Jim Norton entered the land of Condé Nast late last year with a directive from chief executive officer Bob Sauerberg to help restructure the upscale magazine publisher so that it could thrive in the digital age.
His addition was jarring to some in the Machiavellian hallways of Condé Nast, and welcome to others.
A self-proclaimed Boston guy who cheers for the Red Sox and commutes to Beantown every weekend to see his family, Norton joined Condé as chief business officer and president of revenue, a new role. His arrival not only brought forth a massive reorganization that included a rehaul of the business, corporate and editorial teams — not to mention a steep round of cuts of more than 100 – but also a cultural shift. Condé, which is perhaps best known for its bon vivant, high-spending culture of Champagne, black cars and clothing allowances, is taking cues from its thriftier rivals, such as Hearst Corp., where editors and publishers sometimes oversee multiple titles and mind increasingly leaner budgets, as the company devises new strategic partnerships and advertising campaigns.
Adept at corporate speak, Norton, who peppers his conversation with business acronyms and jargon, may fit more into that world. An executive with more than 25 years’ experience in media sales and marketing, he most recently was at AOL, where he served as the global media sales lead there. His specialty includes programmatic and platform-based media, as well as branded content and premium ad experiences such as native, customized content and original video — all vital planks in Condé’s ongoing transformation to adapt to the media world of the 21st century.
On a spring day in early May, Norton, who was looking slightly Condé-fied in a charcoal Hugo Boss suit, white button-down and Gucci loafers, spoke with WWD from his corner office on the 42nd floor of One World Trade Center, about his plans for the company, the dilemma of fake news and whether more cuts are on the way.
WWD: Can you explain the reorganization and how do you envision it working?
Jim Norton: I don’t want to be overly verbose. I could sit here for days talking about that. Here’s the transformation at a high level. The collective power of the Condé Nast brands allows us to compete at the highest levels in all of media and marketing. As you know, we have historically been running our businesses as individual, cottage-based companies, so 22 brands are effectively 22 separate P&Ls [profit and loss statements], which also means 22 built-out businesses. What we’ve been missing, when we go out to do that, it is really difficult for us to have the top-tier media partner conversation when we’re very fragmented. That’s sort of the overarching goal: how do we get a seat at the big table for those really deep strategic, enterprise-level partnerships? That’s one.
Number two: as we begin to evolve our product set, that becomes much more data-centric audience-focused. Now we begin to cross all of our brands. If you think about audience, audiences are not just distinct to each audience brand, there’s a lot of crossover. What we’ve got to be able to do is structure a team that allows us to be able to sell across brands. In some cases, that might be within a brand collection, but in most cases that’s going to be across all of Condé Nast’s brands.
The third key component is: how do we isolate the most important clients that we have, the most important customers that we know will drive individual categories? How do we look at the top 100, top 150 accounts and say, “You know what, we need to organize and resource against these ones,” that’s where 65 to 70 percent of the revenue spend is really head of the tail, so how do we get hyper-organized around that? But what it also does is it helps us to learn about those client industries and develop new ad products and really point the strategy of our company against what’s happening against each of these individual industries. You think about beauty, fashion, tech, telco [telecommunications], finance, automotive and so forth. We can then organize the rest of the company around servicing those industries.
WWD: How does the reorganization differ from that of Hearst or Time Inc.? Hearst has a group-publishing model; Time Inc. has executives who sell by category as you do with chief industry officers here.
J.N.: I can’t speak intimately about both of their organizations. I just don’t know them well enough. What I can tell you just from our perspective where we know they have made some mistakes along the way, without getting into the intricacies of their organizations. As much as we are customer focused at an industry level, we are still brand-led. It is still the power of the Condé Nast brands. We still maintain significant teams at each of the brands that can speak to the differentiation and the distinction of those particular audiences and what that content represents. In addition to that, we don’t have a separate digital organization. Everything is together. It is fully integrated. Those folks that are selling print are also responsible for selling digital. We have a hyper focus around what I would call diversified revenue streams. We’ve got print at obviously very much the core, but we are diversifying revenue not just to digital, but to experiences like licensing to other partnership and rev-share — programmatic is obviously a big initiative for us. We’re trying to be modern and contemporary in our thinking around industry trends and customer focused, but also we are leveraging the heritage of Condé Nast with the power of our brands.
WWD: Who is the point person that usually talks to the advertiser?
J.N.: Depends on which client it is. The way in which we have this set up is, for our larger clients — and what we deem to be our most strategic partners — there’s a quarterback that lives on the Industry team. Their role really is to understand everything that is going on at that particular advertiser. Think about it from the perspective of the client. The client only has to deliver a single brief. This is really about the strategic partnership.
