Bloomberg Media's CRO thinks it's a great time to be a publisher
It is, to hear Bloomberg Media's Keith Grossman tell it, both the best of times and the worst of times to be a publisher, depending on who you ask. On January 1, the global chief revenue officer broke down his view of the digital media landscape on LinkedIn in an inelegantly titled manifesto called "Topline Assessment and Guidance for Understanding the Current Marketing Ecosystem for Content Producers." (Spoiler: He's on team best-of-times at Bloomberg.)
Of course, publishers who aren't Bloomberg Media have a lot to envy when it comes to Bloomberg Media. For starters, it must be nice to be nestled inside a bigger financial and tech company that sells, among other things, Bloomberg Terminal subscriptions for around $25,000 a year.
But those terminals aside, Bloomberg Media has been experimenting across the board — from its consultancy play to an aggressive over-the-top streaming strategy to TicToc, a video partnership with Twitter launched last year.
Grossman joins the Ad Lib podcast to discuss why he believes these to be good times for a media brand that knows what it stands for. This interview has been condensed and edited for flow.
First thing's first: Is Mayor Mike running in 2020?
[Laughs.] I hope. I pray. But I actually have no clue.
How did the fourth quarter wind down for Bloomberg Media? Your CEO, Justin Smith, was predicting 15 percent growth.
Justin was very public about where our projections were going. We delivered right in line with what he said. We're slightly higher.
Across the board? The print assets are under strain.
While print is definitely a challenged medium — print was not a double digit growth; it may have been more of a double digit decline — where Businessweek is actually very strong is how it delivers against a subscription model as well as how it delivers in terms of online content. There was a point last year I looked at the stats: Businessweek comprised one percent of Bloomberg.com's total content, but derived five percent of its traffic.
This, after you cut your subscription rate base and put up a paywall?
For a very long time publishers built their print revenues off of large rate bases, not off of the quality of who the actual readers were. Our view of it was: How do we clean this up even if it means bringing down the rates? We actually brought down the rate per page commensurate with the decline. How can we ensure that we are delivering our partners on the advertising front the most pure product and on the readership front, deliver it to people who want to pay for it?
You posted an interesting piece in LinkedIn at the kickoff of the year.
[Laughs] You love the title, right? One of the things that's interesting, it's not just print that was challenged. Radio, terrestrially, was challenged. At the same time having all the assets of a terrestrial radio station allows us to create a tremendous amount of podcasts. So with digital audio, we see things elevating. A lot of the things that made our year very successful was our ability to protect the core media assets, or base, in aggregate and then invent new revenue streams for us to move forward in.
Bloomberg has also gotten into the consulting space.
The biggest evolution, and the one that hasn't accurately been told, isn't that we launched a consultancy. We actually turned our entire organization into a consultancy. By moving the audience into the center and having the strategists have the capability to say here's how you can talk to them without the answer always being "Bloomberg Media," it's an interesting new property for us.
Where are your clients' pain points?
It's the worst of times for brands that meant something for one generation that might not mean something to the next generation. The worst of times [for] brands that either built their value proposition off the backbone of platforms, or brands that were late to the game in terms of believing that they had to give up where they made most of their money -- the classic innovator's dilemma of protect the high CPM assets at the expense of the lower CPM substitute into the marketplace.
How does Bloomberg think about the next generation, then? It does seems like an older-skewing audience.
Your perception is pretty accurate. One of the reasons we launched TicToc was to skew younger. If you go to Bloomberg Radio it's the most male, oldest. If you go to Bloomberg's OTT offerings, or to Bloomberg TicToc, it actually happens to be most equalized male-female and the youngest, late 30s.
How do you explain TicToc in a way your parents can understand? Why overlay the Bloomberg newsroom onto Twitter to create this streaming partnership?
First of all, my mother calls it "The Twitter." [Laughs.] The goal for the TicToc brand is news for the way you live your modern life. You're going to start seeing TicToc as a brand in airports; you're going to start seeing TicToc as a brand on other platforms. Over eight figures in revenue in year one, and that caught us by surprise by the way. We were blown away by what the marketplace reaction was to it. Average daily views, about 2.5 million. On Twitter we're approaching 550,000 followers in one year of being live.
You're also bullish on OTT.
We got into the OTT game pretty early and we've been scaling it up. In Q4 we found that we had 68 percent of our OTT inventory sold through. The same time in 2017 we were only 24 percent. However we have more inventory -- so with more inventory we have high sell through. So something is happening.
How big a piece of the pie is programmatic for you?
In 2014 programmatic was less than $100,000 of revenue for Bloomberg. Last year we did I believe a little over eight figures in programmatic revenue. But it's not open exchange, which is where people are confusing it. If something can be digitized it will be ultimately. If it is, it's more efficient and effective to be sold by computer. It's just playing supply and demand and where they can meet.
Which is why programmatic gets associated with remnant inventory.
I love this conversation. Think about it this way: The first players I remember getting into the programmatic space was Procter & Gamble and the CPG category. Even if you move a tiny percentage of marketshare in that space, you're talking about hundreds of millions of dollars. Just an absolutely incredible amount of money. What are they selling? For the most part products like toilet paper and detergent. Ultimately it doesn't make a difference who you sell toilet paper to or detergent: As long as somebody cares about their cleanliness, they're going to buy your product.
Which is the goal.
You're selling to an audience. You're not selling to a community. If you bring in a brand like a Bloomberg or a Wired or an Ars Technica and you start to say, "I want an individual who is a CIO or a CTO or a CEO," you're actually creating a smaller pie to buy against, so it's not an audience. So the CPM actually goes up instead of down. The reason people equate programmatic with remnant or cheap rates is because their first experience with it was these CPG companies. The reality of the programmatic marketplaces is that it's starting to merge and evolve to these [automated guarantees] and [private marketplaces] and that's a good business at the end of the day.
Is everything ultimately going to be bought and sold programmatically?
I think it will ultimately over time based on how I see the world today but I've been wrong so many times that after reading "Black Swan" I will not give any predictions. [Laughs]
Speaking of "Black Swan," you often post what you're reading on Instagram. What have you read recently that changed your view on something?
The book that really changed my whole perspective on everything and leadership was "Long Walk to Freedom" by Nelson Mandela.
You yourself were named after someone very famous.
[Laughs] My father wanted to name me Mick after Mick Jagger. My mother said, "No." My father tried for Keith Richard Grossman. My mother said, "No." They settled on Keith, after Keith Richards, which as you know from knowing me ...
You are the most Keith Richards guy I've ever met.
Totally. In complete opposite bizarro world, I am Keith Richards.