B-to-Bs are in Style at Conde Nast

Folio: The Magazine for Magazine Management, March 1, 2004

Byline: Anthony DeRico

Ever since Conde Nast Publications bought Fairchild Publications from The Walt Disney Co. for $650 million in 1999, magazine-industry pundits have wondered how long it would be before the new owner would start pruning the portfolio. Conde clearly wanted to snap up W, fashion-industry bible Women's Wear Daily and Daily News Record, the WWD of menswear - all of which complement its fashion portfolio. But word on the street was that Conde had walked away from a possible deal twice, because Disney insisted on selling all the Fairchild trades.

Nearly five years later, only the foundering Brand Marketing is gone. It was shuttered in 2001.(Women's Wear Daily, W and Jane are in a different unit.) And while the remaining ugly-duckling Fairchild trades still lack the customary Conde glam factor, they more than make up for it in performance.

During the worst business-to-business publishing recession on record, Fairchild's b-to-b division has bucked the trend - growing ad revenues 14 percent in 2003, on top of 2 percent growth in 2002. Fairchild has also done nicely against its peer pack (retail magazines), which saw growth of a mere 2 percent last year through November, according to data compiled by CMR.

"This was a business recession, not a consumer recession," says Bob Crosland, managing director at media investment bank AdMedia Partners. "Retail has held up relatively well compared with classic, smokestack b-to-b publishers like technology and manufacturing."

Still, says Crosland, new management at Fairchild has helped too. The goal has been to remake the b-to-b unit into a dynamic and performance-driven organization, says Mike DeBartolo, who last month was bumped up to executive vice-president of the b-to-b division. A former associate publisher at Money magazine, sales manager at Glamour and global ad director for Reader's Digest, DeBartolo came to Fairchild in late 1999 as vice president and group president. He started by revamping what he saw as a tired and negative corporate culture.

"When our management team arrived, we found a company culture that had been closed-minded, people didn't know where they stood, morale was low and turnover was high," he says. "We set out to change all that and install a performance-based culture, which has been crucial to our growth."

Part of that change was to involve staff to a greater degree. "We give our people more responsibility, more ownership and more pay for performance," says DeBartolo. "The flip side is that we part ways with everyone else."

More important, Fairchild worked hard at making its books the "must-read" products in their industries. DeBartolo filled top positions with big-gun editors and experienced reporters who can dig out stories and provide an authoritative point of view on issues critical to the trades' readers.

"It's not enough to cover trends; our editors validate them with their insider point of view," says DeBartolo. "That means more privileged access than ever before for our subscribers." Fairchild's editors are getting five times as many exclusive interviews in their b-to-b books today as they were in 2000, says DeBartolo.

An essential ingredient is gleaning market intelligence - both from the edit side and from the business side. There are regular meetings between editorial and sales teams to make sure that the coverage is ahead of the curve, pointing readers to where the growth in their business will be, says Footwear News publisher Andy Amill, who came to the weekly after 16 years of consumer experience at US, Family PC and Self. "We discuss topical issues that will resonate with our readers while simultaneously providing revenue opportunities."

For instance? He cites FN's Indepth Report issues, special issues dedicated to a specific category, such as the athletic, outdoor and comfort shoe markets. The Independent Retailers Survival Guide, another special issue, "resounded with our readers in terms of the information it provided and was a big win for us on the revenue side," he says.

Fairchild execs call the ad-edit teamwork "collaboration without compromise." Says Supermarket News editor-in-chief and 21-year company vet David Orgel: "At the end of the day, it's hands off, and it's the editors choice." Fairchild always had a tradition of editorial independence and has maintained that under Conde Nast, he says. SN recently ran a story about the controversial slotting fees that retailers pay to place products on store shelves. It's not the type of story many retailers (a big advertiser category) like to see, says Orgel, but "our job is to tell it like it is. Our readers respect us for that."

Meanwhile, Supermarket News publisher Dan Bagan has achieved exceptional results by going back to basics. While other publishers were busy putting their energies into custom publishing, for example, Bagan focused on selling good old-fashioned ad schedules.

"Custom publishing is viable, but not at the expense of consistent strong communication with the food retailers," says Bagan, a 14-year veteran of Lebhar-Friedman, who came to SN four years ago. SN revenue was up 23 percent in 2003, while market share climbed four points, according to CMR.