Brian Van Heuverswyn on the Growth of Active Interest Media

Jacob Cohen Donnelly: Why don’t we start at the very beginning. Talk to me about the history of Active Interest Media and how you found yourself ultimately becoming the COO of the business.

Brian Van Heuverswyn: Sure. Active Interest Media has a long and storied, winding history that started with two gentlemen, Andrew Clurman and Ephraim Zimbalist III, affectionately known as Skip, who were the originating founders of Active Interest Media back, gosh, 20-some-odd years ago. They had worked together at Times Mirror and had been around the media industry together for quite a long time. You and your recent endeavors, decided they wanted to work for themselves and went out on their own and started to just acquire brands over time. Built that up with the support of private equity.

I think Andy has told me that they’ve done something in the realm of 70 acquisitions over the last 20 years, which, as you can imagine, is quite a lot. Built the company up to, at its peak, I believe it was about, it was five divisions, including what we currently have today, plus what we called healthy living, active living, and equine. About two and a half years ago, private equity decided that they wanted to divest. Andy took that opportunity and purchased the home and marine divisions outright and is, along with some investors of his own, is the senior, or I guess most, the largest shareholder of AIM and is now operating it privately.

Equine was sold off, healthy living was sold off, and active living. Healthy living and active living went to Pocket Outdoor Media, or what was Pocket and now is outside. Here we are, I came to AIM in 2015 when AIM acquired the company that I worked for, August Home Publishing, based here in Des Moines, Iowa. We were just another one of Maine’s many acquisitions over time and since then, have just seen my role grow and expand, and really happy to be here.

Jacob: When Active did the deal with Outside and Pocket and all that, the idea was to, private equity wanted to be done, they decided to sell off assets and Andy decided to basically buy, for lack of a better phrase, pieces of his own company.

Brian: That’s right. Efectively, yes, to take it, to move away from the private equity model, to go completely private and be the shareholder, if you will, for the remainder of the organization. I will say, nothing against private equity, but I much prefer the privatized version of the company just on the basis of, just different goals and different ideals for the organization. that was pretty much the basics of it.

Jacob: In late 2023, you acquired the Taunton Press. What, why did these assets make sense in AIM’s longer-term strategy?

Brian: Actually, back in 2019, AIM acquired a number of brands from the F&W bankruptcy auction. Two of those brands were Popular Woodworking and Horticulture Magazine, which were at the time well aligned with our pre-existing gardening and woodworking brands, Woodsmith or I guess Garden Gate and Woodsmith Magazine, respectively. We saw Taunton just as a very well-aligned, well-positioned acquisition to allow us to just further our reach into these specific spaces.

We also have, here at AIM, part of our home group is Old House Journal, Period Homes. We’ve got some legacy brands that align really well with the fine home-building model, more on the design side than construction. Just as we looked at it from a home building, woodworking, gardening perspective, it was just a perfect fit for us and allowed us to really own a larger segment of that audience and marketplace, something we feel very strongly we can monetize moving forward.

Jacob: In preparation for this episode, I obviously spent a bunch of time on AIM’s website. There’s print, there’s digital, there’s events, education, marketing services. You’ve got ads and subscriptions. If you had to break down the revenue of Active Interest by category and looking at it from a percentage perspective, what would that look like?

Brian: I would say, we split everything on the home and marine side. Home is, rather than give you percentages, I think maybe I’ll just say the majority of home revenue is direct-to-consumer, whereas in the marine side, it’s reversed. The majority of the revenue there is more advertising and advertising-based and relationship-based with third parties. Does that answer your question?

Jacob: For sure. The home side, you have readers who are giving you guys money.

Brian: Yes, it’s a very strong direct-to-consumer business, whether that’s on the print side, on products, whether that’s digital products or hard goods. Just across the board, the consumers are, they’re very, the demographic is such that they spend very well and they appreciate the content that we create and don’t mind paying for it, which is always nice.

Jacob: Is Active Interest still predominantly a print business?

Brian: I would say still more print than we’d like. I’ll just say that. I was thinking about this the other day. I don’t know what number our print would have to get down to before we would stop saying it’s more print than we’d like. Like everyone, we’re trying to, really diversify the product set and leverage print where we can and really maximize its potential. It’s certainly not going away. In many cases, it’s improving and some of our brands where we’re very nichey and very focused on specific topic, topical areas, but still very print-heavy. Which is good and bad, depending on what corner of the P&L you look at.

Jacob: Let’s dig into that. What makes it good and what makes it bad?

