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April 30, 2017

What Are They Thinking? Hearst’s Troy Young Makes Scale His Friend

Would you like to make over your kitchen? More than 10 million American households will get a re-do this year, the numbers spiking in the good economy. Then, there are the greater millions of digital lookie- loos, eyeing and envying the kitchen that could be.

Where to look for ideas? Certainly, Hearst’s Country Living offers one alternative. If you’re Hearst, though, why let the content you created for Country Living remain only there, just hoping and praying it gets lots of traffic? Why not put the same content in other places where people might be looking?

So Hearst, as part of its newer, grand embrace of The Distributed World, did that. Logically, it used the same content on its Elle Décor and House Beautiful brands, finding different demographics. Then, it placed the same content, in differing layouts, on Yahoo, Huffington Post, You Tube, AOL On and its Houston Chronicle.

So, in total, the piece racked up more than three million page views; the video almost 300,000.


First published at Capital New York

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Such multiplication is now more the rule than the exception at Hearst Magazines, as Troy Young, president of Hearst Magazines Digital Media, launches into the third year of his tenure.

“We’re making scale a friend,” says Young.

Scale means a lot of things these days. In the recent headlines, it means leveraging everything from Facebook Instant Articles to Snapchat’s Discover to Apple News—as the wider, wider world of distribution unfolds. In reach, it means embracing the boundaries of the globe, rather than those of North America. In technology and content, it means a revolution in how brands as big, diverse and set in their long-successful ways as Hearst’s 21 U.S. magazines do their daily work.

Young, a 47-year-old veteran of start-up Say Media and digital agency Organic, filled in the color on Hearst’s scale transformation, when we talked after his recent presentation to the World New Media Congress in Washington, D.C., which I moderated.

He warmed up the international crowd with the memorable scene from The 40-Year-Old Virgin in which Steve Carrell gets quite painfully man-waxed.

He said he identified with the pain, seeing what he saw upon his arrival.

“Each of our 19 brands had their own strategy, their own platform and then multiply that by 20 as you roll that all over that world,” he told me.

Time to market was glacial, while the ever-mounting competition proceeded apace.

“While we are fragmented by brand and geography, we are confronted and competing against global one touch platforms. If Facebook wants to open operations in Germany, they turn on Facebook and add sales. They are in the market. That’s very different that the complex business we manage around the world.”

Ah, simplification, in the midst of plenty, plenty of content and plenty of legacy culture. The Hearst transformation is still taking shape at this point, but talks with Young and Hearst Corporate C.T.O. Phil Wiser point to how much is changing, and how quickly. At its core, the Hearst transformation recognizes the power of reach—and harnesses it two ways.

The company both embraces this widening, and currently contentious, world of distribution and is beginning to make smarter use of the assets within, across the wide range of Hearst magazine, newspaper, TV, B2B and other businesses.

That’s a huge change for a 125-year-old company that has smartly diversified beyond those William Randolph Hearst roots. From its early cable investments to more than five dozen digital venture investments, Hearst, traditionally a quite private company, is now in near-total remake. Long known as a siloed media company, it is betting that its collectivizing farm will pay the dividends of the future.

Let’s look at Hearst’s thinking, based on five fundamental beliefs:

A distinct brand doesn’t require a distinct template or platform: Legacy companies with multiple properties—think everyone from Hearst to newspaper chains like Gannett and Tribune—have spent too much time thinking about what’s national, what’s local and how to mix and match the two. As Young makes the point about Facebook’s (and Google’s, and Buzzfeed’s and Huffington Post’s) ability to iterate new sites and product changes through a single system approach, the numbers at Hearst Magazines remains striking. Eighty templates were, until recently, used to produce the magazine’s digital products. Now, three are used. Colors can change, and, of course, art relevant to the magazine brand, but the template simplicity leads the way.

Beyond templates, the simplicity of the platform—built to drive social sharing—propels headline-writing and art selection, among other baiting factors. Cosmopolitan, a tentpole of the Hearst Magazines, led the early work. In 20 months, says Young, it almost quadrupled U.S. unique visitors to 35 million from nine million. For the latest month, Hearst Magazines, overall, counted 131 million unique visitors.

“Our 18 properties now operate as a single unit,” Young told me. That single unit roots itself in Media OS, a singular platform. It melds together the work of the “studios”—editorial and advertising—and is designed to distribute immediately and thoroughly to the audiences and partners that make the most sense. “Data powers every aspect of our business,” and that power is represented in the Media OS platform, including a loop of reader experience data affecting real-time presentation and reader recommendations.

Media OS’s success means it is now being exported beyond its magazine division, to its other sectors. “That’s in the early innings,” says Wiser.

Young: “Increasingly our businesses look the same. Cable, magazines, newspaper, TV. We are all meeting in one place, the delivery of content on mobile platform.”

One bonus of that approach: 20 percent of Hearst magazine content is now used by more than one magazine brand. The company has paid for the content once, and can now repurpose it internally.

