August 28, 2020
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Why I Have Doubts About Vogue Business

Can consumer media do business media?

I have been thinking about this topic for a while now. In theory, if I run a consumer publication about a specific topic, I should also should be able to offer a business version for people in that industry.

That’s the general thesis behind Vogue Business. People that work in fashion read Vogue, but they also need more in-depth reporting and data. Vogue has the brand, it has reporters all over the world and it already has a supposed baked in audience that would be primed for this.

In the announcement, Wolfgang Blau, president of Condé Nast Internatonal, said:

In a consolidating media landscape, the launch of a new global title is a rare thing. No one else in the world employs more fashion journalists in more places than we do. Our global network of journalists, digital editors and researchers are immersed in the relevant trends on all inhabited continents, giving the team of Vogue Business access to an unparalleled depth of knowledge, from local design trends to changes in manufacturing, training, technology and distribution.

Logically, this makes a lot of sense. Vogue should understand the intricacies of the fashion industry. To expand its coverage for those working in it makes sense.

Why do I bring this up?

I was reading Colin Morrison’s article on “How B2C is melting into B2B” and this jumped out to me:

The process of losing so much of that high-margin, low-accountability, no-response advertising has been painful for publishers, of course. But it now gives B2C media the opportunity to build substantial B2B intelligence services alongside traditional B2C.

Client companies whose relationship with B2C media was once confined to buying advertising are hungrier than ever for the data, relationships – and sales – that these publishers can provide. This melting wall between B2C and B2B creates huge new opportunities for media companies to capitalise (once again) on their brands, content and relationships.

None of this should surprise us, of course. During Covid-19, one of the winners of ad Armageddon has been the B2B digital media companies. B2C media companies that are looking for new sources of revenue are naturally going to seek out opportunities with B2B.

However, just because there might be opportunity, it doesn’t mean that these consumer-first publications are primed to take advantage of it. To be more specific, I would be highly suspicious of this working out for these companies.

Let me explain…

There is a very big difference between reporting on fashion and covering the business of fashion. Going from being a consumer reporter to a business reporter isn’t like flipping a switch. It takes legitimate understanding. Anytime I think otherwise, I return to this tweet:

If you don’t work in supply chain or logistics, the subtly doesn’t matter to you. For most of us, we can use the terms interchangeably and it doesn’t really interfere in the story. However, if you do, you recognize that logistics is part of supply chain, but that supply chain is “making Thing A and moving it to Point B.”

Vogue, with its 128 years of covering fashion from a consumer perspective, now intends on trying to tackle it from a business perspective. It assumes because they have a well known brand, they can cover this new area with ease. But actually serving a niche of fashion professionals with business information requires a different style of reporting.

The unfortunate truth is that the majority of our journalism schools simply don’t teach this type of reporting. Therefore, when students graduate, there is a general intimidation around being a business journalist.

It doesn’t just stop at the reporting, though. Condé Nast has tens of millions of readers. It is a scale game through and through. To illustrate that, consider this… It has a team of people whose sole responsibility is ad arbitrage where it buys cheap traffic with the goal of earning just a little bit more on site. It doesn’t care who the people are so long as they’re earning pennies more than they pay.

When you’re dealing with scale, you think about business in one specific way. Your growth tactics are different. You might spend more time thinking about how to generate more pageviews from social than you would caring about who is actually reading the publication.

When Austin Rief, COO of Morning Brew, and I were talking about the vertical newsletters on the recent episode of the podcast, this came up. With the main newsletter, they are very focused on growth of the newsletter’s subscriber count and the open rates. However, when it comes to the verticals, they look at different KPIs:

We track Retail Brew readers, but we just think about them in very different ways. We really care about who the person is way more for the retail professional, so we want to make sure that they are retail professionals and it’s not just a random Morning Brew reader reading, but someone that really cares and is in the retail profession.

Who matters far more than how many. That’s not to say that B2B publishers don’t want a large audience; many of us are still ad driven and that requires a sizable number of people. It’s just not the primary thing we look at. We would rather a smaller audience of highly focused individuals that need exactly what we have to offer than a larger audience of people.

In the same vein, the types of revenue products and corresponding organizational structures between B2C and B2B are also very different.

