1995
NEW YORK (AdAge.com) -- On the list of magazine publishers that have built big businesses online, Conde Nast Publications ranks pretty low. About 3% of its ad revenue came from digital last year, a proportion topped by nearly every rival, public or private. And that's been fine by Conde, especially while it was busy minting money at print glossies such as Glamour, Vogue and Vanity Fair.
Digital, you say? "We really haven't put a lot of effort against it, if you're just simply honest," said Conde Nast President-CEO Charles H. Townsend.
But now Conde is taking a new swing at this digital thing, starting by eliminating the 13-year-old CondeNet. Its functions, which include selling ad space on sites such as Style.com, as well as most of the magazines' companion sites, will be consolidated with other pockets of digital activity at Conde, such as Brides.com and Portfolio magazine's digital operation. Sarah Chubb, president of CondeNet since 1996, will lead the successor unit, Conde Nast Digital, with the benefit of a promotion making her just the fourth group publisher at Conde Nast.
It's not obvious whether the new structure will help Conde make more money online. The company has made changes before. It only fully absorbed CondeNet, which had been a unit of Conde's parent company, Advance Publications, in 2005. The next year it moved the magazine sites' production chores from CondeNet to the magazines themselves.
Some things also stay the same. Conde Nast Digital will handle day-to-day contact with digital advertisers, but the Conde Nast Media Group retains the lead on most relationships. The magazines' high-powered publishers aren't getting any new incentives to sell digital. And everyone remembers that print still brings in almost all the revenue; digital absorbed at least its fair share of staff cuts that concluded 2008.
But Conde Nast executives point to the recession to explain why it's finally found religion. "This economic experience that we are going through has sobered us up considerably," Mr. Townsend said. "To get back to double-digit growth, we have to put our digital assets to work hard. I am hoping that the print business will recover to double-digit growth, but I am convinced that the digital business will grow exponentially."
An executive at one major advertiser said the consolidation and new emphasis could only help Conde sell digital. "They're actually, of all the publishing companies, getting the least amount of digital money from us," the executive said. "They don't really push it in meetings in the way that publishers do at other publishers. Maybe that's because they've got that separate digital group over there."
But a lot will depend on the marketer at the table, a media buyer said. "For the advertiser, this will help streamline the conversation to get the deals done in a more timely basis -- one-stop shopping vs. multiple contact points," said Robin Steinberg, senior VP-director of print investment and activation at MediaVest. "However, for some clients they do not provide enough scale, come at a premium price and still need to deliver higher on performance metrics."
For advertisers looking to go big, Conde Nast Digital marketing materials will promote its 27 online brands' 52 million monthly visitors. That traffic figure, of course, comes from the publisher. Outside efforts to gauge traffic anywhere on the web invariably produce far smaller counts. Most Conde sites, for example, don't attract enough people for Nielsen Online to track.
Only 11 of the company's sites surpassed the Nielsen threshold last month: Wired News, Epicurious, Reddit, Portfolio, Ars Technica, Glamour, Concierge, Vanity Fair, Men.Style.com, The New Yorker and Teen Vogue. Wired News attracted the most people, nearly 4 million, up 50% from December 2007, Nielsen said. Epicurious came next with 3.3 million visitors, although that represented a 22% decline from the prior December.
However you measure their popularity, Conde believes selling sites together will prove most compelling. "The problem with Gourmet.com is, even as much as we love it in and of itself by itself, it's relatively insignificant," Mr. Townsend said. "This is a respectable site, but competitively -- against Epicurious, for example, any of the really big sites -- Gourmet.com sold by Conde Nast Digital is going to be part of a package."
That's part of the reason individual publishers aren't getting pressed to post more digital revenue, Mr. Townsend said. "The real income associated with digital revenue is insufficient to substantiate pulling the publisher of Gourmet off the mission of generating print revenue," he said.