How Do You Amass A “Fortune” And Learn To Hang Onto It In this Digital Age Of Uncertainty? A Conversation With Andy Serwer, Managing Editor, Fortune Magazine. The Mr. Magazine™ Interview.October 11, 2013
Sit back and count yourself “Fortunate” as you enjoy Andy Serwer and Mr. Magazine™ as they ponder the bliss that is Fortune!
When the economy busted in 2009, magazines in general were hit hard, and business magazines specifically were hit even harder. And if the economy bust was not enough, the digital burst landed with a bang in and around the media business. Publishers could not tell whether to blame the economy or the technology for the decline in the magazine business. Fortune magazine is used to bad times. It was born in the worst of times. So, if anyone knows how to adapt to the bad times, Fortune should be the one.
The man behind Fortune is Andy Serwer, the magazine’s managing editor (i.e., editor of the magazine in Time Inc. lingo). Andy was my guest at the CPR for Magazine Media in New York City last month. I conducted a morning conversation with Andy at the event. What follows are the sound-bites of this conversation followed by the entire lightly edited transcript of the entire conversation. The conversation is engaging and lengthy, so feel free to print the blog, grab a class of wine and enjoy reading the fortunes of the man behind Fortune.
First the sound-bites:
On how Fortune magazine has managed to withstand tough times and be “Fortunate” enough to still be around: I think this, maybe speaks to perseverance and staying with it and understanding if you have premium content and you really stick to your guns and stick to your knitting you can be successful.
On the “reinvention” of Fortune: One thing that I’ve come to realize in this transition to digital is that there doesn’t seem to be a silver bullet and if you’re sitting there waiting for something to happen, to come along, to totally transform this business, to make everything OK then forget about it.
On the steps it took to reinvent Fortune: We looked at our strengths and our opportunities and we tried to match them up and proceed. One thing we have at Fortune for instance, right away I realized, were these franchises — these sorts of brands within brands, and I think those are very important and I’ll explain.
On the role of an editor in today’s magazine media world: Now I have a challenging magazine environment, I’ve got this digital platform, which is really hard to figure out and of course there’s digital dimes and nickels versus print dollars and trying to get people to do that.
On being “spun off” by Time-Warner and the future of Fortune magazine: I think it’s a great thing that we’re being spun off. We were a little tail on a big media company dog.
On the added duties of journalists today and the amount of time they have to complete it all: I think about that every second of the day and I think about my personnel and it’s really tough because I’m scared about burning them out.
On what keeps him up at night: All of the above. I actually have been sleeping less well over the past three years. There is just so much.
On his disdain for special issues of magazines: “…I’m not big on special issues. I don’t like special issues — like “the food issue.” Some people like them, but I happen to not like them. This is purely as a consumer. The New Yorker is a magazine that I admire, but when they do a special issue, I’m frankly a lot less interested. I like the curated, general interest of each magazine.”
On the brand dilution that has stemmed from the Fortune/CNN Money partnership: That’s an interesting question. CNN Money, that kind of speaks to the difficulty of building a brand. CNN Money doesn’t’ have the same brand power that Fortune does. You’re putting together a joint venture and slapping a name on it. That’s not really brand building.
On what worries him about as the responsibilities of a journalist increase: I think about that every second of the day and I think about my personnel and it’s really tough because I’m scared about burning them out.
On the role of advertising in magazines: Our magazine, InStyle, Vogue at Condè Nast, Cosmo at Hearst — they’re all putting out their biggest issues ever. Why is that? Because if you ask a reader of those magazines if they would buy those magazines if there were no ads in it they’d say of course not. Those ads are part of the experience. And advertisers say “Hallelujah!”
And now the lightly edited Mr. Magazine™ interview with Fortune Managing Editor – Andy Serwer.
Samir Husni: When Fortune magazine was launched in the midst of the depression it was the worst time anyone could ever publish a business magazine. Henry Luce published Fortune and charged a $1 cover price when everything else was calling for five cents and 10 cents. Is there a good time to publish a magazine and what can you tell us about the beginning of Fortune — how was Fortune fortunate to launch in the worst of economic times and still be with us after all these years?