Brian: The bad is obviously, just the inflationary sensitive components. The last two years have been brutal. This year, not so much, not so bad as last year, but just printing and postage and everything, it’s just killer. When you start your budgeting process and before you even– I don’t know how everyone else budgets, but we always start with what we call a BAU, meaning business as usual. If we just rolled last year into this year and made modifications for costs, increases, or decreases, what does that look like? In 2023 especially, print really, really killed us. We had to work really hard to clean up the cost side of the business, drive some new revenue opportunities, and for the most part, we’re able to do that.

Print, just the cost is killer and it’s going to continue to be. We expect that and almost, up to the point where we just, are budgeting for it before we even know what’s happening. The good part of it is that people are still buying it. I think, years ago when the iPad came out and the advent of the digital media age, everyone thought that print was going away and we were in the tipping point of the demise of the print product. What’s held up for us is that’s just not true and people still enjoy our print products.

We’ve made adjustments to frequencies and page counts here and there, paper quality, and trying to reduce frequencies where we can, but improve quality to try and skim off some of those costs, but not at the expense of quality or value to the customer.

Jacob: This might not be the case for your business. What churn of print subscribers have you had to do as costs have gone up?

Brian: I would say our efforts have generally been, I guess I’m not– Maybe clarify your question a little bit for me.

Jacob: At the AMO Summit, one of the things that DotDash’s CEO, Neil Vogel, said was that they have fired plenty of subscribers because they were just losing money on them.

Brian: [chuckles] Right. I think that print is not something that we’re not seeing a tremendous amount of growth across the board at all. In fact, in most cases, we’re seeing a year-over-year decline. What we’re doing there is, as I mentioned, offset that attrition through just the other efforts.

For instance, two years ago, Garden Gate Magazine started a travel business, a tour business, which on its face seems really odd for a media company to be in a business like that. What we found is that our editorial teams are celebrities amongst our magazine files and people are excited to pay a handsome fee to travel into European vacations, if you will, with our editorial teams, and that’s proven to be a nice profitable venture for us. Now, we’re expanding that across other titles.

It’s really trying to diversify away from those cost-heavy products. Fire a few customers where we can. The pricing has been something that we’re going to be dedicating a lot of our time on this year in terms of just really understanding how our print products are priced, and how we can leverage that toward better profitability, and frankly, fewer customers, if at all possible.

Jacob: What has been the process of transitioning from such a print-heavy business to one that is more diversified, both operationally and also culturally?

Brian: Pulling teeth, I would say. It’s tough. I don’t want to in any way speak ill of our teammates here at Active Interest Media. It’s hard for all of us who came up in an industry that back in the day, they were selling ads over drinks and it was such an easier, different time. You didn’t have to work as hard maybe as you do now. It’s really innovation has become a key for us and we try and promote that from the top to the bottom. What are the good ideas that can bubble up and that we can employ to try and leverage moving forward? I mentioned the garden tour business.

That was a program that was the idea for that came up from the Garden Gate Magazine team, the editor, Kristen Bean Sullivan, and Jack Coyier, who’s the own staff photography, had the idea. Now, that’s going to be a seven-figure revenue driver for us now three years into it. Things like that, just really trying to promote out-of-the-box thinking and innovation across the board has really been what we’ve tried to accomplish and what we’ve tried to do.

Jacob: I want to talk a little bit more about people because I find that this often comes up with media companies that have a lot of different brands. How does the team get structured at Active Interest? Does each brand stand on its own or is it all shared services? What does it look like?

Brian: That’s a great and timely question. Historically, and I say historically, up until around middle of the year, last year, AIM was very brand– Each brand has more or less its own autonomy to operate individually. I would say that’s one area that as a company who’s acquired so many other companies, integration is a very difficult thing to do, whether it’s on systems or content management systems and just all the things, CRMs and whatnot. Over time, you find yourself just with these silos of brands that are operating the way they always did.

Last year, we made a strategic decision to really centralize our marketing department and take what was– We had marketing people within the scope of each of the brands or subgroups of brands that we now have rolled up into this singular marketing entity. Then as we acquired Taunton, we brought over a fair number, a large number of their marketing team. Just restructuring that has been a really good thing from a marketing perspective. Editorially, we still run– Brands have quite a lot of autonomy. we are trying to consolidate into these categories, these verticals, such as woodworking, such as gardening, home building, et cetera.

There’s still some work to do, but, it’s a challenge. Particularly when you acquire a company like Taunton where things were always done a certain way and you’re not just going to walk in day one and flip those apple carts upside down. You have to be careful and take care to not impact the larger scope of the business, but while at the same time, mitigating costs and all of that.