When we talk about the Industry role, it’s about looking at multiple quarters or even annual planning cycles, so for second-half of 2017, these are the company priorities, this is what we want to focus on, these are our major business challenges. The leader of the Industry team can brief their partners at each of the brands to say: “Hey, I was at a major beauty advertiser yesterday. Here are their priorities for the next six months. These are the types of audiences they want to attract, these are their KPIs [key performance indicators]. What are the solutions that you guys are thinking about?” Not only pre-existing tent pole opportunities, but also what are some of the new editorial programs that you are hearing the edit teams discuss? What are some of the new sponsorship or partnership opportunities that you have that might make sense? Now, there’s the opportunity to curate the best of Condé Nast on behalf of these major strategic partners, at which point the brand leads are in those conversations. They are the ones delivering the presentation on that, but the balance that you have to strike is organized around these clients and understanding what their true needs are, as well as, at the brand level, understanding everything there is to be offered. It’s when those points meet that the magic happens.
WWD: During the reorganization, there were a lot of cuts and some magazine closures. Is there more coming?
J.N.: No. I’ll go back in time again. What this started around — before we even got to any of those actions, it was really about, let’s understand market opportunity. Let’s do a real deep dive on our major clients’ businesses. That’s not only the clients we have had long-term historic relationships with, but also advertisers we’re not talking about today — major advertisers where we think there’s an opportunity because of the power of our audience and the quality of our content. When you go through this very data-driven, quantitative exercise on the total addressable market, then you begin to organize around it. It was really the first three to four months of really deep client work, at which point we named the leadership team, and then began to say [to them], we need your qualitative input. That team helped us to build out this final structure. Now, of course, there were cost-saving goals, as every company goes through, but we wanted to get through that at one point, which we did. That was early April when we made all of the “people impacts,” we adjusted budgets, we set forth the headcount goals internally. As it stands right now, there are no more planned impacts or cuts.
WWD: What’s the headcount now?
J.N.: We still hover around the 2,800-range. [Condé had about 3,000 freelance and permanent employees pre-restructuring]. We’re still hiring. There’s a profile that we’re looking for. It’s people who understand the power of content and content in a digital world. And how can the heritage of Condé Nast quality come through in a digital setting, whether that be through social, whether that be through data-driven programs, certainly video.
WWD: Would you address the rumor that you were brought in to prep the company for sale?
J.N.: No, I mean I can’t address it but I can tell you, it has never come across my desk. Might as well go right to the hoop though, right?
WWD: I had to ask. I wouldn’t be doing my job if I didn’t. How do you allocate your resources here in terms of hiring? Where are the growth areas here?
J.N.: The growth areas in this diversified revenue initiative that we have is built into our compensation plans. It is around social sales, data-centricity, I mean, it’s so key. Unlocking the value of our audience. Think about the ability of us being able to take a data set. These are the most important consumers on the planet and being able to build out custom audience segments around that is so valuable. So you’re looking for the profile of a person who is very comfortable talking about how do you do a CRM [customer relationship management] exchange in a secure third-party setting to build out custom audience segments that we can target against and optimize against. That has to be as natural as it was for somebody to sell a cover for in a print publication. That’s the audience component of it. What’s the format? Is the format in a social setting, leveraging the Condé Nast social handles? Is it a video setting where we are doing targeting against our video audiences? Is it straight-up native advertising or is there a branded experience component?
WWD: Is there a specific segment in the business you are looking to grow?
J.N.: We are very strong in beauty and fashion and have always been. We can be a greater partner in those categories because those industries are all going through their own levels of change right alongside us and we can help them with that. But I see massive opportunities in non-endemic Condé Nast categories if you think about consumer-packaged goods. How do we marry up audience data in a retail closed-loop environment? Can we track in-store sales?
WWD: For e-commerce?
J.N.: Both e-commerce or in-store registered data. We’re in the process of building out a partnership with Nielsen Catalina where we can actually get that registered data to measure the effectiveness and efficiency of our campaigns. The pharma category [is another one].
WWD: Teen Vogue has been reduced to a quarterly. Does it need to have a presence in print?
J.N.: Yeah, I think so.
J.N.: I mean, here’s what print does for us: For one, it is that physical billboard in a lot of ways that is still so important. For the credibility of the brands, it distinguishes us from pure-play digital publications. It’s also a reminder that we are a company in a building filled with professional journalists, professional editors, who are turning out a magazine whether it be on a monthly basis, on a quarterly basis, even on an SIP [special issue publication]. It’s a very different profile of an edit team, those that are producing a physical publication, as well as digital, so I think that’s incredibly important. But it also gives us the opportunity to innovate. We’re innovating in print. We’re innovating with frequency, with the actual physical output. [Pulls out a copy of W, which has a cover on each side]. I mean, this is two magazines in one! Print gets bucketed as a non-innovative medium.
