Bloomberg Media planning big strategy shift
h f BLOOMBERG
Media is pivoting, trying to turn at least part of its business into an ad agency and marketing firm because its traditional media operations — which include the slumping Bloomberg Businessweek and cable TV channel — are falling short of revenue goals so far this year.
A big change comes from the arrival of Andrew Benett — from ad agency giant Havas — who was recruited as the global chief commercial officer several weeks ago. A casualty of his arrival was Steve Feuling, who joined as global head of marketing services in October and was bounced several weeks ago with the arrival of the former Havas CEO.
“We really think we’ve created a model for the future,” said Bloomberg Media CEO Justin Smith, who said his division is “all in” on the new ad agency and consulting model.
As part of the changes, up to two dozen traditional ad sales people were out of jobs in recent days, including at least three group ad directors: David Bickford in New York; Jack Vincent in Los Angeles and Leslie MacCullum in Washington, DC.
The global chief revenue officer, Keith Grossman, who once reported to Chief Operating Officer Jacki Kelley, now reports to Benett as part of the sweeping overhaul.
Grossman clearly was feeling the heat in recent weeks. Sources say he had blasted the East Coast staff with an angry e-mail several weeks ago, pressing that group to stem the yearlong erosion of revenue. He also told them to forget summer hours and ordered them to start reporting to their desks by 7:45 a.m.
“I have sat idly on the sidelines for too long as I have watched the US East territory continue to lose revenue month after month,” he said in an internal e-mail to the US East ad sales staff on July 17 that was obtained this week by Media Ink. “This trend needs to stop. It needs to stop today, and it needs to stop for the month of July.” But it may have missed its mark.
Bloomberg Businessweek, which in January chopped its guaranteed circulation to advertisers from 1 million to 600,000, has seen revenue drop further this year.
In contrast, digital has been growing at a double-digit pace and now is said to account for 50 percent of the ad revenue.
Said Smith: “We are creating an entirely new model of media that will deliver integrated consulting and marketing services in addition to multi-platform media sales.” While he acknowledged there were some staff cuts, he said they would be offset by new hires in Benett’s operation.
Browser block
Google has warned about 700 publishers that their current digital ads would be blocked from reaching consumers under the new Chrome browser system set to be introduced next year that will have much tighter ad-blocking software.
Google is not expected to be the only one tightening its standards. Apple’s Safari, Microsoft’s Internet Explorer and Mozilla’s Firefox, according to one industry executive, all expected to tighten browser standards to keep out the most intrusive ads.
The Coalition for Better Ads, an umbrella organization that formed just over a year ago, has been trying to form standards that will enable the industry to selfregulate.
“One thing that everyone agreed on was that anything that was done [to clean up the ads] must be done under industry auspices,” noted Randall Rothenberg, head of the Interactive Advertising Bureau, which is one of the founding members of the CBA. “Everyone was opposed to individual browser companies implementing their own standards to clean up the bad user experiences,” he said. The one-off approach, he said, would lead to “chaos in the ad market.”
“Google has been very public saying it does not want to do any- thing outside the Coalition,” according to Rothenberg.
Among the 700 sites that are deemed to be in danger of failing the new standards are Forbes, the Los Angeles Times, the Chicago Tribune, the New York Daily News, Kiplinger’s Personal Finance Magazine and others, according to Digiday, which first reported that Google had sent notices to 700 publishers.
The reason advertisers, marketers and publishers would band toggether to police their own ads is to discourage consumers from getting so annoyed with intrusive ads that they turn on ad blockers that stop all advertising. Since the overwhelming majority of sites on the Web today are ad-supported with no paywall, it will be a huge financial problem to publishers if ads are blocked from reaching consumers.
“The Coalition works with entities from across the global digital ad supply chain as the solutions to bad online ad experiences require broad support,” said Brendan McCormick, a spokesman for the coalition.