Andy Serwer: First of all to give you a little color on that launch, if anyone cares about Great Depression launches of magazines, it’s interesting because you have to remember leading up to that we were in a great economic boom. The stock market was going like crazy and there were the flappers and all that. And so it seemed like a great time to launch a new magazine, particularly a new business magazine in 1928-29 when the business plan was put together.
So, Henry Luce got a great response initially in 1929. The fall of 1929 came and there was a very serious stock market crash and his backers and bankers asked him if he was sure he wanted to go ahead with this because it looked like things had gotten rocky all of a sudden. And Luce reportedly said he thought it would pass, you know it’s just a little hiccup in the market. The first thing always looks like a little bit of a hiccup and that’s what he thought.
So they decided to launch in February of 1930. At that point, you don’t see that you’re heading into the teeth of The Great Depression. Had he known that, maybe he wouldn’t have been so brave.
But he didn’t know that. Fortunately he went ahead and launched. Yes, indeed it was a dollar an issue or $10 for an annual subscription. It was a monthly back then. Obviously things just got worse and worse. Back then of course the top one percent or 10 percent was still doing OK which is primarily what the magazine was targeted to at that point.
While it was tough sledding it wasn’t impossible. It’s interesting because we have an international licensee in Korea which launched Fortune Korea in 2009 and that looked very, very difficult also and we had the same conversation saying, you know we launched in 1930 and you’re launching in 2009. And in fact, Fortune Korea is doing very, very well right now.
I think this, maybe speaks to perseverance and staying with it and understanding if you have premium content and you really stick to your guns and stick to your knitting you can be successful but you’re going to be having a lot of discussion with various constituents saying you shouldn’t do this, you can’t do this, you need to be shutting down, you need to reduce your trim size, you need to go to lesser quality paper, you need to go to cut your frequency, you need to fire your journalists, you need to reduce costs, you need to cut costs and maybe you need to shut this down. And you’re going to constantly hear this kind of stuff.
And in fact I’m sure that people hear those kinds of comments and get in those kinds of discussions all the time right now. So, the environment is tough and you pick and choose because I think in some instances compromise is the right thing to do but you really have to understand who’s reading your magazine and who’s advertising your magazine and does it make sense when people ask you to make those compromises.
SH: You had the same opportunity when you became editor of Fortune and then when the economic crisis or when the economy busted in 2009, but yet you were able to reinvent Fortune. We see all the numbers — your circulation is up, there’s your global edition, you’re all over the world and your brand is as solid as it was back then. The storm has passed. How did you go through the reinvention of Fortune and how did you survive the business and economic meltdown of 2009?
AS: Well, it really was a trial by fire and it was kind of like holy what a great thing when I became editor of this magazine in 2006 and then afterwards it became obvious pretty quickly that there were some ants at the picnic to put it mildly.
What happened, of course, is that we’re going through this secular change which is to say the transition to digital that all of us are going through, and at the same time there was a cyclical downturn which is to say 2009 was very, very difficult. And frankly our costs were out of line and our business side and the other side — we probably weren’t paying as much attention as we should to our cost bases. And we did have to cut back.
One thing that I’ve come to realize in this transition to digital is that there doesn’t seem to be a silver bullet and if you’re sitting there waiting for something to happen, to come along, to totally transform this business, to make everything ok then forget about it.
I think what made us think that this might be possible is I looked at the music business and I said OK the music business was in crisis and terrible turmoil and then Steve Jobs just poof came up with iTunes. Now, iTunes wreaked a lot of havoc on the legacy music companies, but it did reinvent the music business onto the digital platform and successfully transitioned there.
Now, since iTunes there have been new business models such as Spotify and Pandora, but that was the great demarcation point to turn that business into a digital platform and move forward.
For print it just doesn’t seem that easy, does it? Off course, Apple is doing its thing, Amazon’s doing its thing, Flipboard is doing its thing, Pulse is doing its thing and it makes it very, very complicated for all of us because there are a million different choices and a million opportunities.
But what it means is instead of waiting for one lightning bolt to come out of the sky you have got to do a million things right — both on the editorial side and the publishing side. It’s just like what they used to say is old Big Ten football, like three yards and a cloud of dust: Just keep grinding and going forward and making a lot of decisions.
