Q&A: Martin Nisenholtz, CEO, New York Times Digital

MediaDailyNews' Tobi Elkin spoke recently with Martin Nisenholtz, CEO of New York Times Digital. What appears below is Part II of a two-part conversation with The New York Times Co.'s digital czar.

MediaDailyNews: In a recent speech, you referred to online publishing being on the cusp of entering a creative phase. And that heretofore, Web publishing has been about aggregating existing content, packaging, and distributing it. What did you mean?

NisenholtzMartin Nisenholtz: Some people regard the weblog as the first truly native form of Web content creation. And I said that might be true, but that weblogs hadn't yet created a commercial engine underneath them. I said they were populated by a mostly passionate group of amateurs. And there's nothing wrong with that, but in order for a medium to take off, it needs to have a group of professionals who are compensated and a business model underneath that can support that professional class. And what I was saying is that we may be on the cusp of that happening. To be honest, most of the Web content businesses that have survived the dot.com bust are Web content businesses that trade on phase two attributes of sorting and aggregating existing content, and making that content available through an easy and universal way--through Internet. The tools, the technology, and the competencies may be coming into shape to create something new.

MDN: Does the Times have investments in any social networking sites yet?

Nisenholtz: No, we don't have any yet. Obviously, we're talking to many of the players, and we're assessing what our role would be. What we should be building inside--what we should be doing in partnerships. We're watching the field. I think that my gut [feeling] on some of this stuff is that it's a little bubbly. That this phenomenon sort of took off, and you've got to watch these phenomena a little bit in order to assess whether they have legs--and some of them may, and some of them may not. My understanding is that Friendster has slowed down a little bit. I could be wrong about that. Google at one time was interested, and now they've got Orkut. There's a lot of activity in the field, and we're interested in this. Deeply interested in it for a whole range of reasons, not the least of which have to do with local listings. We'll move when we think we have a strategy fully baked.

MDN: What are you most interested in partnering in or investing in?

Nisenholtz: I can't answer that question yet. I think that it's safe to say that in both Boston and New York we have very coherent and large communities on our Web sites, and today those communities are basically aggregated against accessing content. But there's no reason why over time they can't be energized to share information with one another as well as to transact business with one another. We happen to have very large Web sites, so I think we're in a position to move aggressively when we want to. Keep in mind [that] we bought Abuzz in 1999--it was perhaps a first-generation version of some of these [social network] services. But integrating these services and making them work in the context of a news-oriented Web site is quite challenging. In fact, we continue to work on integrating Abuzz--you'll see us integrating it into our travel verticals, for example, in the coming months. We will move on the whole user-generated content piece this year.

MDN: How are you feeling about the state of online creative these days? Have you seen improvement?

Nisenholtz: It's a very big topic for me. It's a complex topic because it has to do with institutional arrangements inside of the agencies, how they operate, and what their folks want to work on. And I understand from a very emotional level why creative folks would want to work on one medium versus another. I worked for an agency and managed creative people, so I understand that. [But we need to focus on building] strategies and platforms for clients that are extensible to a whole range of approaches in the marketplace, media and non-media approaches, and having that flow from one thing to the next in a very powerful and synergistic way. And for the idea to work, it's very important that the creative teams understand how many millions of people are viewing this stuff and what kind of impact it has. I still believe that there's a tendency to think of the Internet or the Web as an adjunct medium, and in some categories it is. A third of U.S. households have broadband today; about 60-some percent have Internet access overall. So, from a reach perspective, it's not 99 percent or 98 percent, which is where television is. So if you're selling soap or dish detergent, the Internet probably isn't the most attractive medium yet. However, if you're marketing financial services, or you're marketing automobiles, that's where a lot of the decision-making is taking place. [Creative] people need to understand that when they get on the Internet they're talking to a big group of people and they're having an effect, and therefore the creative messages have to be very powerful.

MDN: What was the reader response to the full-page takeovers on NYT.com?