This year, I expect we’ll move toward more of a shared services model on the P&L. In fact, not long ago, we had a meeting to really go through all of our allocations and decide who goes where, which is something we’re just going to have to do annually, I think. It’s definitely a tough thing when you’re so acquisition-heavy.

Jacob: You talked about consolidation of brands. How do you think about when, say, two brands should become one? Has that happened at Active Interest or not yet?

Brian: [chuckles] Not in terms of the Taunton acquisition, but we’ve done it many times before. What’s a good example of that? I would say, let me stick to the Taunton brands as an example. Having three gardening magazines as an example, Fine Gardening, Garden Gate, and Horticulture, it’s a tough process. We’re actually in the process right now of looking at, does it make sense for us to continue with these three brands? Do we roll, say, Horticulture up into, Horticulture being the science of gardening, that could be a sub-feature of these other two much more profitable brands?

We could provide some membership or some other opportunities to carve off that deferred income liability, but still, try and maintain the revenue, try to carve out the DI and still, have it be even more profitable than it otherwise would have. We’re actually, it’s funny you mention it, we’re talking about that across the board. we have no intention of shuttering any of the Taunton brands that we acquired.

We said that from the beginning and we’ll hold to that. We’re always looking to– Old Cars Weekly is a good example, a recent example. We had a magazine and then what we had called Old Cars Price Guide. Then we just merged those two together and created a singular product. We’re constantly looking at ways to not only merge brands where it makes sense but cut costs where we can.

Jacob: What about expanding brands or I guess launching new ones? Does Active Interest ever launch entirely new brands?

Brian: Not typically, not really. I would say we’ve done it. It’s been tried. It’s difficult to say the least. We recently relaunched a brand. We had ShopNotes Magazine was a very profitable, another woodworking magazine that we had that had been closed down in 2014. We recently relaunched that as a digital-only product. We’re not terribly excited about launching new cost-heavy print products. Never say never.

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Jacob: You mentioned that the marine, if I’m correctly calling it, that the marine division is primarily ad-based. Talk to me about what are some of the digital ad products that you take into market. Are there any that you and the team are particularly proud of?

Brian: I think that we, our marine team especially, is a very, very strong digital marketing group. They have very strong close relationships with their ad partners, manufacturers, and things of that nature. Really, they do a really great job of combining efforts. For instance, they’ll have an event, and then they’ll combine event sponsorship and promotion with digital. They just do a really good job of listening to and understanding manufacturers’ points of view and providing products that account for that.

More recently, as you might know, we’ve partnered with Omeda to build out a CDP, which is something we’ve never really had before. We’ve already, even though we’re about halfway through on the implementation of that product, we’re already selling data products against that. The own the topic, which is a concept that you hear about a lot. It’s actually gotten off to a pretty quick start. We’re in the process now of identifying some really, what we think will be strong opportunities in the digital space and hope to expand on that.

Jacob: Can you talk about the events business? What are the events that you bring to market? How are they typically monetized?

Brian: Pretty standard, I would say, from a monetization perspective, I’ll just touch on that first. It’s sponsorship, it’s a lot of your typical attendant revenue. The majority of our events are in the marine space. Topical, Trawler Fest, we’ve got a number of different events in the log and timber space and woodworking. We’re working to stand up some events, small events later this year, and a larger woodworking in America event next year. I wouldn’t say we’re terribly groundbreaking in the event space, so much as we’re just trying to bring together these like-minded folks in the niches in the areas of expertise that we operate, and for the most part, have pretty good success with that.

Jacob: Then to continue pushing down the top navigation of AIMs website, you’ve also got an education business where you seem to be selling courses about all sorts of things. Can you talk about how this business works? Do you view it as complimentary or completely independent from the events business?

Brian: I would say it’s mostly independent from the events business, though, there are some integrations here and there. This is one of the topics where, in the acquisition of the Taunton Press, they’ve done a really good job with their, they call it e-learning. We’ve historically called it online education. It’s the same thing. Really, what it is us partnering with either some someone internally, an editor, or someone who has some, popularity and [unintelligible 00:22:51] and industry or some third party creator to come in and basically shoot a course. Then those courses are created based on research that we do with our audiences.

