Today’s conversation: Magazine veteran and Football Co North America CEO Jason Wagenheim on why ads on webpages are the new print on magazine pages.
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One of the stories of the year in media has been the unraveling of the pageview model. This has been happening for years, of course, but this year marked an acceleration of the decline. Putting words on webpages to monetize with display ads is not a growth business. Static media is losing in the market to audio and short-form video in particular.
Football Co, which owns several soccer-related properties like Goal, is on this journey. It is ending the year with 30% of its revenue coming from page-driven advertising, down from 40% last year. That will continue to shrink as it focuses on its growing business lines in short-form video and branded content. Branded content, for instance, has grown 25% this year, and should grow even faster in the ramp-up to the World Cup next year.
“Branded content that we create is distributed on all the social platforms on a CPV basis and guaranteed with views and impressions against that,” Football Co North America CEO Jason Wagenheim told me on The Rebooting Show. “That has nothing to do with eyeballs going to our website.”
Jason has seen this movie before. He started his career at the tail end of the good days in the magazine industry, which officially ended with the Great Financial Crisis.
“2010-11 is when things started to really go south. When social went mobile in 2008, I remember looking at everybody at Vanity Fair and going, oh my God, we’re screwed.”
That accelerated as these publications lost their cultural cachet as gatekeepers.
“In 2010-11, Snap, Instagram came online and all of a sudden influencers who were babysitters by day were making videos on YouTube and getting tens of millions of views when we at Teen Vogue and Vogue were barely scraping a million,” Jason said. “We just got beat and got beat quickly.”
Something similar is happening now, only for pageview based businesses that primarily rely on Google for distribution. Many publishers are choosing to live dangerously and rely on traffic from Google Discover. They talk about diversification only they end up spending most of their energies trying to shore up the legacy traffic business.
Publishers will continue to manage the decline of this business, and webpages themselves will still be around, of course. But building a business model around the webpage as an atomic unit – the default for most publishers until now – is a non-starter. That game was lost when publishers lost control over their distribution. The scramble to monetize on the open web led to what any reasonable person would assess as a horror show.
“People are not moving to Instagram because Instagram has better journalists,” Washington Post CTO Vineet Khosla told me in an episode coming on Tuesday. “They are moving because the container is better.”
This echoes what Jason saw at the end of the magazine era. The powerful brands of the time waited too long to overhaul their business models. They dabbled in digital offshoots – Concierge.com, Style.com, et al – rather than overhaul their businesses.
“They ceded culture to brands invented by the internet because they were protecting print,” he said.
A similar unraveling has happened with magazine successors: digitally native brands like Vox Media and Bustle Digital Group, where Jason was CRO prior to Football Co. Vox has considered jettisoning its site-focused business because it is a drag on its faster-growing podcast business. Bustle has transitioned to a services heavy model around legacy magazine brands like Nylon from its page-centric roots.
The strategic dilemma for publishing brands is the need to exert more control over their business models while adapting to changed consumption patterns. It’s easy to go back to the “fish where the fish are” mantra, only it runs counter to the dictum of the need to create direct audience connections. And the trap is publishers are being led into being content wholesalers to tech companies and branded content studios. Those are business models with little in the way of leverage.
The most durable path continues to lie in owned franchises, fronted by talent but with the leverage to swap in new personalities. Football Co has a dozen different shows. “We really think of our IP much like we're programming ESPN or Fox Sports,” he said.
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