Condé Nast 3.0 is under way.
The New York-based publisher named company president Bob Sauerberg as chief executive officer, effective Jan. 1.
This story first appeared in the September 15, 2015 issue of WWD. Subscribe Today.
Current ceo Chuck Townsend, who has been in that role since 2004, will remain at the company and assume the title of chairman, which is held by publishing scion, S.I. Newhouse Jr., 87. Newhouse, whose family owns Condé Nast, will become chairman emeritus. Newhouse has gradually stepped back from his day-to-day role at the company over the past two years.
Although Sauerberg, who served as president for five years, has spearheaded many Condé initiatives, and has served as a prominent face for the company, his appointment still raises the question: What will his version of the publisher look like in years to come?
On Monday, Sauerberg said: “I have never been more optimistic about our company and business. We are the home of the best pages, screens and experiences, and we will seize this time to grow these core, valuable assets, extend them onto more platforms and places where they can succeed, and strategically develop and acquire businesses that target new audiences and partners.”
Although those words aren’t very telling when it comes to vision, one need look no further than Townsend’s initial comments when he brought Sauerberg into the company in 2010.
“I’m charging him with leading the company in the creation of a new [business] model, which is technology-enabled, consumer-centric and [concerned with] the monetization of that [consumer] relationship,” said Townsend at the time.
The ceo continued, expounding on a problem that still looms large for Condé Nast and other legacy media companies.
“What I still don’t know how to do is to monetize the relationship with the consumer like the cable-distribution companies have been able to do,” he said. “Why will consumers pay 180 bucks a month for TV programming they never watch, don’t know the brands of, have no interest in, and will [only] pay a dollar a month for a magazine subscription to Glamour? There’s gold in those hills somewhere,” Townsend said. “How do I mine it?”
Sauerberg and Townsend have been trying to solve that conundrum through the development of Condé Nast Entertainment in 2011, but that venture has been likened more to a money pit that has lost dollars by insiders rather than a source of wealth.
And so while Sauerberg’s appointment is being heralded by Condé Nast as a new chapter — one that is reflective of today’s digital-centric media landscape — and less focused solely on print, there’s still work to be done.
Condé, like other traditional publishers, still derives the bulk of its revenue from print advertising, a sector that is in decline as readers opt for digital over printed content. The privately held company does not provide financials. But recently Sauerberg told The Wall Street Journal that it would generate “well north of $1 billion in overall revenue in 2015,” but it will be down, as it was in 2014. Growth in profit margins are due to cost-cutting, and total revenue for next year is anticipated to be flat, he said.
Although the publisher has cited its digital growth in the past five years from an audience of 17.2 million to 87.3 million monthly unique visitors, that is across all its properties, including the high-trafficked Reddit. In July, Reddit accounted for 32.8 million or 37.6 percent of the 87.3 million visits, with the rest being parsed out by the company’s numerous titles, including Wired, The New Yorker, Vogue, Vanity Fair, Self, Epicurious, Bon Appétit, Details, GQ, Glamour and others.
For some context, Buzzfeed generates about 80 million uniques a month across all its platforms. Still, the company pointed out that over five years, it “more than doubled its digital revenue.” Without a financial breakdown, it is hard to derive what that means.
Condé isn’t the only traditional publisher trying to evolve its business model; rivals such as Time Inc., Hearst Corp., The New York Times and others, are also in the process of figuring out how to grow beyond print. For Condé, the development of new revenue streams has included the creation of Condé Nast Entertainment, branded content unit 23 Stories, an e-commerce site under the reimagined Style.com and an events business. While CNE has experienced growing pains since 2011, it is clear that the company is shifting resources to new endeavors.
The board, which includes Steven Newhouse, chairman of Advance.net, the digital arm of Condé parent Advance Publication, and Jonathan Newhouse, chairman and ceo of Condé Nast International, acknowledged the company’s challenges.
In a statement on Sunday, they offered: “Chuck Townsend has done an exceptional job as ceo, leading Condé Nast through a challenging period of change and transition. We are particularly grateful to Chuck for preparing a succession plan over many years. When Chuck came to us this summer with his request to step up to the chairman’s role, we knew that Bob Sauerberg was a change agent who was ready to lead the company’s growth agenda.” — Alexandra Steigrad