Dow Jones' reorganization designed to offer more integrated options for advertisers

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Dow Jones & Co.’s recently announced plan to divide the company into three business units will enable b-to-b advertisers to create marketing campaigns that were not available under the previous operating structure, company executives said.

The reorganization, announced last Wednesday, is the first major move by new Dow Jones CEO Richard Zannino, who succeeded Peter Kann in January.

The overhaul combines the print and Web editions of The Wall Street Journal in a new Consumer Media Group. The unit also includes the financial news Web site MarketWatch, Barron’s and SmartMoney, which is a joint venture with Hearst Corp.

“When we approached the market in a different way, when print was suffering while online sales [surged], we may not have made it quite as easy for advertisers to understand the significant scale as well as high demographics of our audience,” said L. Gordon Crovitz, president of the Consumer Media Group and former head of the company’s electronic publishing operations. “What we need to do a better job of in this structure is to deliver all 14 million people of our audience to advertisers in more valuable ways. … [Ad sales] will now be based on who the customers are and will be channel neutral.”

As part of the reorganization, Crovitz said, Dow Jones Integrated Solutions will ramp up its efforts to train traditional print sales executives to market online sales and vice versa.

A second division created under the reorganization, the Enterprise Media Group, includes Dow Jones Newswires, Dow Jones Licensing Services, Dow Jones Indexes, Dow Jones Financial Information Services, Dow Jones Reprints & Permissions, and Factiva and Stoxx. The third division, the Community Media Group, includes Dow Jones’ portfolio of 15 daily and 19 weekly Ottaway community newspapers in nine states.

“This is the right structure for us now,” Zannino said. “I had a goal in the structure of not wanting to be more than one person away from all of the major functions and drivers in the company.”

For example, he said, “Judy Barry, who’s running the Journal’s ad sales [as senior VP-advertising sales and marketing], will report directly to Gordon. So she’s one level away. … This is a flatter structure, and there are no span breakers.”

Chuck Richards, VP-lead analyst at Outsell, said, “This should increase b-to-b marketers’ spend on DJ, but the change will be slow. All traditional publishers struggle with just the conversion of print sales teams to print and online and mobile, often having to resort to hiring new ad salespeople when re-training print display staffs doesn’t work out for large numbers.”

Richards added: “The design is very powerful. The devil will be in the details and execution, and willingness to experiment along the way will be critical for success. So b-to-b advertisers should expect to see many adjustments along the way.”

Dow Jones said the new structure would increase efficiency and accountability by reducing the layers of management and would cut costs by about $8 million per year, largely as a result of eliminating about 20 net positions.
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