Forbes Mark Howard: Advertising is still a double digit growth business
Advertising can still be good business. Forbes, for instance, is still seeing double digit growth in its digital at business. That's according to CRO, Mark Howard. It's growth has been bullied by an idea, led sales approach ties together many Forbes products. I'm Brian Marsin? Welcome to the digital podcast this week, Mark I talk about what else revenue diversification. And what that means for Forbes and why pay wall isn't right for publisher that still believes in the benefits of skill, Mark. Welcome back to the podcast. You're on the digital podcast and it's earlier years a couple years ago. That's right. That's you're having me back. So lot's happened since then terrible times for magazine companies like Forbes. I mean how bad is it? Not so bad. Not so bad. We seriously, we do here a lot and we write about a lot about some of the struggles in the broader media industry right now there's a lot of threats out there. There's a lot of focus on revenue diversification now because of the weaknesses in advertising. And then on top of that, there is a lot of challenges places like Conde, and other places that have these, these magazine legacies splaine why four. Cbs is different from all of this drumbeat of bad news. Absolutely. Absolutely. I think we got a little ahead of this thing, which is great. We had the vision quite a while ago, I would almost go back to two thousand ten to be the year where we really started on the path that we're still on, which is a very aggressive revenue diversification strategy, it became very clear coming out of the global recession to us, single title, media media company. The magazine had been really the driver of most of the Ravin is for all those years, when we saw the hit that happen in two thousand eight two thousand nine to us. We had also been growing our digital business. We had had a standalone business for dot com. It was separate from Forbes magazine, the recession forced us to merge, the two companies and me coming from the digital side, and several others who were already keenly aware of what the digital ecosystem represented the rapid growth. We all the Mary meeker slides, we pointed to that delta and said, that's our opportunity. It's my favorite slide Mark Sino and, and we continue to reference, as we get into new businesses, and she continues to find those deltas what those opportunities are. But two thousand ten was really the first year where we started making some major strides in this diversification play. It was the first year that we had a brand published. A piece of branded content November will be nine years. SAP was SAP God. And they're still here for this everyone. What is sad fact that I know that's great. Never stopped in the nine years. They've been an unbelievable partner. But at that time, it was unheard of, especially in the business finance base for a brand to publish content into the CMS and to flow through the aditorial streams. And now it's, it's fairly everyone's gotta content studio. Everyone's got some kind of native advertising. That's right. So it's, it's pretty pretty accepted. At this point, it is. And there's lots of conversation in the media space now about has that even plateaued. And there's challenges around that everything everything's commodities, but you guys we're also very big into events in a lot of people are now coming on here and talking about their events, my call experiential or something, but explain how you guys look at revenue diversification. Because there's diversification from from print, digital, but there's also diversification from from advertising into non advertising streams for some people. It's direct consumer revenue for Forbes a little different. So explain how you look. At the buckets. That's right. So, so right now, the areas that I oversee, we've obviously got the print, the digital digital comprises of direct sold that the programmatic now programmatic. Erin, tea tree can touch on is a real source of growth for us at the moment, the brand content business, we made a big move this year where we have a custom research department, we call Forbes insights, it's almost like a mini Gartner that sits within sight of Forbes that in our Baramula groups, because those are content solutions teams where we had separate sales unit separate operations team separate content creation teams we've now merged that, and that has been a really big win for us this year and addresses, some of the challenges for that the marketplace is experiencing on branded content. It's still a very big growth business for us this year. One of our highlights. The live business as you referenced we've been doing it for many, many years lashes, like an insane number of. Vents last year. We did forty four branded events around the world. But then when you factor in all the customer events that we do it was about two hundred. That's insane number forty I'm like, yeah. I'm like you can do that. It's the two hundred. And look, we've got a lot of different ways that we do that in those vents can range from dinner series around the country to we have a venue here in Manhattan on Fifth Avenue that we call Forbes on fifth, and we do a lot of avent's for breakfast through custom dinners to two hundred plus people parties. So, you know the yacht anymore, we do not. We trade it in the yard for our spot on Fifth Avenue. But you've got to see it. It's, it's a beautiful venue, people are blown away like any cool spot in New York. It's got a destroyed door. So when you're walking down