eMedia Vitals

One in a series of Executive Insights looking at the challenges and opportunities for publishers in 2012.

This has always been my favorite time of year.  In the dark, short days of winter, with the holiday season at our backs, we are able to reflect on our predictions and plans for where we expected the business to go in the year just ended, and compare that to where it actually went. 

A quick review of the last 12 months shows where Hearst Digital nailed it, extracting revenue from digital content in a way that the industry would have been wise to embrace 15 years ago.  Enhanced digital editions of our core titles achieved significant penetration in 2011, and we absolutely expect this to continue in 2012 due to the increasingly rapid adoption of a wider variety of e-reader devices and the deployment of HTML5 across our portfolio.  David Carey, president of Hearst Magazines, anticipates that we will have over 1 million subscribers to digital editions by the end of the year. 

Evolving client needs

Hearst Digital also got it right by relentlessly focusing on evolving client needs in the display space.  As our partners sharpened their pencils on campaign performance requirements, Hearst Digital rose to the occasion by providing thoughtful plans that offer clear demonstrations of performance for paid media while giving our digital audience more compelling methods in which to interact with the retailers and brands they love. 

Recent collaborations like those with J.C. Penney on the Clad and Gifting Grace e-commerce sites are perfect examples of this.  They show how partnerships that create deeply integrated, cross-platform shopping experiences and leverage the direct power of media brands like Esquire and Good Housekeeping result in customer purchases and higher conversion metrics. 

We absolutely expect these types of campaigns to increase in frequency, and recognize that it is a departure from the media/advertiser relationship of old.  This is a definitive move beyond a click-based measurement model, and one that we are excited about. 

Looking ahead, we know that a key challenge for Hearst Digital will be to develop a complete understanding of our audience data.  Gone are the days where reach, frequency and adjacency were considered sufficient to capture the lion’s share of media budget.  We know that the scale of our audience relationships allows us to provide better targeting around demonstrated user behavior that will be increasingly valuable to our advertisers and e-commerce partners. 

Ad exchange opportunities

Hearst Digital will also be exploring the opportunities presented by the increasing sophistication of ad exchange platforms.  We have been in deep conversations with many of the key providers of exchange technology and intend to identify a solution that allows us to capitalize on what we do best – providing advertiser access to an engaged audience that is passionate about the brands representing the subject matter closest to their hearts – while not enabling a race to the bottom on rate and performance reminiscent of the gold rush mentality of the efficiency ad network craze several years ago. 

We believe that exchange technology can be thoughtfully applied to our business in a manner that will allow us to increase sell-through on our most common inventory while allowing our outstanding sales, marketing and product teams to work thoughtfully with clients and partners to deliver the types of deeply integrated and measured solutions expected of custom campaigns. 

So the 2012 outlook looks something like this.  More consumer revenue: check.  Deeper partnerships on more sophisticated advertising programs: check. Command of user data as applied to campaign efficacy: check. Leveraging technology that increases efficiency in media buying while increasing sell-through and freeing up time to focus on our most sophisticated campaign requirements: check. 

Is it a lot to tackle in one year? Maybe. We’ll let you know how we did in 2013.

Grant Whitmore is vice president, digital, Hearst Magazines.