I think focus is a very, very important thing because you are going to be faced with just a huge array of choices, you know, because like I said the Pulse people are going to come in your office and say you need four people at your magazine working on Pulse. It’s like, well maybe you don’t, but they’re going to convince you that you need to. Anyway, what we tried to do is to just do a million different things. So, focus and try to do a lot of things right.
SH: Can you take us through the reinvention process? How can you take those one million things and put them in maybe four or five steps for someone if they’re trying to reinvent their magazine and they were hit by this double whammy, the economy bust and the technology burst? What should an editor do — how did you do it?
AS: We looked at our strengths and our opportunities and we tried to match them up and proceed. One thing we have at Fortune for instance, right away I realized, were these franchises — these sorts of brands within brands, and I think those are very important and I’ll explain.
So our franchises at Fortune include the Fortune 500, which is the largest 500 companies in the US and we have the Global 500, which is the list of the 500 largest global companies.
The Fortune 500 is actually a stronger brand than Fortune. A lot of times I’ll get in a taxi cab in a city and a cab driver will ask me what I do. And I’ll say I’m editor of Fortune and they’ll always say “oh Fortune 500.” So boy what can you do with that?
And besides that we had other franchises as well. Our most powerful women’s franchise is incredibly powerful and growing. Best company to work for, most admired companies, 40 under 40, 40 hottest business leaders under 40 years of age.
And what I realized is that we needed to grow these franchises and really push them out on digital platforms and then also something we’ve been very strong in as well are live event conferences.
So we tried to make sure that we have these three platforms, magazine, platforms and live events and then drive advertising across all three platforms. So when someone is sponsoring one of our live events, we would also encourage them to also buy advertising in the magazine and on our website as well.
The other thing is, we’re not at 18 issues a year and I want to make sure that every issue has one of these franchises. I’m not talking about special issues — I’m not big on special issues. I don’t like special issues — like “the food issue.” Some people like them, but I happen to not like them. This is purely as a consumer. The New Yorker is a magazine that I admire, but when they do a special issue, I’m frankly a lot less interested. I like the curated, general interest of each magazine.
But to have a franchise like our “40 Under 40” in our magazine — which drives advertising into the magazine — advertisers want to not only be close to that particular section, that particular franchise, but then what happens is they’ll just want to be in that issue overall and that’s where you really hit the sweet spot because then you’re able to do all kinds of edit. Of course, advertisers more and more want sponsored edit — edit they are closer to — and I’m sure that’s something we’ll be talking about today.
SM: You’ve been named one of the leading business journalists in the country from a journalism point of view. How have all these things impacted the role of an editor of a magazine? Did it take away from the journalism skills and make you compromise a little bit or is this the best time of your life as the editor of a magazine?
AS: Well, I’m busy I’ll tell you that. You know, and I talk a lot to the editor in chief of Time Incorporated, it was a guy named John Huey who recently left after serving a number of years. And he was editor of Fortune in the late 1990’s, which was an incredible time for Fortune and for many magazines in general. That was the tech boom and we were getting so many ads at that point that literally, and I was a writer at that point, they’d send us out to do more stories because we had too many ads. It was just mind boggling. At one point, we actually had to just put out a whole special issue and we just kind of called it the digital issue.
What was happening back then, just as a quick aside, is that during the tech boom these companies would get funding from say Kleiner Perkins, the big venture capital firm in the Bay Area in Palo Alto, and they’d get their round of $50 million of funding and they’d look at John Doerr, who’s the head of Kleiner Perkins, and they’d say, “what should we do?” And John would say go brand yourself and then we’d have an ad salesmen right at the door as they walked out. Literally that’s how it worked.
It was pretty amazing — Food Puppet, Sock Puppet, Web Van, I mean all these companies that don’t exist anymore, were advertising in the magazine. Basically there wasn’t a real Web at that point, there wasn’t much of a Web business, so it was really you’re putting out a magazine with all these ads.