the street you almost don't know that. That's forbes. And then you walk in, and it's a it's amazing venue. Okay. Well, I'm looking forward to my invite actually it. But let suck numbers, though, put some numbers on these buckets, please. We're looking for exact revenue, but, like what's the breakdown? Yeah. So digital still is the workhorse for us as a mansion twenty that's ads digital ads twenty thirteen digital surpass print. Now, when you do the roll up of digital display direct sold programmatic sold programmatic guarantee, and our digital Brandis offering that is about sixty sixty five percent of the total revenue mex-. So it's still doing very, very well for us. It's still a growth, it's a double digit growth business. And we continue to see slot strength this year so far through the first half and the numbers are hitting hitting the numbers exceeding the numbers, even that we set out for ourselves. And we're doing quite well so that's sixty five percent. What's the rest? The rest is, is the rest of live the custom research business and the print business. And then now. Now, what we're also working on, we move this year, one of our top executives, Tom Davis into a new role of chief growth officer and sort of that innovators dilemma innovators solution. What do you do to make sure that you don't get disrupted? Tom is now built a growth team. And he standing up and new businesses. He's planting seeds this year where on go forward basis. Starting in twenty twenty the expectation is that programs products businesses that we can launch from that grow team will represent at least ten percent of the total revenue Mex, and that will happen. What kind of things with that? Yeah. So the first thing that we launched was actually what we're calling a direct to entrepreneur video video product. It's a monthly subscription product, we've launched it, and the reason why you're looking at me like I've not heard of this is because I was debating whether I was going to call a DT or not. I like the e because it is it's soul into entrepreneur so in a subscription. Shen to video product. That's all about entrepreneurship to help them at various stages of their. Yeah. It is. It's exactly right. And so what we've done, we have a great partner attack partner distribution partner who's actually helping us bring out in Africa, the relationships with all the telcos and it's going to begin to become Owen through a lot of the telcos over there. There's a huge movement over there. So people wonder why there's a huge movement to entrepreneurship. They've discovered it. They realized that, that's a path to better life economic prosperity, but even more so impact impact on communities impact on employment. And so for us for Forbes, it's a great brand synergy to great market, but being realistic, and I know you're gonna ask it's a very competitive market in the US to come out with a streaming video subscription product. We get that you have to have a really good products for people to pay for. It's a competitive space. We're we've already got about two hundred and fifty hours of content into this app. We're working with content creators, original content creators, so far. We've got a half a dozen of Forbes thirty under thirty list makers creating original content to go into the app, tactical content. Or is this, like, I have a term that I'm trying to trade markets? Entrepreneurs Affi, and that's the sort of, like, you know, the, the tweets you see about the struggle and the grind the hustle and whatnot. Yes. So all the data and then there's figuring out accounts payable. That's right. So all right. I. The practical part of, like, you know, running a business. But then there's this sort of mystical part that sort of is like, quasi, self-help quasi influence her. Yup. Yeah. And so, we'll get you subscription. I'll give you a courtesy subscription to the to the app, so you can see it, but it is intended to align with, whether it's inspire whether it's growth, whether it's impact the question about, is it practical, all the content we already had in our library. It just needed to be re cut to have different format. We needed to create it in a different environment, and we leverage all the content from our Forbes events. So we have video crews at all the events capturing video, and then we've pick and choose from those events, which pieces of the content will also go into the app, so between way of making money off of stuff. You're already doing. The magic of media is being able to like cut stuff up again and make money off of it. Whether it's like taking stuff right for one geography and making money off it in different way in a different market, or that's exactly right. So everything that we have in there launch we already had, and it was literally repackaging it, and putting it into this environment, having strong tech platform behind it, and taking it out. That's the first business that this growth unit has launched. And there are several others that you're skunkworks race, sort of thing, by the way, just where does licensing fit in, in this because you big license yeses company, so lacing there's many different form factors. I in what we've been doing for longtime licensing through local media companies in different companies, Forbes for them to publish a local language. It is Japan for Japan is big that's and we're in eighteen or nineteen countries around. Asia were, I think almost the same in Europe. We have several and Africa, some Latin and South America. So it's I think it's forty one at present count was several more in the hopper