WWD: Condé touts its social media reach but can you monetize that?
J.N.: Yes. We have some great partnerships with Google, AMP, YouTube, Facebook, Instagram, Snapchat. We’re one of the largest publishers on Snapchat Discover. We have favorable sales arrangements with them. I won’t get into the specifics but, yeah, there’s a monetizable opportunity where we have either co-sales rights, depending on how the waterfall is set up. But there’s a great opportunity to monetize there. We think that we can be an even greater partner to all of them because of the quality of the content and they are not content creators. They are great technology platforms that provide unquestioned scale and I think the quality of our content will help them drive that scale.
WWD: What about e-commerce? What is the company doing with Style.com?
J.N.: Yeah. How much are we talking about Style right now? [Asks p.r.]. It’s Condé Nast International right now that is really piloting a lot of the e-commerce.
WWD: But wasn’t there going to be a relaunch of it here?
J.N.: Yeah. But what I can say is where we’re exploring is partnering with other affiliates.
WWD: Affiliates like Amazon, Skimlinks and Wal-Mart?
J.N.: [Turns to p.r.]. Let’s not talk about it right now. What I can say is this, through Co/Lab, our digital services organization, we’re exploring deeper partnerships with all of the affiliate marketers. Consumers come to us for recommendations, what to wear, what to eat, where to vacation, they want that recommendation. How can we connect that?
WWD: When you say deepen your relationships, do you mean change your revenue-share model?
J.N.: Yes, in terms of revenue share and in terms of promotion. It’s not a requirement for us to have any e-commerce link on anything, but is that something we want to consider? We’re just in the early stages of testing on this. But I believe and I think the company believes — consumers are telling us they want that utility. The question becomes, how does it manifest itself for us?
WWD: How can publishers begin to take more ownership over their content and not be so under the thumb of third-party platforms?
J.N.: The focus for us is there is nobody better in the industry that is going to recommend with authority and that by itself will drive [sales]. The power of the brands and that recommendation credibility will supersede any of the issues you have with partners and affiliates. You just accept the fact that’s part of the business model.
WWD: How do you combat the fake news problem? You have mentioned TAG certification. What is that?
J.N.: TAG certification is from the Trustworthy Accountability Group and it’s an audit effectively of all of our web sites to say, “Are we in compliance with the guidelines set forth by the coalition for better ads?” So that’s number one. Number two, we combat fake news by saying, “We are not fake news!” There has been this race to the bottom in trying to churn out cheap content to get impressions that you can go and monetize. Real news is not cheap. It’s expensive to produce the content that we do. What I challenge the industry on…is do you know where your ads are running? I get it that you got a better CPM [cost per thousand] but have you seen the content against which your content is adjacent? Brands need to vote with their pocketbooks on this and take a stand and say, fake news, alternative facts, fraud, non-safe brand content — yeah, I get it, it’s cheap — but our brand is better than that. The environment in which their brand is displayed is commensurate with the quality of that brand. If you have a brand that is a promise to consumers, be very, very mindful of where you are spending your ad dollars.
WWD: You came from AOL. What was your pitch for this job?
J.N.: Here’s what I was seeing in this industry, this overfocus on programmatic and this race to the bottom, and I just knew the pendulum was going to swing back toward quality content and storytelling because if you think about the last five years in the industry, both agencies and advertisers have been so focused on, ‘I’ve got to build out my tech stack to be able to transact more efficiency in advertising.” Everybody got away from storytelling. All these brands woke up and said, “Holy s–t, I forgot to tell my story. I get it, I can now transact at lightning-speed, but what about the brand?”
I just knew that a company like Condé Nast with its heritage of quality content would become much more in favor with major marketers and we see it. Despite the fact that there’s a massive transformation project that we’ve embarked on, what’s great is to be able to do that when our brands have never been hotter in the marketplace, and never been more relevant. That’s the air cover that you need to go through a transformation, strength of product and quality of audience.
WWD: So did you approach Condé or did they come to you?
J.N.: It was a combination of things. I knew what Condé was going through. I wasn’t in the market for a job, but when the opportunity presented itself, one thing led to another. All the major media companies are going through some level of transformation. I was fortunate at AOL to go through multiple iterations of transformations. I sort of knew what needed to get done. I haven’t seen anything here that I haven’t seen elsewhere. It’s the same everywhere.
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