To Reach Profitability, Conde Nast Will Reduce Ad Revenue To 50%, Focus On Video

Condé Nast’s CEO Robert A. Sauerberg is not waiting for publishing to fall into place with the crazy instability created by the digital advertising world over the past near decade.

Last week Sauerberg told his staff of his plans to completely rebuild the model the company made its name on, ostensibly pivoting to a tech-first company rather than publisher in the process.

Sauerberg plans to shake up the company’s revenue streams by 2020. Currently, Condé Nast has a 70/30, advertising/non-advertising revenue ratio. Over the next two years, the company, under Sauerberg’s guidance, will make up that 20 point difference to 50/50 through its events business, data platform and an increase in digital business.  

In an interview with Adweek, the CEO also stated: “We’re defining what short-form video really can be in this market and in our marketplaces. We see that as a continued growth area. We’re going to pour more gas on it, and over time it will become our predominant content format.”



This path has been clear for some time for Condé Nast: Deep layoffs, shuttering of titles or turns to digital-only formats and the recently announced titles up for sale all point to a company trying to find its legs in an atmosphere where even the most stable of entities are having a difficult time staying afloat.

But, while the company has seen losses and cuts to much of its traditional business, Condé Nast has developed a robust video platform, with the announcement of three OTT channels to launch for Wired, Bon Appetit and GQ, among other data- and tech-heavy avenues. The company is investing where it sees its place in the future.

Adding credence to this theory, WWD notes Condé Nast launched Condé Nast Entertainiment in 2011 with two employees. It now counts approximately 300 staffers.

While these changes are all part of survival, one has to wonder what’s lost when a publisher’s titles begin to morph into brands, and its writers and editor perhaps into brand ambassadors.

Sauerberg believes the key to successful publishing is ignoring the format and focusing on content. This tactic does seem somewhat necessary, for large operations even more so. But another part of Sauerberg’s message rings particularly interesting if not troubling.

More layoffs are planned at Condée Nast to offset costs—the company also plans to be profitable over the next five years, bringing in $600 million in revenue. In that same Adweek interview, he notes, “It isn’t just that this is the place you want to be if you’re a print expert, it has to also be if you’re a producer, if you’re an engineer who creates digital products. This place has to be the place you want to be.”

What does a future look like where engineers and producers lead the way? And how does an industry pivot from relying on  writers, editors and advertisers to a tech-led future while remaining true to its mission?

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