We might figure out that our woodworking audience wants to learn about how to use routers in their shop, things of that nature. We’ll conduct research. We’ll identify who a good instructor would be and we’ll develop a course around it. We’ll shoot it and we’ll promote it, monetize it. It’s something we’ve been doing at AIM for, gosh, probably 10 years or so now. I’ve had quite a lot of success with it. We’ve got quite a– Here in Des Moines, especially, some video space and video studio here in town, along with the photo studio that we can leverage.

As long as it’s something we can have on a set, it’s something we can build out without a lot of costs. Hopefully not, we don’t like to travel too much to do those types of things. It’s been a great business. The events don’t really tie too directly with those, Marine group has a diesel engine repair course that’s done extremely well. Obviously, you’ve got a big boat, you’re out on the high seas and your engine breaks down, it’s something that you can reference and leverage in that time of need. In any case, it’s really independent from the event business.

Jacob: I noticed on the education portion that there was a call to action for an individual to buy access, but also to get it for your team. Is this predominantly an individual revenue driver? Is it more of a B2B play?

Brian: It’s more of a consumer revenue driver. We, I think, had high hopes at certain points in time that we could leverage things more in the B2B space. Some of that has come to fruition. For the most part, it’s a consumer product across the board.

Jacob: What have been the learnings that just what hasn’t worked trying to take it B2B?

Brian: I think that just we’ve had struggles isolating topics. Research doesn’t always pan out. People say they’re interested in the class via survey, but that doesn’t always monetize the way the research says. I think overall, just, we’ve also done some, I will say, from a marketing services perspective, there’s been some e-learning online education courses that we’ve created for advertisers for them specifically to use in there with their audience and with their businesses. Again, that’s been fairly minimal. I think what’s worked is just finding an audience within the consumer marketplace and really driving ahead on that.

Jacob: Part of your responsibility as COO is overseeing technology. Obviously, with so many different brands that you’re responsible for, this can become quite complicated. Talk to me about the technology stack that powers all of Active Interest media.

Brian: Boy, that’s a big question. I’ll try to be brief. We really have, I’m assuming most organizations do the two verticals, the IT infrastructure vertical and the dev and DevOps vertical. IT, it’s pretty normal standard stuff. On the DevOps side, we’ve been actually pretty lucky to– Ashley McDonald, who worked for Taunton, has come over and is now taking over our digital development team and is working very hard right now to isolate areas of need and ways to improve. Due to the acquisition-based nature of AIM, our stack is in need of a lot of support.

We’ve got content management systems probably running four or five of those currently trying to look toward the future where we could make that be a more consistent part of the platform or of our business and moving toward fewer platforms across the board. Stack perspective, we’re moving all of our email marketing and CDP now to Omeda fulfillment at CDS currently, and then, CRM, sales, we’re using Naviga, which is I guess you want to say Zinio, but I can’t remember the parent company for Zinio.

For the most part, it’s a struggle. It’s something that we definitely need to improve. Actually, just talked with Ashley today about trying to combine our AWS accounts for Taunton and AIM and finding savings there. It’s a never-ending story of just finding expenses in the corner and trying to alleviate those.

Jacob: You talked about having multiple different CMSs, for example. Is the is the plan over the next 12 to 18 months, now that you’ve acquired Taunton, to try to move everything to a unified system?

Brian: That is our hope. That is something we would definitely like to do. I will say that it’s a plan that we’re working on. Right now, we don’t have a plan in place. I don’t have a deadline in place for that yet. As you might imagine, there are a lot of moving parts and, over time, again, with all these acquisitions, there’s so much custom software that’s been built and custom plugins and whatnot and figuring out a roadmap for how that looks in, say, a year is difficult, it’s probably going to be more of a three-year plan, if anything.

Jacob: Sure, that makes a lot of sense. I want to come back to subscriptions for a minute because you mentioned this is a big part of the home part of the business. How has AIM managed its subscription business? So many other media companies have struggled to grow subscriptions. A lot of magazines have died, but you have figured out how to keep people engaged, paying, and all of that. What has been the strategy there to not see it drop off a cliff versus just be an incremental decline as you diversify?

Brian: I would say that some of the things I mentioned earlier around really being diligent around page counts, paper quality, frequencies, brand adjacencies. We’re not at all shy about merging brands and making adjustments, where and how we need to. Shuttering brands, we’ve certainly shut down our fair share brands. It’s the marketplace has told us that they should no longer exist and looking to really just diversify that. If we can’t garner as many print dollars as we would have liked, then how can we provide services in other areas to those customers in that topic or range of topics where they find meaningful value and would hope to spend?

I would say, I don’t know that we expect print to be a large growth driver of our business over the long term. It’s more about managing the diversity and managing that attrition in terms of how we monetize that diversity, if that makes sense.

