Forbes.com CEO Jim Spanfeller Leaving to Start Own Firm
NEW YORK (AdAge.com) -- Forbes.com President-CEO Jim Spanfeller is leaving after nine years running the site, Forbes has confirmed after a leaked memo about it appeared on Daily Finance. It's another startling shift for the major business media, coming soon after McGraw-Hill said it's exploring a sale of BusinessWeek.
Mr. Spanfeller's next move includes a plan to start his own media-management firm, which will take control of and stakes in struggling websites from traditional media companies, rebuild them into moneymaking enterprises and then sell those stakes back to the media companies.
In an Ad Age exit interview, the high-profile executive, who's sticking around at least through Labor Day, explained why he thinks media companies might want to hand their sites over to him; why oversupply isn't the biggest reason online ad rates are so low; what he thinks will happen to business magazines next; and why articles about nude beaches aren't the key to Forbes.com's traffic.
Ad Age: Why leave to start a media-management company now?
Mr. Spanfeller: The idea of the media-management company is to go to traditional companies who have not figured out their fulsome digital strategy and basically say, "I'll take your business and I'll run it for some period of time, two years or three years, after which you can take back the ownership my company has in this, which will be minority, at a preset multiple." Presumably the reason they gave it to me in the first place is it was worth little or nothing, and presumably they'll take it back because it's worth more. Not only do I give them back the company, but I give it back to them with management fully in place, running smoothly, and say, "Here's the keys to the car."
That helps put into context why now. Because on the one hand, I've really enjoyed being here, but this is not an idea that's going to be viable for years and years to come.
My theory is you're either going to get through the digital transition or not. If you get stuck in an analog model in a digital world, you're going to be really pressed. So I don't know that it would make sense for me to hold on to wait and do this. I've been thinking about this for six months or so.
The other side of that, to be honest about the situation here, is that while I think the integration of online and offline is the right thing for the company, it was never something I was particularly interested in. When I came to Forbes.com, I made a conscious decision to move to the digital side of the business and away from the print side. So getting back into the print side years later wasn't personally satisfying. Not that there was anything wrong strategically; it just wasn't a great fit for me personally.
Ad Age: Was Elevation Partners, which has a big stake in Forbes, unhappy with the pace of monetizing the site?
Mr. Spanfeller: Not that I'm aware of. Unless Elevation has some kind of mind machine that can place the idea in someone's head to do something, I don't think they had much to do with this.
Ad Age: But the site isn't being monetized the way anyone hoped, is it?
Mr. Spanfeller: No, it's not. There's a little thing called the recession out there.
Ad Age: What did you learn over the long arc of your time at Forbes?
Mr. Spanfeller: Brands certainly will migrate to different mediums. But in doing that migration, you've got to be appropriate for the medium and appropriate for the brand. Usually what happens is the legacy media brand is so set in its ways that it has a really hard time making the turn to whatever the new medium is. You have to understand the medium that you're moving into. In this case, it's the web. It's 24/7, multimedia, interactive and incredibly linked. There's definitely a sense of the ecosystem that's much more linked than any other media.
Ad Age: What about the knock on traffic quality at Forbes.com, that a lot of its big traffic numbers come from visitors who aren't quite C-suite executives but people from the great unwashed web trying to look at the Forbes list of best nude beaches?
Mr. Spanfeller: We are as audited as any of the sites in our competitive space. The numbers are the numbers, and the traffic is generated in an appropriate fashion. The other folks who are upset because they can't generate those numbers should just be quiet and do their jobs better.
In one respect, there is some truth in the notion that we will have a wide aperture on some of our stories. We publish around 5,000 stories a day -- we don't write all the stories, but they move through the site. The percentage of stories that are "Most Expensive Islands" are microscopically small. If there's two out of 5,000 a day, that would be a lot.
The notion is you're allowing the site to be sampled by a wide group of individuals. There will certainly be some people who will come to the site; say, "It's not for me"; and not come back. That's OK; it's like any product sampling.
But the number of people who actually get to the site and are not appropriate folks for the site is very, very small. The reason for that is media brands are natural filters. As soon as you put "Forbes" next to any story, it automatically works as a filter. It's not 100%, but it's a fairly high percent.
We've probably made a few mistakes in the past 10 years in terms of stories that were too far outside the brand, but those are few and far between.
Ad Age: What's the future for business-magazine brands?
Mr. Spanfeller: Offline those brands have an opportunity to be around for some time, but they'll be smaller and smaller offline, while online they can be bigger and bigger. Anything you lose offline can be more than made up online.
Ad Age: But ad rates are so much lower online than in print.
Mr. Spanfeller: A lot of that is just holding firm. This whole idea that oversupply has driven down pricing is ridiculous. What's driven down pricing is that we as an industry have been shortsighted and haven't thought about the revenue model. There is limitless supply in newspapers, magazines, for all intents and purposes, and in radio and cable. The only place there's scarcity is network TV. They're all holding a line. I'm not sure they're holding the line, but they're holding a line.
If you think about your website as an appendage as opposed to your future, you'll be a lot more cavalier about your future.