An excerpt from min & Paid Content\'s The State of Digital Media: CondéNet

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FROM THE FRONTLINES :: STEVE SMITH

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An excerpt from min & Paid Content's The State of Digital Media: CondéNet

Location: New York

Principal Web Sites: Style.com, Epicurious.com, Concierge.com,
Wired.com, Men.style.com, Flip.com, Reddit.com, Nutritiondata.com

Key Digital Executives: Sarah Chubb, president; Amy Junger, SVP financial operations; Dee Salomon, SVP sales and marketing; Jamie Pallot, editorial director

Revenue: Specific earnings not disclosed. Revenue growth for 2006 approximately 33% to 35%. Chubb describes the more “mature” properties like Epicurious and Style as profitable and the others as “pretty close.”
Digital Universe: CondéNet’s largest properties include fashion hub Style.com (typically up to 3 million monthly uniques and 90 million page views), food site Epicurious.com (55 million page views serving about 4 million uniques), and Wired.com (21 million page views to 4 million uniques). Its male spin-off from Style.com, Men.style.com, has been one of the fastest growing magazine branded sites of the past two years (30 million page views and 1.1 million uniques).

Infrastructure: CondéNet had approximately 260 staffers in December 2006, about double the size of a year ago. Designed as standalone brands, the CondéNet sites have large, dedicated editorial staffs that produce most of the content for the sites. Style.com puts writers, photographers, and videographers on the ground at most of the major fashions shows around the world for real-time reporting.

Business Plan: CondéNet is unique in the magazine world in having pursued independent Web-only brands online. While sites like Epicurious and Style were tied to Gourmet and Vogue magazine, respectively, they never sought to replicate those brands online. Instead, the CondéNet vision saw the Web as a unique entity that required standalone brands that had the feel and spirit of Condé Nast books. Chubb maintains that the strategy recognized users come to the Web to complete tasks and get service, and that they aren’t necessarily looking for the kinds of experience magazines traditionally offer. The strategy also helped the sites develop formats and tools that were not anchored to print legacies. “You don’t look through the prism of ‘What would the MPA think?’,” Chubb says. “It is very easy to look at what all the other magazines are doing, and that hasn’t been all that relevant.”

In recent years Condé Nast has maintained companion sites for all of its print titles (VanityFair.com, NewYorker.com, etc.), which CondéNet managed. In the past year CN decided to increase the presence of the companion sites and spin the P&L for them off of CondéNet and back into the main publishing business. CondéNet continues to provide many of the same development and technical services for the companion sites, but the individual titles have been staffing up new digital editorial of their own.
CondéNet follows the legacy of Condé Nast in offering a premium platform for advertisers. “We’re not into the volume game of a Yahoo! or NYTimes,” says Chubb. She identifies the chief revenue drivers for the company as big idea selling, the integrated or highly customized ad or marketing plan that best leverages the higher end audience the CondéNet brands target. The company helped bring high-end brands like Nieman Marcus onto the Web for the first time with custom programs that looked more like large magazine layouts than typical Web banners.

Integrated sales work at two levels. Head of corporate ad sales Richard Beckman has an interactive team that sells the major clients across print and online. On the individual magazine level, there were a number of signature promotional projects in 2006 that embody the idea-oriented model. Haagen-Dazs ice cream sponsored a campaign inviting Gourmet and Epicurious readers to discover the next great ice cream flavor for the company.

With Flip.com, CondéNet introduced one of the most innovative and forward-leaning ad models of the year. Advertisers like Nieman Marcus and Vera Wang purchased costly (according to reports) sponsorships that went far beyond the banner model. When new users registered for the site and made their personal profile pages, they chose one of the major advertisers as their profile sponsor, and that client’s ads would be the only ones served on the user’s personal page. In a novel move for a social networking model, Flip.com does not serve advertising in the Flipbooks themselves, but serves interstitials as teens move from book to book. As an alternative to the usual banner ads, the sponsors can add their own branded and non-branded media assets into the library of ready-made media the teens can use to make their flip books. The model is far-sighted in that it recognizes how advertising in a user-generated media world should be more cooperative than interruptive. If teens and others are using online vehicles to express themselves, then the sponsor can give the consumer the tools for doing so rather than intruding on the experience. In a Flipbook, users can incorporate lush images from Vera Wang, and if a user clicks on them, it launches the sponsor’s site. In many cases the sponsors choose not to use obvious branding on their assets. This lower-keyed, cooperative approach to promotion in a UGC world is controversial among sponsors. CondéNet reports that some sponsors had trouble understanding the model let alone the pricing structure for a plan that did not offer a straight CPM. Flip.com did succeed in getting five major launch partners, however, and more that signed on soon afterwards.

This is an excerpt from Chapter 2 (Brand by Brand Magazine Profiles) of min & paid Content's "The State of Digital Media"
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