for this year that then with those forty-one partners goes into seventy countries. So Forbes is truly global there's very few places you would go where you wouldn't see a localized version, and it's a great. It's a great way for us in our brand to continue to have a global footprint in and be able to have an authority. Are you still doing the shopping centres and stuff? No. Wasn't there? Like office towers in Manila and stuff. Oh, yes. So so that deal did. Ago. Yeah. I don't actually know the status of that, we're going to check in. I'm gonna go to Manila and do some investigative. Let me know. So within the digital ads business, explain why this is still a growth business because I would think that it's pretty challenged. I mean we write all the time about Google and Facebook, you know, vacuuming up all of the, the ad dollars, and it's a challenge business, and I can understand on the other side. The programmatic stuff will will grow definitely a move to premium programmatic, as all the, the sort of grotesque environments, get expose, and I understand, you know, you guys were early in brand voice, but that stuff gets commoditised too, so, so where's the growth happening within digital ads? Yeah. So one of the ways that we've really seen a big uptick, is that notion of idea base owing, and how do you create big sponsor, little packages? The first thing that we have, what does idea based selling mean. So it's, it's how do we can work with the brand best understand what they're trying to communicate the audiences that they're looking for? And coming up with a program that satisfies, what they what they need the environments that they wanna create and be associated with and the audiences that they want to be in front of, and I'll give you a great example yesterday. We launched a program in partnership with a company called Teradata called Forbes analytics. Plus, the idea is, they're working with us to create three issues digital issues that will also play out across all of our their platforms. Live prints of video, we're gonna do research around it. So we've built this strategy for a year long program, where they'll be three three issues. Three real temples. I will launch yesterday. The second one will be July and the third in the fall, we did seven pieces of content on different companies talking today. Scientists. Into their CTO's chief digital officers. Those types of senior level executives driving strategies to better understand how their businesses are going to capitalize on understanding their customer data and apply in that in a practical real world way, not the hypothetical way that we read so much about that in the future. But how these companies are literally applying today's world, so pay pal stitch fix US Bank, where a couple of in the first one in the first episode or issue. Phenomenal program, very tightly integrated in our partnership, working with them, working with them at the highest levels of the marketing organization, and now the executive level to best understand how they wanted to project themselves types of audiences. They wanted to be speaking to and how Forbes because we have those people could assemble content based program to be able to get those people. Those types of eyeballs in front of this different from. Regular sponsored content. But you know you might have been doing five years ago. It's a it's a variation of that. It's, it's an evolution there has been the straight sponsorships and we still do that. And we do that very well. We have a lot of franchises, whether it's the Forbes thirty under thirty or the Forbes four hundred or millions lists. Those are at it calendar aditorial temp holes that we still do sell sponsorships to, and people want that people come there because that's what our brand is known for. That's you know, where audiences are already already amassed these custom type programs that are very, very top. The topics are very specific. Those are attractive brands, especially these types of BB brands financial services brands that have a very affluent audience that we do quite a bit with. They need to be specific environments where you're providing real information, usually actionable information that will help people in their professionalize or. And their personal investment lives be able to achieve more. And so our ability to work and our content solutions team is pretty dynamic right now. It does both at to'real sponsorships which they then work with the editors, and they do it in all of the editor purity to be able to putting Forbes quality content into an environment that you can then so a sponsorship around, or there's the branded content solutions, where you can create all kinds of branded environments where the brands have more of an input and say, in the actual content itself, very different, but very attractive in both areas. Yeah. And it's a different cell. Right. I mean like you're not you don't have a sales team. I would guess out there trying to sell display ad campaigns. We do. However, you know, those typically come smaller price point, they're more in the buying cycles of you know, quarter to quarter. They're not usually as big of a program to why isn't. That programmatic at this point. I mean, are you really doing? I o based like display sales. Yeah. Because there's still a market, if money. Yeah. You know, when the peace, come and yet you can't not do it. And by the way, it does serve as a great opportunity to prove yourself to different brands, and hopefully then lead to bigger discussion, right? Viewer bigger. Right. I mean, like I