Lessons Learned From Five Media Bright Spots

Family Circle, MSLO, Clear Channel, Gawker and HBO Show What Works in This Economy

Published on .

NEW YORK (AdAge.com) -- Sure, 2009 has been tough so far, with most trend lines pointing way, way down. But for every action, there is an equal and opposite reaction. Here at Ad Age, we decided to find some media properties that are actually moving the needle northward this year to see what's working in these difficult times.

So what is working? First up, great, must-have editorial and entertainment is a common thread. Know your audience. Help marketers tailor ads for that audience. And constantly revamp a trusted brand to stay relevant and indispensable. Easy, right?


Martha Stewart Living Omnimedia's digital revenue went up 28% last quarter, thanks in part to advertorial content on the web.
Martha Stewart Living Omnimedia's digital revenue went up 28% last quarter, thanks in part to advertorial content on the web.
We knew digital wasn't immune to economic woes, but a look at the major internet portals last quarter revealed a pretty sad state: Yahoo display revenue was down 13%, AOL's dropped 20%. Even The New York Times saw no digital relief -- down 15%. That's why Martha Stewart Living Omnimedia's 28% rise in digital dollars -- bucking the company's losses in print and TV -- stood out. Sure, the company's not as big, and its internet business is coming off a smaller base. But it also made some smart moves.

MSLO has successfully adapted the advertorial approach, so common in print, for the web, creating custom programs and developing ad creative in-house, so the look, feel and sensibility is similar to the site's content. On a larger scale, it created its pet site as a custom ad program for Purina; on a slightly smaller scale, it used Martha content to create custom ads for Post and Kraft. But it's not just that it's doing such deals, it's the volume of them. Of the material deals that represented the biggest lift in the second quarter, 60% to 70% of them included custom creative, estimated Christine Cook, senior VP-digital sales at MSLO. A Kraft campaign, for example, lets users choose their location and serves up recipes that include local, fresh produce. MSLO doesn't make money off creative production, but it doesn't lose any either -- it includes it as a line item.

"The savior for us is meaningful creative," Ms. Cook said. It makes the site a better experience for visitors and it keeps clients happy, because "it's like having designers of Martha Stewart craft the communication that will be best received by our audience."

It also didn't hurt that the company's page views jumped 59% in second quarter, the result of better vertical-content packaging and some clever programming partnerships, such as a DIY wedding with Etsy.com. The web inventory wasn't sold out, but Ms. Cook said CPMs, the cost of reaching 1,000 consumers, remained roughly on par with fourth quarter 2009. MSLO doesn't use ad networks, so it fills unsold impressions with ads promoting its merchandising partners, which helps drive revenue for other parts of the business.

"You can't support a robust website on $2 CPMs," she said.

-- Abbey Klaassen


While display advertising prices took a tumble this spring, Nick Denton's Gawker Media pulled in big names like Heineken, Pepsi and Cadillac.
While display advertising prices took a tumble this spring, Nick Denton's Gawker Media pulled in big names like Heineken, Pepsi and Cadillac. Credit: Matt Haughey
Did Gawker Media just grow up? The little web publisher that big media loves to hate is now teaching them a thing or two about brand advertising. No belly-fat ads, ads with festering sores or diet-success stories; just big, splashy brand ads from HBO, Audi and Samsung.

Founder and CEO Nick Denton claims ad revenue is up 45% over the first half, and while the bottom fell out of display advertising this spring, Gawker signed up Heineken, Pepsi, Cadillac and Jaguar. His secret: no ad networks; sell ads exclusively to brand advertisers; make them big, kind of like a magazine; and don't sell too many of them. That basic formula has kept Gawker's head above water during the downturn -- and even helped them thrive in it.

"The financial crisis concentrated the mind: we've always been audience-obsessed, but for the first time we really focused on advertising sales," Mr. Denton said.

It doesn't hurt that some of the publications in the Gawker portfolio have transcended their snark-only roots to become leading publications in their space. Take Gawker's biggest property, Gizmodo. In July, Gizmodo devoted a week of themed posts as a tribute to 1979 -- really the late '70s -- as the era that gave birth to the modern gadget.

Bill Gates wrote a post reminiscing on the founding of Microsoft. Yes, that Bill Gates. Why? "I read those 1979 stories all last week, and it put me in a nostalgic mood, so I wanted to offer my own memory to add to the collection," he wrote. Get that? He's a reader and felt compelled to share! So he took time out from fighting malaria and managing his and Warren Buffet's billions to write about Microsoft when it had 13 employees. (That post had 175,000 hits, natch.)

More material to Gawker, however, is that brands now like associating with the sites, which are a cheaper buy than, say, Conde Nast. Late last year, companies such as Sprint and Samsung started quoting Gizmodo in their own marketing, a testament to the sites' street cred.

The bulk of Gawker's business is now whole-day takeovers of a blog, which creates scarcity and occasionally scheduling conflicts for certain dates. It's a better problem than last fall, when he was preparing for the worst by laying off staff and shedding blogs.

"The audience they bring together tends to be influencers in those categories -- tech, media, fashion and pop culture," said Carrie Frolich, managing director for digital at Group M's Mediaedge:cia. "It's an affluent and intelligent audience that reads the site, which is generally what marketers are looking for."

Gawker offers pretty-devoted audiences and increasingly, some scale. Unique visitors across the network were 6.3 million in June, according to ComScore, up 9% from a year ago. Gizmodo and Gawker.com were up 16% and 52%, respectively.