So I talked to John about it and how quickly things have changed. Now I have a challenging magazine environment, I’ve got this digital platform, which is really hard to figure out and of course there’s digital dimes and nickels versus print dollars and trying to get people to do that. The live events business that we do now has gotten much, much bigger so we’re doing events in China, Europe, multiple events in the United States and that’s very time consuming and complicated.
Back in the 1990’s a guy was running a magazine and now we’re running a magazine, live events and digital. That’s one thing.
The second layer is sort of the transition to digital and doing that whole change over which kind of forms everything I do everyday. Right now, the third layer for us at Time Incorporated is that we’re being spun off from Time Warner which is another level of complexity as well that I hope none of you have to go as you’re simultaneously trying to run your magazines and your websites because it’s like playing a game of 3D chess against Mr. Spock. It’s like whoa. But you know we’re doing the best we can.
SH: I know this is like a segue, and we’ll go back to Fortune the brand, but since you’ve been spun off by Time Warner it’s my understanding that you’ve interviewed the new CEO, Joe Ripp at Time Inc. What can you tell us about where you are heading? Where is Time Inc. heading? That’s the 800-pound gorilla sitting in this room… What’s going to happen to Time Inc. and what’s going to happen to Fortune?
AS: I did interview Joe Ripp, the new CEO, at something called our quarterly management meeting, which is exactly what it sounds like. I think it’s 200 of the top executives of the company and we meet every quarter. I did a live interview with Joe in front of the group. It was actually a lot of fun and it was very refreshing. I will say this: Joe is our fifth CEO in three years. I mean that’s a lot of turnover as we say in the old county. So, it’s good to have some stability.
Joe worked in the company before and then he went into the digital place, into private equity, which is sort of a good skill set at this point and comes back somehow. He knows the company really well but he also knows the outside world, which is really great because you can get too insular.
I think it’s a great thing that we’re being spun off. We were a little tail on a big media company dog. And our CEO, actually wisely from our perspective, took that money and invested it in the Time Warner movie business and HBO and Turner which was probably a wise thing from his perspective because you get a higher return but it meant that our magazine company was somewhat starved for capital and had our hands tied that way.
We’re 10 percent of Time Warner and so we wouldn’t necessarily get the attention and love that we needed. Jeff Bewkes, the CEO of Time Warner, made it very clear he was going to focus the company and get rid of Time Warner Cable, which is just distribution of the cable company, of course AOL which they spun off as well and now we’re the third spin off, the magazine company, and now Time Warner is going to be solely a movie company and television company.
So, we’re going to be an independent public company, which is different and slightly daunting. You talk about some of the other companies — Meredith, Conde Nast and Hearst — they’re private and you could make the argument that it’s a good thing to be private during the transition that we’re all going through because it requires a longer time frame and the the public markets usually not so good with being patient that way.
But we all recognize that on the other hand I think it’s going to be great to have the visibility and the discipline because I think some of those companies that I’ve mentioned previously have suffered from a lack of discipline and you can make that case I think about Condé Nast, maybe in particular, and maybe Hearst, but I would say that about Condé Nast — perhaps they’re maybe getting their ducks in a row now.
But we’re going to be under the microscope and scrutinized and the decisions that we make, we’re going to be held accountable for those decisions. And I think there will be some good that will come from that.
It’s definitely good that we’re not going to be shipping our money up to Columbus Circle, which is where Time Warner is headquartered and we’ll be able to invest in our own things. I’m very excited for instance to be able to build out our website and our digital business. We have had a joint venture with CNN so that Fortune has been under the umbrella of a joint venture called CNN Money, which has been good on the one hand because it’s provided us with a lot of traffic and dollars that have followed that traffic.
On the other hand, our brand has been very, very sublimated in the digital space so that if you find a Fortune story it will say CNN Money and maybe it’ll sort of say Fortune somewhere, which is not great branding at all. And also having the freedom to tie our website into our tablet a lot more helps from a social perspective, which I think is really increasingly important because I think that’s how people are getting their stories now.
Just to go back as far as Time Inc. and the other titles, we’re going to be this big magazine company. People is the behemoth of our company and they’re already putting forward a lot of new plans in terms of circulation and consumer marketing. Sports Illustrated. Time. InStyle. Real Simple. It’s an incredible stable of properties, so we’re looking forward to going out in the wild blue yonder.