mean, like, of course, you're going to have large numbers of people come in through programmatic. And like you'll do some Mark open marketplace guest. But, you know, there's, there's more people who want to go into these, like programmatic guaranteed or, you know, private marketplaces, where they can easily transact for those kind of, you know, heavy lifting display campaigns. That's right. And, and actually, we have a lot of our top clients who do by us on an IO basis. And some of these idea based and sponsorship programs, who are also buying significant amounts of inventory, through programmatic air from people buying it typically is, but it's the same brands and so we see that a lot of these partners will buy through both of those channels and programmatic guarantee has been from a growth perspective. A real big surprises year. It's far exceeding at this point in the year. What our expectations were now? I know your next question. Working off of a low base. Well, you have listened to pass podcast. I listen to all of them. And, and yes, it is coming off of a lower base of guaranteeing like the year of mobile. I mean it's been predicted for a few years now. So maybe. It's finally happening. What do you think? I mean, that's just I guess it's driven by the market maturing a little bit. And also just maybe some reaction to all the, the brand safety concerns out there. We'll and it's just the ease of execution. Yeah. Typically, you know, we're starting to see programmatic guarantee it was what you would normally see and more of an I obey by now most of them are significantly bigger, and as these brands are looking to be able to have bigger impact with their with these campaigns, they can spend a significant amount money using that channel reaching a huge audience and obviously having all the controls that they need on the back end. So we're seeing that the average order size on the programmatic, Aaron tease out his way up from where it had been in the past. But with the weight going to these ideas led campaigns has that changed your Salesforce. Yes. And how. Exactly. So everything is really about a top account strategy, and we do a lot of analyzing of the top twenty five top fifty top one hundred accounts and specifically, how many platforms of ours, are they buying from us because if they're buying into the Ford brand they're buying into the Forbes audiences that we're able to segment for them through the respective channels? Then there's clearly an opportunity to say you're a big partner with us in these two platforms, you should be thinking about how we can extend that into some of these other platforms KPI, if you will hate. See guys suck me into using all these acronyms. But I mean like you want people to move across the different platforms. Obviously, that's right. And, and a lot of them have great extensions from one into the other. I can give you a couple of examples. Somebody does a custom research report for. We have a CIO of that part of an activation of sponsorship, at our CIO summit should be them in a thought leadership position sharing the key takeaways of that research report. Oh, and by the way, that research report should also be converted into different types of posts that and then be distributed on our digital website or different social assets that we can distribute to social platforms into linked in and other environments. So now, more and more. It's how do you take these concepts or the ideas in the execution of these programs and extend it into the other platforms? So I mean I I'm interested in how that changes your, your Salesforce. Exactly. Because it's different than going out and selling campaign. Same. We've got we've got an issue coming up pages, the cell, I mean, obviously, over-simplifying even like, you know, hey, we've got we've got a website we've got sections. We've got things to so versus. Moving people across platforms, and ideas. How you organize in order to get the best of both worlds. This has been a, a multiyear strategy that we've been focused on this. So it doesn't just happen overnight, the team itself, and to give you an example a few years ago. We referred to it as the media team, because media was the big driver that was direct Seoul, digital imprint right? Yeah. That's yes. Today. We refer to that team is the integrated sales team and they cut across all platforms say need different group that does the quote unquote ideas, we have a team that works with the sales team. Yes, an integrated marketing team sales development team that works with them to develop those ideas that they take out. So then that salesperson who has an account is really driving the conversation around. We've got an opportunity. Here's how elegantly plays out across the different platforms. Here's our recommendation on how to execute. Okay. So one thing that you didn't mention was how you're gonna have a big digital subscription business like, because you're instituting a paywall. Yeah. Why haven't we talked about that yet? So you'll never hear from us that we're pivoting anything. Okay. And every year, there's a thing that you could pivot to, there's obviously. The real big business here, and we continue to see the numbers for the public companies who share them, and there are successes that exist out there. We are doing. Okay. Yup. And as of this recording those numbers just came out, and it looks like they had another -nother get increased. So they're probably the alternate success story in terms of the scale that they've been able to achieve, and they're doing an amazing job, and they've got