For Vogue, it’s going to be selling brand advertising campaigns, which have very fluffy metrics like viewability. There’s no real accountability with these campaigns. On the subscription front, it’s high volume and low price. You can get a full year print subscription for $24.99. That’s less than a single month of The Wall Street Journal.

Vogue Business, on the other hand, will try to sell data licensing agreements in the four to five figures. I wager any advertising will be closely tied to results. Said another way, Vogue Business will actually have to deliver for its ad partners unlike the traditional Vogue.

The type of clients you go after for brand campaigns is fundamentally different than the type of clients buying business, lead gen campaigns. Therefore, it’s a fresh start from that front. And trying to sell enterprise licenses to your platform is dramatically different than trying to get the average person to spend $25 on a year of print magazines. This requires a different mindset from an organizational perspective.

Could Vogue Business get it right? Ask Politico.

So, look… It’s obvious that Vogue is pushing hard to make Business a reality. In an era of cuts everywhere, it is interesting to see them try something new.

But a lot of this goes back to basic company DNA. When you’re used to writing for consumers in the tens of millions with high scale, low accountability advertising and subscription products, it is very hard to pivot to the opposite.

That said, Vogue is doing a couple of things right.

First, the team is separate from the main Vogue publication with its own domain and experience. If it had just been a sub-section of the main Vogue site, it would be competing with Vogue’s primary KPIs. We’d start seeing programmatic ads running on the site and the biggest promotion would go toward getting subscriptions to Vogue magazine.

Second, the actual structure of the team gives me hope. Many of the senior editorial staff are alumni of publications like Business of Fashion, Modern Retail and WWD. These are all business publications that serve very specific niches. This is different than taking a general reporter from Vogue and giving them a business beat to cover.

Ultimately, if we want an idea on how Vogue Business is going to do, we should look to Politico, which has bridged this consumer to business gap almost flawlessly.

It started as a political publication for people in Washington D.C., but it quickly expanded to be a place for all political junkies. A year after launching, it had 3 million readers a month visiting the site. However, over the past 13 years, it has grown to become so much more than just a destination for those obsessed with politics.

It’s a couple years old, but this profile on Politico’s Robert Allbritton is well worth the read. This part jumped out to me:

According to Allbritton, Politico made $113 million globally in 2018, the highest revenue number in its history, and roughly double what the company made five years earlier. Politico, which Allbritton says will turn a profit of around $2 million this year, has grown by decreasing its reliance on paid media. Advertising accounts for slightly less than half of Politico’s revenues. Politico Pro, a business-to-business model, which typically starts at around $10,000 and can run into the mid-six figures depending on how much policy-focused content subscribers want and how many users will be accessing it, now comprises more than 50 percent of revenues, and growing, which enables Politico to maintain a free site—as well as a five-year-old glossy magazine—for general-interest politics junkies. If advertising “were to disappear over the next few years, it wouldn’t kill us by any stretch of the imagination,” Allbritton told me.

No, not really, because the people that we’re trying to reach, the real audience that we’re interested in reaching, that 5,000 to 10,000 really influential folks that are around town, we hit ’em really well in what they’re interested in. And I think the interest in the current administration is—it’s a fascination, but there’s also serious, impactful things that are going on on the Hill, and in the campaigns and things like that.

The first paragraph is that Politico earned close to $60 million in revenue from its low volume, high priced subscription product, Politico Pro. That’s a similar type of business that Vogue Business wants to be in.

The second part focuses in on the actual scale of Politico’s core constituency. While it might have millions of people reading, it really only cares about serving those really important people. It’s not about the how many, but the who they are.

You can imagine a world where Vogue has a decent audience of people that are interested in the inner workings of the fashion business, but the real money comes from the small number of people buying the high-priced subscription.

Adam White from Front Office Sports calls this the prosumer audience. They’re people that might work in adjacent industries or be professionals that have a genuine interest in that specific industry, but don’t actually work in it. This prosumer audience can be monetized in different ways than a truly traditional B2B company.

So, let me sum this up…

Vogue Business is a publication owned by a consumer giant. By and large, these consumer publications are not built to support the business models and types of reporting that B2B publications need. Therefore, I am skeptical that Vogue Business will really be given the latitude to do its thing.

On the other hand, Vogue Business has the right team of professional, business reporters and it is being treated separate from the main Vogue brand. Politico was able to build a profitable business serving both prosumers and industry professionals. If Vogue Business takes from that playbook, it might be onto something.

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