SH: You mentioned the brand dilution and CNN Money. In my trips overseas everyone refers to Fortune as the business magazine but you rarely hear anyone refer to CNN Money. What’s your plan on building the Fortune brand rather than saying Fortune magazine now we are dealing with the Fortune brand that has a magazine — an ink on paper magazine — has the digital. As you see this future coming in the next few months, how are you preparing? How’s that going to change your 24/7?
AS: That’s an interesting question. CNN Money, that kind of speaks to the difficulty of building a brand. CNN Money doesn’t’ have the same brand power that Fortune does. You’re putting together a joint venture and slapping a name on it. That’s not really brand building.
Fortune is 83 almost 84 years old now and how do you build a brand? This is the question that all of face in this room. Again, I think there’s not any magic to it other than just a lot of hard work and you know it’s one of those things like building trust with your consumer’s every day that can unfortunately get ruined really quickly. You look at a certain celebrity chef homemaker persona woman who found her reputation business destroyed very quickly by herself — by her own actions and so you have to be very careful.
You have to be authentic and you have to be honest. You have to do a lot of stuff and you have to spend. I believe marketing is very important. You have to have great journalists and you have to produce. You have to make sure that you’re punching above your weight. That’s something that I really focus on a lot.
For instance, we compete against Bloomberg and Dow Jones and Reuters. These are companies with thousands of journalists — Bloomberg in particular, which now owns Business Week. There are three legacy magazines in my set: Fortune, Forbes and Businessweek and Businessweek is owned by a private equity venture capital firm, Elevation Partners, which Bono from U2 is a part of. I have the opportunity to talk to Bono occasionally and I think it’s kind of funny that his politics don’t match Forbes’ politics, which is something I always remind him of and ask him how comfortable he is about and he kind of says, “I don’t know.”
And then Businessweek is owned by the mayor, Mayor Bloomberg, and when I see Mayor Bloomberg I say, “How’s your little business going Mike?” and he says, “How is your little business magazine going?” so we just go back and forth on that.
The thing about Businessweek is that they don’t have a P&L really — it’s part of a giant company and they don’t make money and that doesn’t seem to bother the mayor but as you know that’s a tough nut to compete against, with someone who doesn’t care whether or not they make money. Wow. I hate that, right? I don’t have that luxury. Bloomberg has a couple thousand journalists. I have scores. That’s who I’m competing against. I always say it’s kind of like Lord of Rings. There are the good guys and there are fewer of the good guys. That’s what I like to tell my staff. It’s inspirational a little bit.
But punching above your waste is very important. You don’t have the opportunity to have six people sit around all day and talk about some story they might do. I mean, we have to go out and get it. Our journalists have to be multimedia, multitalented people nowadays. My ideal journalist is someone who writes, edits, does social, does TV, does live events, hosts live events does things like this, does interviews. That’s a journalist that punches above their waste. And I especially look for someone who does long form journalism. And very few do all those things but if I get people that can do three of those things that’s great. My people are always fortunately thinking about this. So when they go to Europe they’re always multitasking, going out and pushing out the envelope as much as they can. I think all those little things every single day helps branding.
SH: When I have a student coming from Europe or when I visit European companies, they wonder about the layering of our process, where you have a reporter, then a writer and then an editor when they are multitasking — doing the reporting, the editing, the writing of the story, and in some cases in Italy they actually designed your story. My question to you is are we putting more responsibilities on journalists? Are we forcing journalists to be journalists and marketers and videographers and yet we’re not adding a single minute to the day or a single page to the content?
AS: I think about that every second of the day and I think about my personnel and it’s really tough because I’m scared about burning them out. There are two things — there’s bandwidth and there’s conflicts of interest. Those are two things to be concerned about because you mentioned marketers and business journalism is even trickier than most fields, I would say because we are covering our customers.