a great product for it. We're not in the breaking news space. We don't actually actively chase breaking news and write about the news as it's occurring we're more of an analysis website. So we don't necessarily feel at present now on never say, never, but at present the conversation for us, isn't about standing up a paywall on Forbes dot com. We've got these other businesses that are growing beautifully. We've achieved great scale, and I know some thoughts around scale as well, but scale is great. When you got a site like ours, that allows you to segment into this e level executives small business owners thirty under thirty community high net worth investors who also happen to spend money on luxury goods. So we've got these different models. We've got the platforms where we're seeing growth in our content solutions with brand voice insights, seeing growth in live. We've got this new growth team to do the skunkworks incubation of new businesses. They're all working right now and what you would sack. 'cause like look everything everything's a trade off rights. You could do a Bloomberg style paywall. I mean it's ten articles right. I mean so like maybe you take like a twenty five percent haircut on, on your on your ad inventory. But you're saying that it's not worth. It's not worth that haircut for right right now we've made the decision that it's not part of the current plan. But again, never say never, I think it's gonna be really interesting over. The course of the next year to see how everybody does certainly apple news plus now on the scene too early to tell it's out there. Lots and lots of publishers are standing pay walls with different types of metered systems. I think everybody's tested. I've heard many of the people on this podcast say that it's too moving target at all times in a year from now, it'll be interesting to see how many of them have been able to build up a large enough subscriber base, that it can stain and be the growth behind their business, and I could be totally wrong, and look, and it's not found money again. It's like you are making a trade off. You're going to have a smaller audience against which to sell ads, which is the core business for many of these companies. That's right. And you need to make an investment you to acquire customers is not just going to happen, organically. So there's the trade off and the investment. And, you know with the rare exception of a few there, aren't too many great success. Stories out there right now. So doesn't mean it won't play out it my but for us at the moment it's just not the strategy guy. Always think, like the, the high end of the market with the New York Times, and the Washington Post and the journal, I guess, like FT like, yes. And the sort of very focused like digital and try other players. But it's always the question about those sort of inbetween that aren't like pure like business expense, and are not like those few that have gotten escape velocity. That's right. That's right. And helped by Trump. Let's face it. Yeah, exactly. And so, you know, I would say you may differ, my point of view. I don't think that that's awes-. You know, I think that we've got a tremendous brand with tremendous global footprint. We have a business model that's working the revenue diversification strategy right now is solid, and the performance has been good. So we are focusing on that. The one area though. That's interesting where we have had a monthly recurring revenue strategy, and we've had it for six or seven years now on Bramlett product, we have and sell tenancy, right? At least to that's exactly right for a monthly flat fee. A brand will be authorized to be able to log into the self published their content. We've heresy heresy was I've got the headlines. I have a slide that I show industry trade conferences, where we just got crushed by the trades when we allow this to happen. Then the second slide that was a few years after that, that was talking about all the benefits the publishers of taking this strategy shootings along the way. Of course you can't go first or early with not without having to suffer a little bit of the, the backlash that comes with it. And it was disruptive times for the industry for sure that point print was still reigning supreme and digital had not yet. Fully taken off. So not only was it more of a digital play. It was a branded content digital play. So it was, it was definitely not without its bumps along the way. But I think we're stronger for it. We now have nine years of institutional knowledge of how to work with brands on how to be their best publishers. Oh. And by the way, our editorial team we've now got over a million pieces of Forbes editorial content that's in our CMS that our product team in our data. Scientists are now tracking their evaluating and they're building tools AI tools into our CMS. That's actually helping people who are using our CMS custom-built CNS that we call birdie as a little nod to our founder. The Forbes from one hundred and two years ago. But the AI tools are now being informed by a million pieces of content and growing by three hundred day that helps these writers become better by being able to help them with headline optimization. SEO optimization wherein when and what in our videos to insert into a piece giving them better diagnostics, on their content so that they can constantly be improving and our Brambles partners who are paying that site license get all of those benefits and can use the platform to write the best possible content that they can, and how many how many brands are brand