For years, Meredith was known as the biggest media company you’ve never heard of – but in 2018 all that changed. With the acquisition of Time Inc., Meredith was catapulted into the top position, becoming both the largest magazine company in the United States and the go-to expert on reaching women in the country.
In a session today at the FIPP D2C Summit, Catherine Levene, President, Meredith National Media Group, spoke to James Hewes, President and CEO, FIPP, about which avenues for consumer revenue the company will be exploring under her watch, the continued role for and value of advertising, and where Meredith will focus its expansion efforts in the future.
Shift to focus on National Media Group
Levene began by discussing the company’s recent decision to sell Local Media Group – Meredith’s 17 station-strong television division – to Gray Television for US$2.7 Billion. The move will allow Meredith to focus exclusively on its National Media Group (NMG), which includes iconic magazine brands like People, Better Homes and Gardens, and Parents magazine. These are the titles that reach 95 per cent of US women, Levene explained.
The decision also improves the company’s financial position. The NMG’s revenue streams are made up of consumers (about 50 per cent of revenue) and advertising (the other 50 per cent). “But the digital side gears more towards advertising revenue,” said Levene, “so we see an opportunity to expand more into our consumer revenue streams.”
Revenue diversification is critical
Levene added that revenue diversification in the media business more broadly is critical to success. “We think about this holistically,” she explained. “So not one revenue stream, not two – but three or four.” Levene advises all media brands to think about where they can offer consumers the most value – and then ask, what’s the return for that value?
The role of advertising is growing at Meredith, but consumer revenue is a key part of the diversification strategy that the company embraces. “We have 36 million subscribers, making us the sixth biggest consumer revenue business in the country,” said Levene. What’s more, over two billion emails are sent directly to consumers every month, a number Levene projects will double in the next year. This puts Meredith in the ranks of the largest players when it comes to having an enormous, loyal subscriber base.
Other cornerstones of revenue diversification at Meredith include the performance marketing business – growing 100 per cent year over year – content commerce, and licensing. “Behind Disney, we’re the second largest licensor in the world,” said Levene.
You also don’t want your culture to get ossified, so you stop taking risks.Catherine Levene
Opportunities in consumer revenue
At present, “52 per cent are consumer-related revenues – that’s a really good balance,” said Levene. She sees Meredith expanding in two key areas. One is D2C digital membership and paid products, which may or may not include paywalls: “These are deep areas of value where we can provide extras to those who are willing to pay.”
The second area is consumer products. “We have a lot of brands where we feel we can expand into consumer products, as we have done with Better Homes and Gardens. We’ll be moving more into that direction as well,” said Levene. “It all starts with what the consumer wants – this is what matters most.”
She referenced Meredith’s long-term licensing agreement with Wal-Mart Stores Inc. Products sold at Wal-Mart under the agreement are featured in one of Meredith’s flagship magazines, Better Homes and Gardens. One recent example is Knock Knock, a plant-subscription service developed in collaboration with Scott’s Miracle-Gro, and directed at millennials. Through its data, Meredith identified and targeted this age group as one interested in gardening and developed Knock Knock to appeal to them.
Paywalls: a tailored approach
When it comes to implementing paywalls and advertising, there is no one-size-fits-all at Meredith. It depends completely on the brand. “We always go back to the consumers and the brand: what does this brand need to do to keep delivering for consumers?” said Levene.
A registration wall can sometimes be more valuable than a paywall, because it grows the audience and allows them to identify specific areas of loyalty. From there, products can be developed for those segments and sold to them.
“Sometimes, a paywall is the right solution – and sometimes just at a smaller scale. But not for every brand,” added Levene. Ultimately, she sees paywalls as a publication-by-publication decision, not an industry-wide decision.
Print and advertising still very important
Anyone who has been in the print business has seen how advertising dollars have shifted to other mediums. Levene has found that consumers, however, still want print. “Our print subscriptions are not declining,” said Levene. “We will be printing them for as long as consumers want them, and they will be supported by two revenue streams: advertising and subscriptions.”
“We are not a company that feels a need to abandon advertising as a revenue stream, and we also believe it will come back, in print. Perhaps not at the same level as in its heyday, but it is critically important to supporting businesses like ours, in addition to consumer revenue.”
People magazine, for instance, makes a lot of money through advertising. “We’re very aware of what we have and the trust we have from consumers, but also with marketers trying to reach them. We’re going to do our best for all those constituents, and we’re not going to throw the baby out with the bathwater.”
A registration wall can sometimes be more valuable than a paywall.Catherine Levene
Focus on first-party data
First-party data is a critical part of the Meredith strategy in the near- and long-term future. Meredith has made investments for years in its first-party data collection platform, and reaps the rewards today. “This is how we learn about our consumers,” said Levene.
So many publishers rely on third-party data to know what’s going on in the media ecosystem. The decline in third-party data – after Google announced that they are no longer supporting third-party cookies in Chrome by 2022 – will therefore bring about a lot of changes in the industry at large, but Levene believes that Meredith is well placed to deal with them.
Acquisitions and mergers
Levene anticipates that A&Ms will continue, but it is not easy. There can be challenges with bringing together workplace culture, teams, and other strands of a business.
“People underestimate just how long it takes and how hard it is to consolidate two large companies,” said Levene. The tough bit? “The nitty-gritty of making it work, day to day. That’s where the rubber hits the road.
“It takes time, much longer than people realise, to ensure everyone understands the culture they’re coming into, from the senior leadership team all the way down. You also don’t want your culture to get ossified, so you stop taking risks,” she added.
Collaboration is our secret sauce at Meredith.Catherine Levene
Pandemic and people: everyone rowing in the same boat
“In my view, the people are everything,” said Levene emphatically. “You can have a financial deal, but it’s the people that make it work.”
In Levene’s view, having the right allocation of resources, with everyone rowing in the same boat towards the same aims, is essential. “Collaboration is the secret sauce of the company,” she added. “There’s enough politics outside of Meredith. Internally, we have to work together.”
Meredith did not miss a beat during the pandemic, and a lot of companies can say that, said Levene. A lot of that is because of the strength of the relationships that people have with each other in the company, and the weekly communication by senior members of staff to check they were on the same page.
See the full conversation with Catherine Levene on demand here. Access the full video library for conversations about all aspects of consumer revenue and D2C strategies across the media industry and beyond.