Jacob: For sure. If you look at Active Interest Media over the next three to five years. Where do you see the business?

Brian: I think what you’re going to see is we are very interested in monitoring the marketplace for other acquisition opportunities. I won’t say that we’re going to be aggressive in that space, but we are going to be very opportunistic and look for opportunities there. I would expect that there will be some deals that happen along the way. I think that you’ll see us getting back to, hopefully, to our pre-COVID event mindset, really doubling down on events, doubling down on more digital opportunities, memberships.

Taunton, as I mentioned, the team there, they’ve done a really good job of monetizing their audiences toward memberships and e-learning. That was one of the things that was very interesting to us as we acquired them and how can we take that playbook, if you will, and leverage it across the rest of the organization? I hope that you’ll see some growth in, not only hopefully in print, but also on the membership events and data side of the business. How can we better provide what I call B2B opportunities from an advertising perspective to our advertisers around our consumer data platform.

Jacob: I know you’re in the middle of that exercise right now of getting the data squared away. If we’re sitting in a podcast three years from now, what is the data monetization that you envision making it all worthwhile?

Brian: Actually this year, we’ve budgeted sales numbers against our data platform. We’re not waiting for that exercise to be complete. We’re really pushing to try and educate our sales teams around what’s available. Our marketing team is working to better understand what is available in terms of data opportunities and how we might leverage those. I think that I’m really hopeful that– Listen, I think you look at our business, subscriptions, and advertising, and I’m assuming this is the case for many consumer publishers like us. The lion’s share of our revenues are on the continuity and advertising side of the business.

I think leveraging data to distill our promotions down so that they’re more targeted, don’t hit our email list as quite as hard as we have been. Be more conscious of who’s interested in what, develop research around those learnings, and then develop products and continue to innovate, leverage the content and the expertise that we have in any given space, and drive value and consumer products around those that people want to continue to spend on.

Jacob: As you think about any M&A strategy for AIM going forward, is it, A, deeper publications in the industries that you’ve currently focused on or the topics, B, entirely new categories, or C, all of the above?

Brian: I would say all of the above. We know what we know and we have some what you might call outliers in our portfolio now that don’t necessarily mesh entirely with the broader scope of what we’re trying to do, but that’s okay. As long as we have the expertise and the brand and the ability to deliver from a sales and consumer perspective, we’re okay with that. With the F&W acquisition we acquired, there was a large collectibles portfolio. That was a business we had never been in but that’s shown that just by evidence of that, we’re not scared to delve into new areas and new arenas as long as the profitability and there’s a reasonable expectation of opportunity and growth.

Jacob: I want to end the show with the same two questions that I ask every operator that comes on. First, what is a mistake that you have made in your career that you wish you hadn’t and what did you learn from that mistake?

Brian: Mistake that I made in my career that I wish I hadn’t? That is a great question. I think that one of the mistakes that I made is that back before AIM acquired August Home, we were late to the party on a lot of things at the time. We were late to the social media craze. We were late to the iPad, iPod craze. That’s one thing that had we jumped on that wagon a little quicker, I think things could have been different. Just one of the challenges, we’re seeing it now with things like generative AI and other current trends and topics is, how do you know when to jump on and when to stay off? Being better at that is something that I think we all probably need to work on, me especially.

Jacob: Is there anything generative AI that you are exploring right now?

Brian: I think we fall squarely into the mix of what everyone else is doing. We’re testing the waters. We’ve got an internal group of people who are ideating around what those opportunities are. we’re, I think, like everyone else, waiting to see how it plays out from a legal and other perspective. We’ve done quite a lot of experimenting and thinking around it. I have some ideas and some goals for some propensity pricing models and leveraging AI to do more data analysis than anything. The generative AI piece is something that we’ll probably continue to hedge on a little bit.

Jacob: Then my second closing question is, what is some advice that you would give operators that are looking to grow their media businesses?

Brian: I would say, and I’ve been saying this a lot here lately, there’s a saying that I heard, that someone said to me many years ago, I can’t think of who or where it came from, so I can’t attribute the quote, but work on starting a fire instead of cursing the dark. I would say oftentimes, particularly around print and costs, we get mired down in the sadness and the angst that comes with rising costs and declining print files.

I’d rather get aggressive on new innovation and new program, new revenue-generating ideas, and ways to diversify the business toward those, again, building those on top of what is the core brand and the core content but monetizing it in ways that have much lower or no cost where possible. That’s something I believe we’re focusing on now.