We write stories about the companies that advertises not only in our magazines but in all of Time Inc. magazines and that’s not lost on some of these companies. From time to time we have written stories that have pissed off major advertisers of Time Inc. You know in the army when you mess up, you don’t have to do pushups, but everyone in the platoon does. There was one in particular that said we’re not going to pull ads from you, we’re going to pull ads from all the other books. I thought that was really pernicious. The other managing editors were a little ticked off. We’re constantly facing those pressures.
If IBM wants someone to do a speech or do a talk even if it’s for free, that’s possibly a real conflict of interest. We have to watch that stuff all the time. Then people don’t have the time to do all this stuff. And then people just fall in love with Twitter. They just fall in love with it. I’m a journalist and I’m just tweeting my life away. That’s great for twitter and I do realize they have an IPO coming up and so they’re really happy that you’re tweeting a lot. But what’s that doing for Fortune magazine?
People are getting pulled in so many directions now. It requires a lot of management and a lot of balance in terms of individual journalists, particularly our tech journalists because they’re just being bombarded with new social media, new platforms and new things to try. They have to keep up with all the other tech journalist sat The Wall Street Journal.
And then there’s a new tech website every week. Verge is really hot right now. Verge is the one this week, and they’re great and they’ve got venture funding and so they don’t have a P&L either. None of these guys have P&Ls because they’re all venture backed and they’re all looking for an exit. Business Insider with Henry Blodget has been very successful, they’ve really grown share, but I don’t think they’re profitable. I don’t think they’re profitable right now. You can ask Henry. Henry at some point is looking to do something with that. Maybe Fortune will buy it. Or maybe like the last time around, Business Insider will buy Fortune. That would be like AOL buying Time Warner. Remember that? Some things like Politico looks like its established itself, and did a pretty interesting and good job. What has Politico done now? Print magazines. I love that they’ve seen it fit to go into print.
SH: Before I open the floor for questions from the audience, I’d like to ask you my typical last question that I ask people I interview: What keeps Andy up at night?
AS: All of the above. I actually have been sleeping less well over the past three years. There is just so much.
I’ve experimented with different things. What do you carry with you to write down ideas? I used to use my phone and take notes on it. I had a bigger notebook, a smaller notebook and a pad. Things just hit me all the time. I swim pretty much every day and that’s where I have all these thoughts, in the pool, and then I was thinking should I bring a notebook to the pool and jump out of the pool. And people would be like, what do you have at the pool? There’s so much.
I’m sorry to be so open ended here. I want this spinoff to go well. I want to make sure that we have the capital to invest in our website. I think Fortune has a great opportunity and I want to make sure that we realize that opportunity by really being a thriving endeavor five years form now. I mean sure we’re going to be around this year and next year but what’s it going to be like in 10 years. I realize that’s my most important job, which is to make sure that when I’m no longer the editor of Fortune that the magazine is a strong sustainable, thriving journalistic enterprise. That’s my most important job. That’s what keeps me up at night.
Questions from the Audience…
Question: I think we all agree that the industry is in a transformation. Some magazines are more advanced in that transformation than others. Meredith with their group of readers is adapting later than some. I’d be very curious to hear where you are in the adaption towards the digital future and if your readers are ahead of the curve or middle of the curve in reading and adapting digitally.
AS: That’s a great question and it’s so vexing and curious and it’s changeable in terms of the continuum of readers who want print versus digital. Let’s take women’s magazines as an example. Our magazine, InStyle, Vogue at Condè Nast, Cosmo at Hearst — they’re all putting out their biggest issues ever. Why is that? Because if you ask a reader of those magazines if they would buy those magazines if there were no ads in it they’d say of course not. Those ads are part of the experience. And advertisers say “Hallelujah!”
I don’t know much about Vogue and Cosmo and InStyle and Glamour — I know a little more about InStyle. If you’re doing the digital stuff there are you so, “Oh my God, we have got to convert all of our readers to digital right now?” because we’re going to close down Vogue right now and everyone’s going to get vogue on their tablet. I don’t think you have the same urgency at all.
I know at InStyle we have a great digital team and they’re doing all kinds of things. If you’re a newspaper you’re at the complete other side of the spectrum. If you’re a newsweekly, you’re closer to the newspapers. If you’re a business magazine, you’re kind of in the middle.