"These sites were always desirable because they were lifestyle sites playing to reader passions for gadgets, video games, science fiction or sports," Mr. Denton said. "Now they're no longer so niche."

-- Michael Learmonth


Customers see original programming like 'True Blood' as a good deal, says Eric Kessler, HBO's co-president.
Customers see original programming like 'True Blood' as a good deal, says Eric Kessler, HBO's co-president. Credit: HBO
Cable TV is one of the few products to emerge even stronger from the recession, with paid TV subscriptions at an all-time high in fourth-quarter 2008, and cable networks continuing to steal ratings share from their broadcast counterparts well into the summer. But one network that has thrived despite many perceived obstacles is HBO. While premium-cable channels are often the first to go when consumers re-evaluate home entertainment expenses, HBO continued to add subscribers in first-quarter 2009, totaling more than 29 million homes.

What's the secret? Perceived value for premium content, said Eric Kessler, HBO's co-president. "In a time when people have less discretionary income, anywhere they spend their money they want to be sure they're spending it on quality and a reputation for quality programming," he said. "For a little more than the cost of a movie ticket in New York City, you're getting a month's worth of programming that includes Hollywood hits, original programming, documentaries, sports and live events."

Mr. Kessler said the recession is also boosting the network's first-run movies and miniseries, with HBO's Saturday night movie ratings up a whopping 40% year-over-year. "It's interesting that on a night when people would go out and spend money, they're watching big theatrical films at home on HBO instead," he said.

HBO is also at the forefront of cable TV's biggest distribution gamble since the set-top box -- Time Warner's TV Everywhere, an industry-wide initiative designed to offer cable programming free of charge online to authorized, paying cable subscribers. HBO was the first network to test the model in a 2008 trial in Wisconsin and just expanded its efforts to 5,000 Comcast subscribers in a trial that rolled out in July.

-- Andrew Hampp


Clear Channel's IHeartRadio app has scored 2.5 million unique downloads on the iPhone and Blackberry.
Clear Channel's IHeartRadio app has scored 2.5 million unique downloads on the iPhone and Blackberry.
2009 has been an especially rough year for the radio industry, with revenue down a whopping 24% during the first quarter. But online radio is a small but fast-growing sector that continues to pick up steam, including a 13% spike in first-quarter 2009, thanks in large part to aggressive efforts by companies such as Clear Channel, which made a big bet on streaming audio five years ago as a source of organic growth in audience and eventually revenue.

Those plans accelerated last summer with the launch of Clear Channel's first mobile app, IHeartRadio, which has gone on to amass 2.5 million unique downloads on the iPhone and BlackBerry. The mobile momentum has also translated to Clear Channel's overall online audience, with 22 million unique listeners frequenting the company's digital properties each month and over 9 million unique visits to the company's digital media player, with streaming adding a 15% increase to the company's total radio audience.

The ultimate irony? Clear Channel, the company most commonly associated with homogenizing the airwaves with restricted playlists and redundant oldies stations, wants to become the ultimate artist-discovery tool for music fans online. It's even taking a few cues from satellite radio, tapping the likes of Christina Aguilera and The Eagles to curate their own radio stations. "We haven't looked at ourselves as just a radio company for some time now," said Evan Harrison, Clear Channel Radio's exec VP-head of online.

The moves have also helped Clear Channel distinguish itself from No. 2 competitor CBS Radio, which recently acquired Last.FM and added Yahoo and AOL's streaming radio players to its network. aggregating an audience that often competes neck-and-neck for online radio share. Keeping the competition healthy, Pandora, the web's top streaming audio site, tapped Clear Channel to lead its audio ad sales, an ironic move for a startup whose founder set out to become the world's largest standalone radio company.

-- Andrew Hampp


The growth of food advertising this year has helped Meredith's Family Circle notch an increase in ad pages.
The growth of food advertising this year has helped Meredith's Family Circle notch an increase in ad pages.
Monthly magazines as a whole have seen ad pages drop 22% through August, compared with the equivalent period last year, according to the Media Industry Newsletter. But Family Circle has posted a 12% increase. Its September issue was its biggest in its 75-year history. How has this possibly happened?

The magazine's executives credit its purchase by Meredith in July 2005 and subsequent re-imagining by Linda Fears, who was tapped by the new owners as editor in chief. The magazine had been too broad editorially but found a new focus on women with children between 7 and 17 years old.

"That's given us traction with advertisers," said Carey Witmer, publisher. "There are others, certainly other magazines, that are struggling, that try to be all things to all people."

But, in a weird way, the recession hasn't exactly hurt either. "I really believe that the coverage in Family Circle, at a time when people are looking inward and focusing on home and family, has been a big part of its success," said Andy Sarayen, exec VP at Meredith.

New advertisers this year include Ikea, Lowe's, JCPenney, Lenscrafters and Horizon Milk. The magazine's biggest category, food advertising, has grown this year -- also partly, executives said, because the recession has focused more people on eating at home.

"Consumers are seeking value, and Family Circle offers that in price as well as with ideas to spend their money wisely," said Jeff Fischer, senior VP-managing director at Universal McCann. "Consumers are focusing on what's most important right now, and that's home and family. And given its point of differentiation within its category -- focusing on moms with teens and tweens -- marketers have a valuable and value-oriented outlet for their messaging."

And to the degree the recession has focused advertisers on making very efficient buys, Family Circle's giant circulation helps. It's reporting average paid and verified circulation of 3.9 million during the first half of the year, over-delivering on its 3.8 million guaranteed rate base by more than 100,000 copies.

-- Nat Ives

Most Popular
In this article: