Month: April 2019

You may have heard that a little show called Game of Thrones is returning to HBO on Sunday. From custom Oreos to whiskey to just about any other product that you can think of, winter has come to a slew of brands, which partnered with HBO to drum up interest in the hit show’s eighth…

Agencies have a “can’t live with it, can’t live without it” relationship with Facebook. The world’s second-largest ad platform, which reaches roughly 2.4 billion people, is a must-buy for brands. But a stream of issues around brand safety, misinformation and election integrity have made Facebook a precarious place for a brand to expose itself. Facebook’s… Continue reading »

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“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. Today’s column is written by Paul Dolan, CEO at Varick. The rise of the platform economy has disrupted nearly every industry, but perhaps nowhere have the effects been as evident and widespread as they have in reimagining… Continue reading »

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“The Sell Sider” is a column written by the sell side of the digital media community. Today’s column is written by Michael Weaver, senior vice president of business growth and development at Al Jazeera Media Network. Innovation and disruption are lauded virtues in technology, but they present hard realities in the media business. Today’s publishers… Continue reading »

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A weekly comic strip from AdExchanger that highlights the digital advertising ecosystem… comic

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here. Privacy On A Pedestal As consumer concerns about privacy increase, The New York Times launched “The Privacy Project,” which is investigating changing norms around privacy. One feature asked readers to “draw the line” for what data applications they would approve of from a social… Continue reading »

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Contributor networks swing in and out of fashion in media. But with influencer marketing en vogue and publishers hunting for ways to drive engagement on their properties, the hunt for famous, influential contributors is back on – and it’s giving rise to a new kind of role at business and news publishers.

Quartz has a team of five people, the Quartz Pro Committee, partly responsible for identifying and recruiting people to contribute thoughts and commentary to Quartz’s mobile app. The Washington Post’s brand studio, WP BrandStudio, recently hired a person to attract and cultivate a network of leading executives, experts and authorities, called the Community, which helps create and distribute BrandStudio’s content. Axios has two people working full-time on recruiting, managing subject matter experts to participate in Expert Voices, the news publisher’s year-old, invite-only contributor network.

Though their titles differ and they sit in different corners of publishers’ organizations, their responsibilities for these roles are broadly the same: Find influential people, bring them into a publisher’s orbit, and try to create a symbiotic relationship that allows both publisher and writer to benefit.

“It’s a more sophisticated influencer strategy,” said Meena Thiruvengandam, an audience development consultant. “Rather than just overt marketing, this is about proving that people are really engaged with a product. Everybody’s moving toward engagement, conversation; everybody is asking, ‘How can we give value to our readers?’”

At a high level, these new roles fit into the lineage of audience development and community management, which publishers once embraced as a way to drive engagement on third-party platforms, particularly Facebook.

But lately, publishers lately have become more interested in engaging audiences on their own properties. Publishers such as The Information have discovered that smart commentary from impressive sources can be a great way to build a community that attracts subscribers.

That’s a key reason why Quartz has nearly 70 people, called Quartz Pros, contributing to conversations on its app every week. Its five-person team identifies people, both on and off its mobile app, that it thinks might help drive better conversations around the news shared in the app. The team meets once per month to discuss possible outreach candidates.

The Pros, a mixture of household names and accomplished people in their chosen fields, ranging from Richard Branson to Roger McNamee, are offered the chance to raise their profiles among similarly accomplished people; Pro commentary is foregrounded within the app, and Quartz’s community team regularly sends Pros links to articles or discussions they feel Pros can easily participate in.

In several cases, Pros have managed to build audiences on Quartz’s app far larger than the ones they’ve amassed on other platforms. For example, Philip Lipscy, a professor of political science at Stanford University, has over 75,000 followers on the Quartz app; on Twitter, he has 1,400. Allison Baum, a venture capitalist, has over 93,000 followers on the Quartz app; on Twitter and Medium, she has 1,200.

That offer of a bigger platform has to be good enough because publishers aren’t paying for the influencers’ time and energy. That’s partly out of deference to the publishers’ editorial operations — “Because we may use them as sources one day, we don’t pay them,” Axios communications manager Megan Swiatkowski said — and partly because the offer is framed more as a brand-building opportunity than a paid gig.

“It’s the same reason you’d want to moderate a panel or contribute to an article,” said Annie Granatstein, the head of WP BrandStudio.

In the case of the Community, the BrandStudio’s 45-person group of experts, participants can do everything from offer guidance on what the BrandStudio is producing for a client, to work directly on creating it. The Community’s manager decides who to add to the group partly based on the kinds of proposal requests BrandStudio gets, and partly based on a list of subjects that the Post would like to establish deep expertise in.

Being able to show off an influential audience can be helpful for an emerging media property trying to make its mark among advertisers, said Gila Wilensky, the North American vp of media activation at Essence. Having smart people, particularly if they have big followings on other platforms, makes this not dissimilar to an influencer marketing strategy, Wilensky said.

Over time, however, having influential readers matters less to where an agency will invest its clients’ budgets. “For established brands, the answer is probably not,” Wilensky said, when asked about whether influential readers make a difference when it comes to allocating client budgets. “Your target audience data should be more important.”

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Last July, hours before Univision announced that it was looking to sell Gizmodo Media Group and The Onion, Univision CEO Vincent Sadusky gathered the leadership team at Fusion Media Group, Gizmodo Media Group and The Onion in New York City to break the news. After years of trying to diversify its portfolio beyond Spanish-language television, Univision was going back to its roots. This came a few months after Univision decided to cancel plans for an IPO and installed a new CEO and leadership team — which left no room for the English-language digital properties the broadcaster had acquired and clumsily merged over the years.

“Once you go from an IPO strategy to wanting to position yourself for a potential acquisition, you go from diversification to simplification — and the English-language assets make less sense to you,” said a source who was present during that meeting. “And that was [Sadusky’s] message: We are moving to simplification.”

“But in stereotypical Univision fashion, no one consulted the leadership [at Fusion, Gizmodo or The Onion] on how it would be communicated,” the source continued. “The announcement did not even set them up as something worth buying, there were no stats of the size of the portfolio or the depth of engagement; you’d think they would use this opportunity to pitch why someone should buy these assets.”

Univision once had grand ambitions with its English-language assets. Under the umbrella of Fusion Media Group, which oversaw Gizmodo Media Group and The Onion’s stable of sites, the Spanish-language broadcaster was going to become a diversified media company with a fast-growing digital business. To accomplish this, Univision poured money into both building its own digital media assets under the Fusion brand and acquiring properties in the former Gawker Media properties and The Onion, spending roughly $200 million on the latter two companies, according to three sources familiar with the matter.

Yet the effort was troubled from the start, offering yet another example of a corporate shit show, repleted with competing management cliques, clashing company cultures, ballooning costs and impatient investors. Ultimately, Univision cut bait, reportedly selling off GMG and The Onion for less than $50 million — less than 25 percent of what Univision paid for the properties since 2016.

This story is based on conversations with six current and former executives across Univision and its former digital assets. Univision did not provide an official comment by press time, but representatives pointed to a recent interview from Sadusky during which the executive confirmed about focusing on Univision’s core assets and Hispanic audience, but pushed back against the idea that it’s all in service of a sale of the company.)

Diversifying ahead of a planned IPO
At a time when the drumbeat of bad news about digital media is commonplace, it’s worth remembering the headier times. Back in 2016, traditional media was in a panic, worried about losing share to digital upstarts. More than a few traditional media company had some form of “BuzzFeed envy.” That let stalwarts such as Disney and NBCUniversal to pour a billion dollars into companies such as Vice Media, BuzzFeed and Vox Media. Univision, with its Spanish-language roots, was little different.

Univision’s pivot to digital originally centered on building up Fusion. In 2012, Univision partnered with Disney’s ABC to create Fusion, a news brand originally aimed at English-speaking Hispanic millennials. Fusion’s portfolio includes a website and a cable network. By 2016, Fusion had racked up $60 million in losses, prompting Disney to exit the partnership with Univision buying out full ownership of the Fusion assets.

Then, in 2016, Univision made a splash by paying in the neighborhood of $200 million for GMG and The Onion, which includes the $135 million Univision spent for GMG in a bankruptcy auction and roughly $70 million for The Onion across two separate transactions, according to three sources familiar with the matter.

Now with full ownership of Fusion, Univision created Fusion Media Group, which oversaw the GMG and The Onion as part of a network of sites. This group was led by Isaac Lee, Univision’s chief content officer at the time, and included an executive group at the FMG level led by group CEO Felipe Holguin.

Sources did not question Univision’s strategy of buying and building a diversified portfolio that included websites that users go directly to, growing commerce and branded content businesses, a TV network and other areas such as TV production.

“Univision needed to show that there was a growing business — [former Univision CEO] Randy Falco was selling the promise of the future,” said a source. “Yes, the traditional business was struggling, but this was a way of saying that we have a path for growth with a younger generation — and second and third-generation Hispanics are watching more English-language stuff. With that in mind, the plan made sense.”

Initially, Fusion Media Group was given a long leash by Univision as the company sought to expand audience and revenue. By late 2017, FMG would claim an audience of 110 million across its portfolio. But the company wasn’t profitable, and as pressure mounted at Univision to reverse its own debt ahead of that public offering, tensions started to mount between different parts of the legacy and digital organizations.

An era of mismanagement and clashing cultures
By late 2017, Univision was shopping a minority stake in Fusion Media Group for as much as $200 million. But as the broadcaster swiftly learned, the market for digital media companies had cooled considerably as big publishers such as BuzzFeed and Vice missed their annual revenue targets and other digital publishers were rumored to be for sale.

The era of quick scale was reflected within Fusion Media Group, where there were tensions between different departments that wanted to focus on audience growth (often through distributed platforms such as Facebook) versus those that wanted to focus on revenue growth, particularly on FMG’s own websites, sources said. One employee recalled having meetings with Fusion management that focused on getting video views up; then, a couple of months later, having meetings with the sales organization — led by Onion CEO Mike McAvoy — that wanted to prioritize revenue coming from FMG’s sites. “Cool, but can you guys figure this out?” said the employee.

But there was also a larger issue of growing tension between the parent company and various parts of the new digital media upstart. Following the GMG acquisition, Univision did not give key GMG executives such as Heather Dietrick and Mia Libby “a seat at the table,” sources said. “These are people who were central to that business and knew the brands best but weren’t being brought in on strategy,” said a source. (Dietrick is now CEO of The Daily Beast, where Libby is CRO.)

Univision is an old-school media company, and many of the top FMG executives are classic media operators. Often, this involves a level of bureaucracy that doesn’t mesh with companies that often have only a couple of people in the finance department. GMG also has a famously and fiercely independent culture, which more than one source described as a “pirate ship.” For instance, one former employee recalls an event hosted by Jezebel in Brooklyn. FMG’s marketing team wanted to run some ads promoting the event. The offer was turned down by GMG staffers overseeing the event. “They just wanted to promote your event, why not let them?” said a former employee.

Univision also struggled to bundle its English-language digital assets in sales deals, partially because the broadcaster’s legacy was in bundling digital with TV ad sales for its Spanish-language programming, said another source. “It was a complicated thing to bundle,” this source said.

At the same time, losses were also mounting. With the Fusion Media Group layer, there were new departments and expenses. For instance, FMG had its own teams for marketing, finance and data analytics, sources said. These were also separate — but much nimbler — departments within GMG and The Onion, as well as independent of larger marketing, finance and other teams within the Univision parent company. Executives would also frequently run up expenses for consultants. And this does not even include the losses incurred over the years by Univison from its Fusion cable network.

Last year, GMG and The Onion combined generated roughly $80 to $85 million in overall revenue, according to three sources familiar with the matter. But with all expenses added up, the organization was tens of millions in the red, sources said.

“These two companies were profitable and had decent cultures, and they still ended up losing money because they’re saddled with unnecessary debt,” a source said. “The move by Univision was well-intentioned, but it was poorly executed by a company that did not understand digital media.”

A change in priority and leadership at Univision
Meanwhile, there were mounting tensions within Univision’s boardroom, which one source described as its own “telenovela.”

Investors wanted Univision to go public in a hope to recoup on their investments over the years. Univision has backers that include billionaire Haim Saban and Spanish TV company Televisa, which owns 40 percent of the broadcaster. But as the capital market for media dried up, so too did the prospects of Univision having a successful IPO. By the beginning of 2018, those plans were scrapped.

As all of this was happening in 2017, Univision also reportedly drew interest from potential suitors of its own. There was at least one double-digit billion dollar deal on the table that the board was split on, and ultimately walked away from, sources said.

“You had all of the private equity guys who wanted to get out and maximize profits,” said a source familiar with Univision’s investors. “Then there’s Televisa, which is getting a licensing fee for all of the content they provide to Univision, and doesn’t need Univision to be sold at a high price because it has convertible debt.”

Instead, the new plan was to cut costs across Univision and FMG, which received pushback from FMG executives who defended a business unit that they argued was growing revenues and served as a bright spot for Univision. Univision argued that FMG wasn’t being run efficiently and needed to make cuts. It was a battle that FMG executives lost, and the losses came swiftly as top executives including Holguin and then-GMG CEO Raju Narisetti left the company in the spring. Isaac Lee, who reportedly had become withdrawn from FMG as it became increasingly clear that cuts were coming to the company, soon also left.

Later, Univision wrote off its investments in FMG, GMG and The Onion, claiming a loss of $32.5 million in the fourth quarter of 2018. The company also started actively pursuing a sale of these assets.

A new CEO spells the beginning of the end
Vincent Sadusky was named CEO of Univision in May 2018. Two months later, Univision publicly confirmed that it was looking to sell GMG and The Onion.

“It was the clearest, most frank and honestly most strategic conversation I’ve ever had with anyone at Univision for years,” said a source who was present when Sadusky announced the plans to sell GMG and The Onion. “It was clear that Univision was putting in place a strategy that they thought could get them back on track.”

Almost ironically, once Univision wrote off its investments in the FMG, GMG and The Onion, the company let the GMG and The Onion organizations basically operate on their own, sources said. The focus was more on finding a buyer for the portfolio. “The last nine months were the only time we were left alone,” said a source.

That portfolio, meanwhile, has remained remarkably resilient. The GMG and The Onion sites combined to reach 80.2 million unique visitors in February, according to Comscore. There are questions on how the assets will be managed by its new ownership group and CEO. But there is also optimism that these assets, which were profitable once, can continue to be valuable after a dramatic three years.

For instance, even with all this turmoil, revenue is also on track to at least keep pace with last year’s total, sources said.

“I was always surprised by the Gizmodo assets,” said a source. “With all of the ups and downs they went through, it was still a very resilient property in terms of revenue. It did not grow a lot, but it did not decline either. It maintained, which is amazing.”

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