The other thing about business magazines is that we’ve got a tech savvy readership. Most of our readers have several smartphones. Everyone’s got an Apple phone and a Galaxy Note and tablet and an Amazon device so they’re trying everything all the time. Our first instinct is we have to rush into it willy-nilly and we have. Our tablet is fantastic, our tablet app is great and we were fairly early on.
What we discovered early on is that consumers have been a little slower to change over to the tablets and apps than what though. That’s because magazine are a different experience and people are staring at screens all day long to the extent that your magazine is a respite from a screen. That is probably a really important point of differentiation.
Our magazine is information, vital information, but it’s also something you can look at to provide, I don’t know if it’s recreation or relaxation, but a bit of a respite from work even though it’s about business because it’s often long form journalism, where you want to lean back as they say. In terms of us really pushing that way we’ve realized that we need to take it easy a little bit. We need to go very strong but not to lose sleep over the fact that our readers are not converting as fast as we thought because the reason is they like the magazine still.
It’s still the early days as far as the tablet goes and that’s what we’re really talking about versus the website, which is really a different experience. And we’ve realized that the tablet is a different experience from the Web as distinct from the magazine as distinct from live events. You can get Fortune all those ways. And we didn’t talk about mobile, which is a variant from the web and then getting the information on mobile through social which is increasingly how people are getting things like Fortune.
Our referrals, from the “40 Under 40” package for instance, our referrals from Facebook, Twitter and LinkedIn were up year over year, 60 percent 100 percent, and 200 percent. I forget which percent, which goes to which of those three platforms but those are the percentages. So that’s just flying. People read those stories on Facebook, on twitter and on LinkedIn and come to the website that way. So that’s another totally different way.
Question: What percentage of revenue are you getting from your web platforms compared to print?
AS: Well that’s a slightly complicated question because of the joint venture and the joint venture that we’re unwinding so that the digital revenue — it’s a 50-50 joint venture with CNN Money — so it would be 50 percent of the joint venture and then the tablet revenue which is fairly small still is all ours. On a percentage basis revenue, I would say it’s about 25 percent. So we’re still getting the bulk of our revenue from print advertising. And the important thing to remember is that the other 75 percent is not all print advertising. It also includes our conferences as well, which is significant. It’s kind of a 3-way split there.
Question: I really resonated with what you said when you were talking about the franchise content style versus special issues. I’d appreciate it if you’d like to add a little more color to the concept of franchises and how would somebody in any specific niche look across their community and get those ideas for what’s going to make a really effective series — or I like the word franchise — or ongoing content stream that feeds the magazine?
AS: Some of our journalists don’t like franchise because they say it sounds like Wendy’s or something. That’s for the business side maybe. We have these franchises that we now have in every issue. And we have a meeting for – several meetings – but we have one big one lets say three months in advance before it comes out and we’ll be planning the magazine all the time. In the meeting, we’ll have people from the pub side, media relations side, web side, print side and our event side. We’ll take this “40 Under 40” thing and it’s on my mind because it’s the issue that’s currently out. So, we want to blow it out across all of our platforms.
First of all you have to come up with your idea, and I can’t come up with your idea, but so you want to have it in the magazine, you want to have it on the website, and we want to have a live event and we want to get our people on TV talking about it. And so you know with the magazine we’ll do all the usual magazine stuff. What can be a great article? How many sidebars? What are the other articles? What about charts? We’re talking about just all the traditional, great magazine making.
Then we want to do that on the Web. And then we want to have it as a walk up so we’ll have a reader’s poll leading up to the “40 Under 40.” Who do the people who visit the website think are America’s or the world’s “40 under 40 people? We’ll poll CEOs. We’ll poll the previous “40 Under 40s.” We’ll do anything to drive traffic and drive engagement before the franchise itself comes out. When the franchise comes out on the web, you do not just push out the list — you do video, you do photo galleries, you do all kinds of sidebars, all this incredibly creative stuff that wouldn’t necessarily fit in the magazine, but more importantly looks better on the Web or works better on the Web or works better on the tablet.
Our live event, this is our fifth year of having a live event, our “40 Under 40” party. And live events are tricky. You can have a live event and throw money away — which is have a big party. And sometimes that’s the right thing to do. That’s called marketing.