voice now. So the there's multiple products in brand voice, if you will, there's always on model, which at any point in time is about twelve to fifteen brands then you've got people who do more of an all a cart model with your kind of traditional web host. We video programs. We've got now. Now a suite of profit of products that we call our premium sweet. It's premium posts. So it's a new highly design page. It's intended to be multimedia things that people do it was really birthed out of last year about a year and a half ago or editorial team launched a product called the daily cover story. Of course, Forbes were notorious, I wanna be on the cover of Forbes. There's been great value. It's awesome. It sign of success. If you to be on the cover print, you don't publish as many issues year as you used to. So we now are aditorial team every day of the week publishes what they call a daily cover story. But that needed a much more premium template to be able to publish so that for us to have that brand that depth of journalism that would go into a cover story into displayed digitally. So they created that product we've now taken that product is premium post and applied it to our brand, boys offering and our insights content off. Offering with that. You got a lot of flexibility. You could do a single post. You could do a series of posts. If you get over eight to ten posts or more than we create these hubs that they would all live in all very, very rich in design rich in terms of the amount of content and the multimedia assets that you could put in there. So it's been a real big success story in just a short period of time. So brand voices is not just one thing, it's got a lot of products that fit in there. So final thing is I have to ask about print, what is the role right now for the print product? And then what he said being in five years, so so print for us. Of course, there, there is that credibility that status symbol of being on the cover of Forbes. It is absolutely our front door or cover at digital cover cover cover. Okay, yes, the tangible physical product. It is a big part of our identity and the credit. Ability and the thority that we have, there's still this very ironic thing that happens in the marketplace. Our editors, tell us all the time, they'll reach out to somebody about doing a story and the first thing that they'll say is, is this going to be in the magazine? This is gonna be on the cover. And so they're so digitally minded like company, the irony, the ironic part about it is many of their companies don't run print advertising, but for their interview, that's where they want to be. So we're actually doing reimagined the magazine we just actually saw the mockups today, the new issue that's coming out in June, which is our women's issue, will be the first version of it. We still are continuing to invest in the Evelyn of how it looks what the experiences it's tangible. So it's, it's a real experience for people in different markets. It has different residents because I mean, we always assume every market is, is the same, but it's not our that as a brand. Yes. It's, it's very I mean you go you go to some markets in Europe. And, you know, the median age is like forty eight and you go to in Africa. And it's like seventeen. That's right. That's right. Are different. And it's you know, when you think about our global licenses, we do publish Forbes Asia version, sats, a pan regional and English that serves as sort of the, the backstop for a lot of our local partners. So it's still plays a role in our brand, our brand identity, the thority that we have as a business finance affluent consumer product from a business perspective. Of course, we're facing the same challenges that any other publisher is in the economics of a magazine. How do you make the economics work is, is that I mean like I kinda get the economics when it's like tied to like a thirty under thirty franchise that you can make money off of and so many different ways. That's right. So, so the franchises become key, of course and Forbes has been known for. It's lists, but in a in a credible, there's real metrics, and numbers, crouching and research, and reporting. Other. Yeah. But it is. And, and in a lot of different areas, you know, Forbes will be reference, and the ultimate measure of the world's billionaires in any sports valuations. If you ever see a number against a team that's from us. The under thirty list of Trump is a billionaire. Well, no. We told you that when he claimed nine million was worth just over three. We've always challenged. Published an article yesterday that went back to nineteen ninety referencing that we actually took him off of one of our lists retrospectively as we did deeper investigation into his numbers. And we're able to prove back then that he was actually in the red. And, you know, for we like to think that, and if you look at his coverage and other, you know, we're, we're not getting the Trump bump, in terms of covering the day to day, newsflow. Yeah. We're keeping them, honest or doing our best in terms of, you know, this whole NetWorth thing. And you know as that's one of our core pillars. It's our responsibility to do it. Otherwise list, wouldn't have much credibility. Okay, mark. Thank you. So great to see abroad. And thank you for listening. This podcast is produced by song-ghil, if you liked our show. Please leave us a rating on itunes or wherever you listen to podcasts. Also, you can always Email me. I'm Brian dot com. I'm at MARCY look forward to hearing from you sin. Thanks again back next week with.