Nisenholtz: Are you talking about interstitials? Going from one to the next? The response was not bad, I have to say. The most response I get is when clients cover up content when people are trying to read something--that enrages people. The interstitials are different. They're a bit more like television advertising. You haven't gotten to the article yet. People can actually close them if they're not interested in viewing them, and those people who are can view them. But my feeling is--and a lot of people disagree with me on this--that size really does matter, and that the large half-page formats that we pioneered last year are the best advertising we run, and in some ways the most intrusive. We did a campaign last year with ExxonMobil, which was very well done. It had the sensibility of outdoor in some ways. The text was big and intrusive on the site, but it ran an optional television commercial in the window so that people who looked at the text and said, 'hey, I'm interested in that message' could then play the commercial. I see studios beginning to do that. I think that when agencies really begin to combine interactivity with traditional forms of messaging, that's when the creative becomes most powerful. I really believe after reading a lot of user mail that we're at a point now where our readers are really appreciative of great creative, and will respond to it on the Web site. Not necessarily in a click-through context, which is a very crude way of thinking about the effect of advertising unless you're a pure direct response marketer. But for most marketers, click-throughs don't mean very much at all. What matters is the takeaway. What matters is 'how does this consumer feel about my brand' having experienced this advertising. That's something that I don't think we've done enough work on, and I don't think advertisers are paying much attention to.

MDN: Where do you think streaming media is going? Creative people say it's not enough to just rerun existing commercials on the Web, though that is an entry point.

Nisenholtz: Well, I don't agree with that. I mean, Rome wasn't built in a day. Millions of people are on the Internet every day, tens of millions, and I think that if you can get your commercial message in front of those people you should in a way that helps you and doesn't hurt you. Having said that, I think that marketers are faced with the challenge across the board, with respect to how television advertising works, and how well it will work in the future. I find it ironic that I can sit at home with my TiVo and fast forward through commercials, and yet on most Web sites break, or refuse to have a fast forward button on the commercial. I understand that. The quid pro quo is in order to get to this content you have to watch this commercial. Unfortunately, it's a technological battle that I think is going to be hard to win over time. So I do believe strongly, very strongly, that clients should be moving as much of their television advertising as they reasonably can to the Web in order to learn about this environment and how users are reacting to it. Because I believe the Web is simply a proxy for the future of television. Now, is it going to be the future of television next year?--no. But I'll tell you, there isn't a whole lot of difference between the way I use my TiVo and the way I use Web sites. I basically go into TiVo Central and choose programming and manipulate that programming in a way that suits my needs. That's the essential point: I'm in control.

MDN: What do you think of the phenomenon Advertising Age has dubbed "Madison & Vine?" There are plenty of applications for the Web there. Is it a fad?

Nisenholtz: I think there's always opportunity in change--put it that way. But before you go off and try a bunch of exotic and marginal ideas, focus on the tens of millions of people who are [on] the Web every day. If you can't conquer that environment, you are very unlikely to have an effect in interactive television. Having said that, I believe very strongly that the Madison & Vine notion is on track and that whatever can be gained from a bubbling up of opportunity and creativity can be leveraged, as long as it's put in its proper context. What I sense sometimes is that the industry has a way of running down roads that are simply evolutionary dead ends without knowing exactly where it's going.

MDN: Do you think this might be an evolutionary dead end?

Nisenholtz: I don't think Madison & Vine is one thing. I think what Madison & Vine is-is a proxy in my view for consumer control--and that's why I think it's so important for the industry to have that kind of discussion. But I think that within consumer control there are many opportunists, many phonies, and many people who are hangers-on pushing visions that don't have any credibility.

MDN: But couldn't all of this brand integration be seen as a positive for the Web?

Nisenholtz: I would say that to the extent that these things don't distract people from recognizing the Internet as the platform that the consumer has voted on. Game over, guys: The Internet is real. [laughing] It's not going away. The Web is the universal standard worldwide for interactive media. Now, if you want to go talk about this platform or that platform as a future platform and experiment with it, that's great. [Apple's] iTunes isn't off on some exotic platform--it's a Web-based service. Why? Because there are 300 million users of the Internet around the world. So let's focus on where the consumer has put up his hand and voted. I just think it's very important that marketers understand that and have it in their gut.

MDN: What shows do you TiVo?

Nisenholtz: You're going to laugh at me. I TiVo "Meet the Press," The George Stephanopoulos Show--mostly public affairs shows.

MDN: Any HBO?

Nisenholtz: No, I TiVo movies. I have a list of my favorite directors set up. For example, if there's a Francis Ford Coppola movie, it gets TiVoed. I TiVo "Law & Order" because the reruns are on every night of the week on TNT. But on NBC, it's on Wednesday night at 10, and that's past my bedtime. My kids (ages 12 and 14) love Friends, American Idol, and they love "The Simple Life"--don't ask me why.

MDN: Do they read the New York Times on the Web?

Nisenholtz: As much as I can encourage them to do that, they do that. Actually, NYTimes.com is my older daughter's home page, and she looks at it every day. I don't know how much of it she actually reads.