Then you can have a live event sponsored by someone — a liquor company, a hotdog company, Dupont’s local plant in your city. And that’s easy because you just get a bunch of beer, you get a Dupont sign, you get someone from Dupont saying “We’re delighted to be here to sponsor your thing.” And that’s a little harder but not so hard.
But the next step, what we’d like to do is what we call a real conference or live event, is to get people to pay to come and that’s really much more difficult. When you start being able to do that you have two streams of revenue, attendee revenue, which is like readers and you have sponsor revenue, signage and things like that which is like advertising revenue. And we like to build them so you start small. Maybe you start with a party or you start with a sponsorship and eventually you can have attendees come. Maybe you can do these things or maybe you can’t. You have to see and understand who your constituents are and what kind of people read your magazine, etc. We started the “40 under 40” just as a party. Now we have it sponsored. It’s in San Francisco at a hot tech company and we invite the “40 Under 40” people to come. Then we have a live event. Then we tie in the sponsor and all that stuff. Then we try to get the people on TV. Maybe it’s the “40 Under 40” people doing radio interviews, or our journalists on TV. It’s a huge deal.
Question: Two parts. With all the multi-platform formats that you’re now looking for. I ‘m assuming your audience is expanding. Can you identify the people coming to those multi-platforms?
AS: It’s not as different as you would think as far as people coming to our digital platform versus the magazine. Yes, it’s younger and there are more women, which is great. But they are business people and they’re somewhat aspirational. They want to succeed in business. They want to join Fortune 500 companies or work for fortune 500 companies or do business with Fortune 500 companies. They’re interested in Fortune 500 companies.
Because if you’re a business person, it’s pretty hard to do business with a Fortune 500 company as your business grows — as a customer, as a shareholder or as something. But having said that, our typical reader is a 50-year old guy getting on a plane at O’Hare. That used to be our guy. He’d grab our magazine at O’Hare and jump on a United plane to somewhere. And that’s cool. But who we also want to get is the 26-year-old Indian woman PhD from Stanford who works at Google. That’ s who I also really want to get. I think she is. I think increasingly she is. I think it’s more true that she’s more digital and finding the stories. You have to ask yourself if people are really going to go to your website in the morning Be honest with yourself. That’s why the social thing is so important. That’s why you have to create great content and push it out across social because that’s where they’re going to see it. “Holy smokes that’s a cool story. Click.” I think that’s where she’s getting stuff. She’s probably checking — maybe it’s The New York Times maybe it’s the Wall Street Journal. Some of the big companies that aren’t aggregated, they’re producing their own original content, but then also social and maybe some aggregators as well so it is changing.
Question: You made a statement about push and pull. People do not go to your website every morning. But every one of your business people read your email every morning. That’s the first thing they do. So, if you’re pushing to them then you have a greater chance of grabbing their attention at the right moment instead of trying to pull them to your website.
AS: It is hard to pull. It’s interesting if you look at BuzzFeed and young people, it’s hard to do that. The thinking is that if you can continually push out stuff that maybe people will make it a daily habit but it’s unclear.
Question: So you’re really looking at the future of multi-platform readers not so much in our business. Especially now that AAM counts digital subscribers that we can save money paper on ink if you’re a digital subscriber but you’re after the multi-platform?
AS: Yes, I am. For right now I really feel good about having three legs: the magazine, digital — and digital is everything, it’s very complicated — and our conferences, our live events and maybe that’s not something that not all of you can do and it’s not so big for us but it’s actually very profitable.
You have to play and that’s what I’m saying. It’s complicated and there are a lot of moving parts. That may not work for everybody though. Everybody’s got a different thing. Consumer Reports is able to charge money for people going to their website. We talk about pay walls and stuff. You have to realize everyone’s different. There are takeaways and sometimes you have to say no. You watch what Steve Jobs did and it’s like you can’t do that. You can’t park in the handicap parking space, and not have a board of directors that you answer to, and be a genius and create products that change the world. I mean it’s amazing what he did, but you can’t necessarily do that. There are some things you can take away from him but not everything.
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