Yesterday, the New York Times laid off 68 staffers, mostly on the advertising side, as the company, like all media companies, continues to navigate the devastating impact the coronavirus has had on the business.
In a memo sent to New York Times employees, CEO Mark Thompson and COO Meredith Levien wrote:
The eliminations are taking place in parts of the company that have seen a significant immediate impact from the virus, but they also reflect long-term trends in our business and are fully consistent with the company’s strategy.
The company shuttered Fake Love, its experiential marketing agency it acquired in 2016, as well as laid off members of its NYT Live team. It’s difficult to have events staffers when there are no events. In May, The Atlantic also laid off 68 staffers, with many of them from the company’s Atlantic Live division.
Media companies across the board have seen massive hits to their overall revenue, some up to 50 percent, due to the lack of events. Couple this with declining ad revenue, and it’s hard to be sanguine about where we’re heading. In a post yesterday from MediaPost:
The global advertising economy will shed $70 billion this year and will fall 11.8% (excluding U.S. political advertising) to $517.5 billion, according to the latest forecast by GroupM.
Digiday has research today that found 75 percent of polled publishers say CPMs are down and direct sold advertising revenue has decreased 65 percent (n=127).
With these headwinds, media sales organizations will throw lots of things against the wall (to be fair, media sales orgs throw lots of things against the wall in normal times). The NYT, for instance, according to multiple sources, is undergoing its third sales re-org since 2016, moving many sales directors into operational roles.
“It reeks of management consultancy,” one TBrand source told me.
A second NYT exec told me that the restructuring is “flatter and more like Google/Facebook in our setup, eliminating layers having our senior management closer to the business.”
NYT did not return a request for comment on a series of questions of how the company is viewing TBrand in light of the current media climate or what the job cuts and reorg mean in relation to company strategy mentioned in the memo.
Re-orgs are often a canary in the coalmine, indicating trouble’s afoot. Why fix something if it’s not broken? One area of the industry that seems to be in perpetual reorg status is the publisher content studio.
(Disclosure time: I worked at two “brand studios” - Washington Post and NBC News - during my journalism desert-wandering years.)
One reason for the constant content studio shuffle: they are set up to fail, and the only reason it “works” is because the industry is, as we’ve discussed, run with a “mediocrity by necessity” philosophy.
In the early days of branded content/sponsored content/custom content/content marketing/native advertising, publishers rejoiced at the promise of creating specific content for advertisers. Display ads, we know, don’t work. What does work? Content. Publishers make content every day, the idea went, if we created content bought by advertisers, the money will flow!
In principle, this could be great but as it moves from theory to practice, it often stumbles. In part because the people typically running the show are marketers and salespeople who have a different incentive, if not perspective, of the efficacy of content.
In 2017, Stephanie Losee, who helped start Politico’s branded content studio told Digiday:
“It’s just not a natural thing to have a creative arm inside a sales organization. There’s a natural tension between a product that salespeople can sell that requires an enormous amount of attention and input to execute and another product that’s much more straightforward. That requires a new kind of salesperson who has as much a creative mind and an ability to read a room as make a sale.”
If the idea of sponsored content was to be “editorial but for advertisers” the reality was it morphed into the stories about the brand.
When I was in content studioland, I built a content scale from 1 to 10 that I’d take to clients: 1, the story was about the brand; all the sources were brand execs; the idea was pure advertising; 10, the story was a reported piece of journalism that tied to the company’s brand attributes it was trying to position. Both ends of the scale were still dictated by the client, but the further north you got, the more intellectual freedom the writers had.
My ideal was 10, the sales rep's was 1. Why? Because 1 is a lot easier to sell. I was usually happy if a client came back with a 5; a reported story using a company exec as a “source” but allowed my team the freedom to tell an interesting story.
Of course, the pieces that performed the best were on the higher end of that scale. But it’s a challenge getting advertisers to think that not every piece will be successful.
As one media company leader told me, one of the problems of sponsored content is that the expectations of the deal will be “a homerun.”
Editorial operations pump out hundreds of pieces of content per day. And not every one hits. So say you’re a media company and of the 100 stories you publish, 15 of them get tons of traffic. That’s a great rate for editorial. For advertisers who buy content programs, it’s a disaster.
These programs are often sold based on publisher metrics (pageviews, time on site, social shares, etc) as opposed to traditional advertising metrics (brand lift, awareness or sales), so there’s a disconnect in measuring efficacy.
To lean into the baseball metaphor, that’s strike one.
So if you’re trying to establish a content strategy with the understanding that your sponsored content, which is already seen by the publication’s reader as “less than” editorial content, will mimic editorial content, you’re at a disadvantage.
That’s strike two.
And then throw in the law of averages: in a 10-piece content deal, seven will not hit the goal number, one will far exceed it, and two will toe the line. A .300 batting average is great for a ball player, not so great for an advertiser. (This was where I got to be creative: you put paid social behind the piece that already outperforms to get more pageviews to hit your goal, and from that, you get some nice lift for the other branded content getting served in recirc units. Good old recirc units saved my ass a ton.)
So what happens is that publishers can’t execute on the agreed-upon metrics of the sponsored content campaign, which means they then have to do make-goods, costing them money and time. Managing expectations is the hardest part of the media business.
“Marketers have to embrace the fact that you’re going to strike out more often than you’ll hit a home run,” the media leader said.
However, in spite of all this, publisher custom content studios still have brands knocking on their doors. Some moved away from custom content as their saving grace, and now adopt other forms, like webinars or consultative services. There’s always money in the content banana stand; at least more money than display ads.
At TBrand, for example, “we’re down like everyone else, but still getting lots of brands coming to us for custom content,” said the TBrand source. “It’s hard to tell what’s real and what isn’t in terms of RFPs.”
As publishers are faced with crippling headwinds, perhaps we have to look beyond the reorgs and the shuffles. Subscriber and membership models are gaining steam. Or you can always create lists and awards.
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Bruce Springsteen, “Glory Days”
Some interesting links:
The art of the MacGuffin (ScreenCrush)
Wrongfully Accused by an Algorithm (NYT)
P&G’s remarks for Cannes (P&G)
My Family Saw a Police Car Hit a Kid on Halloween. Then I Learned How NYPD Impunity Works. (ProPublica)
Trump family seeks to block book by president’s niece that calls him ‘World’s Most Dangerous Man’ (WaPo)
Amazon is looking to add live TV to Prime Video (Protocol)
Journalists know news and opinion are separate, but readers often can’t tell the difference (Nieman Lab)