If this be cannibalization, chew widely: Troy Young is gung-ho on working the wide distribution universe. He’s signed up several Hearst magazines for Apple News, and Cosmopolitan won one of the 12 prime spots in Snapchat’s Discover tray. Snapchat already serves as one of the top three traffic drivers to Cosmo, almost two million unique visitors a day, says Young. (That’s the same kind of outsized performance Mail Online’s Jon Steinberg pointed to at the D.C. conference. He said Snapchat had become Mail Online’s second greatest traffic driver.)

So, I asked Young the question of the day, as publishers debate the promise and peril of all the distribution plays rolling out.

How worried are you about cannibalizing Hearst’s core digital business, which includes a big emphasis on selling digital-only subscriptions?

“It’s a different business. In one case, you are touching 150 million people a month,” he answered, noting how far flung those customers are to be found away from magazine print pages, sites and apps.

“In the other case, you manage a paid relationship with far fewer people. The only thing you would be foolish to do is to not play by rules of the medium. There are a lot of brands that are building content products in a free marketplace. It is very hard to get perfect data about how one is cannibalizing the other.”

How much can a company like Hearst do to ease fears of cannibalization, of those Facebook and Apple deals eating into new digital subscribers and great page view growth? Only some, he says.

While Hearst, like its top-performing peers, invests heavily in data science and analytics, tracking leakage of core readers and subscribers against the new deals isn’t largely possible. Hearst’s own customer data doesn’t quite match up the kind of more anonymous data it can track from the open web. It’s a lack of “P.I.I.,” that personally identifiable information that privacy advocates of course hold dear, that makes the matching tough.

Hearst’s corporate Chief Technology Officer Phil Wiser provides a wide view of that state of the art. “Multi-device targeting that allows us to understand you are, across devices” isn’t yet delivering the kind of results publishers would like to see. It’s not improving a lot. It’s still not clear anyone has delivered a solution on that.” So, the view of readers that wide distribution now provides is at best a partial one, circa 2015.

Still, the risk-reward ratio is clear to Young. Companies must play the distribution game, he believes, even as they pursue their own branded plays, learning more and more, for instance about what kinds of experiences for which customers will pay them directly.

The organization duopoly breaks down: What are most traditional publishers, but a mix of editorial and advertising, with the support functions of production, finance and physical distribution essential but subordinate? It’s an “organizational duopoly,” said Young, offering an interesting outsider’s point of view. Now, given the demands of digital, Young says any future-oriented operation must think of itself as a five-pronged one. He adds: “product,” “technology” and “audience” to the mix.

“Our editors can no longer just think just about content,” he said. “Content now equals content plus distribution. They have to think about how content moves.”

“Months have shifted to moments”: If Hearst’s editors worked on monthly schedules, and way ahead of pub date, now it’s the now that drives so much of the business. That’s one major mindset morph, says Young. ”What’s important is what’s happening within social media environments.”

In his presentation, he sums up so much change in one slide, below.

With one column devoted to Disruptors and the other to Traditional Media, it neatly describes 10 major shifts of this moment, and provides plenty to spark discussion in any content shop.

If you are national, you’re global: Take an old, reliable magazine story, “12 Sex Things Men Don’t Care About.” Seven hundred thirty-five words in 12 pointers, and as good a piece of clickbait as Buzzfeed could invent. In the U.S., it drew 1.8 million page views (no slide show), but globally, it generated another 8.4 million. That more than a 4X multiplier, and good proxy of why the “produce once, distribute many” revolution is so compelling to those funding newer media. It costs virtually nothing extra to gain that audience—once you’ve got a platform designed to exploit it. Hearst has always been a major global player – in print, now publishing close to 300 international editions. Like its magazine peers, it has found great licensing revenue in its core brands. Now, global digital reach creates a big opportunity, and greatly raises the margins on its investments. (Let’s note that Integrated Whale Media Investments acquisition of a majority stake in Forbes last summer is based on similar appreciation.)

First-party data rules: Few media companies have the range of assets Hearst brings to the new data table.

Phil Wiser offers a good example of what the company is beginning to be able to do.

“Let’s say Honda dealers in northern California want to target young women 25-40 for a new convertible. We can find those women not only on SF Gate (the main site of Hearst’s San Francisco Chronicle), and on Cosmo. Then, we’ll pull the KCRA [TV] audience in Sacramento for people who are coming back and forth. And we’ll pull in the Santa Cruz–Monterey that is engaged with the two local television stations that we have done there. We can overlap those and we can target those.”

That kind of first-party usage is one that all major media companies try to harness; Hearst just has a bigger playing field upon which to draw.

Finally, there’s that old standby of content companies: content. Says Wiser, “We have not only the audience data, but we have every piece of content that’s being created all over Hearst for last 20 years. I have machines reading it and interpreting it, matching that up against the audience right now.” For the first 25 years of the web, that kind of contextual content placement has fallen short. Perhaps, with the tech now available, legacy content companies will be able to leverage what should long have been an advantage unique to them: medium–long-tail content presented appropriately with today’s news.

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