Bonnier Generates About 25% of Its Revenue From Digital
Although marketers continue to shift print budgets to digital media, most magazine companies still generate the bulk of their revenue from selling print ads. About 20% of Time Inc.'s ad revenue, for instance, comes from selling digital ads. But industrywide the shift from paper is underway, with digital ad revenue expected to overtake print by 2019 -- the result of both swelling digital budgets and shrinking print outlays, according to a recent PricewaterhouseCoopers report.
Bonnier, publisher of nearly three dozen special interest titles like Scuba Diving, Field & Stream, Savuer and Popular Science, is an active participant in the industry's transformation. The company, part of the Swedish media conglomerate Bonnier AB, generates about 25% of its revenue from digital, according to Eric Zinczenko, who was named Bonnier CEO this week.
Mr. Zinczenko -- brother of former Men's Health Editor-in-Chief David Zinczenko, who now runs his own editorial consultancy Galvanized -- succeeds David Freygang, who spent more than 25 years at Bonnier. In his new role, Mr. Zinczenko plans to accelerate the company's digital drive.
But the company is not preparing for a digital-only future -- at least not yet. Print remains important to Bonnier, according to Mr. Zinczenko. "We would prepare for a world without print if we had to, but we're approaching the future with all different channels of media to serve a particular audience," he said.
Mr. Zinczenko spoke with Ad Age about the company's digital future, acquisition strategy, new revenue streams and more. The conversation has been condensed and lightly edited.
Advertising Age: What does the future look like for Bonnier?
Eric Zinczenko: We're going to stay on our course of being in special-interest vertical media, but the future for Bonnier is absolutely pointed digital; my to-do list is to accelerate that move. That means aggregating more audience digitally; it means applying data science and increasing our targeting capabilities. That means higher CPMs for our clients. Over 50% of our traffic comes from mobile devices; I think we can be better prepared for that. Many of our sites have been oversold in video so we have to be more ambitious in producing our video content.
Ad Age: M&A activity among media companies is really heating up. A recent report by Mergermarket said mergers among media, tech and entertainment companies stood at $34.5 billion last year. Will Bonnier get in on the acquisition game, especially to help build up its digital audience?
Mr. Zinczenko: If the acquisition was right for Bonnier, we'd add a digital pure-play to our portfolio, for sure. However, I think we still have an opportunity to accelerate our own audience development.
Mr. Zinczenko: We couldn't agree on the price. MensFitness.com was highly attractive to us. The print was as well. But it came down to the price.
Ad Age: Do you have plans to open other sources of revenue beyond magazine sales and advertising?
Mr. Zinczenko: We've had tremendous success with our events portfolio. We have Field & Stream events; we have Working Mother conferences; we have off-shore fishing championships; we have consumer expos. These are all high-margin businesses. We have an opportunity to invest more there and potentially acquire smaller events businesses and aggregate them into our overall events business.
We also have to be more ambitious with licensing. We've had great success with Outdoor Life branded apparel at Sears. It's at 850 Sears stores. It's a multimillion dollar program for us. If we can replicate that across our other verticals, that's a real opportunity for our company.
Ad Age: Your parent company, Bonnier AB, is based in Stockholm. How many times do you make it there a year?
Mr. Zinczenko: In my previous role as executive vice president, it was at least four times per year. But now in my new role, I'm sure it'll be double that.
Ad Age: So how's your Swedish?
Mr. Zinczenko: It needs work.
Read about Ad Age's recent visit to the Saveur test kitchen.