April 3, 2015

How Variety Maintains Its Influence On The Hollywood Elite

Variety was founded as a weekly print magazine in 1905 with the purpose of keeping tabs on the U.S. vaudeville and theater industries.

In the 110 years that have followed, it has reported on the introduction of television, the Civil Rights Movement’s effect on Hollywood, and the rise of the World Wide Web.

But throughout its transition to digital, the publication has resisted the urge to chase traffic with steamy Hollywood gossip and instead focused on its core competency: leveraging its in-the-know writers and editors to dig out business scoops that executives in film, television, and music can’t live without.

"Variety’s not writing stories about Kim Kardashian on the beach," says Craig Perreault, SVP of business development at Variety’s parent company, Penske Media Corporation.

For the studios, networks, and luxury goods manufacturers that advertise with the site, this means the opportunity to associate themselves with Variety’s authoritative voice and communicate with its audience of wealthy, influential executives.

Craig Perreault, SVP of Business Development at Penske Media Corporation, PMC

According to Perreault, the print magazine’s 40,000 subscribers have the highest average household income of any magazine in America.

"What we’re offering to advertisers is a highly engaged, highly qualified audience," Perreault said. "Because Variety is 110 years old and is the publication of record for the business of entertainment, Variety offers a level of access, insight, and perspective to its readers that we feel is unmatched."

Variety stopped printing its daily magazine in 2013 but continues to capture the attention of influential Hollywood executives online

Though the site’s prime audience is industry insiders, the allure of showbiz brings in TV and movie fans who are merely spectators.

Perreault says the site will sometimes pick up huge traffic through referrals from other news sites when it is early to a story with mainstream appeal. This was the case this past summer, when Variety was one of the first publications to report on Robin Williams' death.

Starting in 2010, Variety had attemped to use a paywall to shut out this mainstream traffic and push more people to become subscribers to its daily print newspaper. The result was something of a disaster, with traffic dwindling to just 320,000 monthly unique visitors, according to the New York Times.

After Penske Media Corporation purchased the publication for a paltry $25 million in late 2012, it turned the daily newspaper into a weekly magazine, removed the online paywall, and opened the floodgates to the masses.

This past February, the site brought in nearly 20 million people, according to ComScore.

Despite the relatively large audience it has today, Variety's status as a trade publication comes through in how its readers get to the site. As you might expect from an audience largely reading while at work, less than half of Variety's traffic comes from mobile devices.

Perhaps even more surprising in this era of Facebook’s dominance of the web publisher ecosystem, just 20% to 25% of Variety readers get to the site via social media. Meanwhile, the site’s focus on breaking news has caused it to receive 40% of its traffic from people searching for information on a specific person, subject, or news story.

The offices of Variety.com

Though the site uses data to provide readers with contextually relevant story recommendations and to give editors an idea of which topics readers are interested in, Perreault says everyone who comes to Variety.com sees the same homepage with stories carefully curated by Variety’s editors based on their knowledge of the entertainment industry.

At the time of writing, three of the most popular stories on the site are a follow-up to rumors that Full House is returning for a new season on Netflix, news on an upcoming live action Winnie the Pooh movie and an op-ed about how Paramount Pictures needs to make more movies.

"Variety is a B2B publication," Perreault said. "Variety’s not writing stories about Kim Kardashian on the beach. We’re writing about the business of entertainment and producing content for a very qualified audience."

Variety collaborated with Sony and agency Widen+Kennedy on a sponsored homepage takeover

Recently, the publication collaborated with Sony and the advertising agency Wieden+Kennedy to create a version of the site’s homepage that allowed readers to scroll through stories Variety had published on the biggest entertainment events of the past 50 years, alongside information about the Sony products that were new at the time.

The timeline was curated by Variety’s current editors, and sold on a sponsorship basis.

While Variety sells standard display units on a CPM basis, it’s these custom, direct sells it is most proud of.

"Those types of custom experiences are where we really want to show Variety’s muscle," Perreault said. "We think those are the experiences that brands and advertisers are looking for, much more than the standard IAB advertising or run-of-site campaigns."

By shying away from Hollywood's more tabloidy stories, Variety has been able to uphold its reputation as a premium news brand and sell advertisers on paying extra for deeper engagement.

Though the site’s editors were deeply involved in curating the Sony project, Perreault was quick to stress that they were merely selecting content Variety had already published rather than creating new content specifically for the brand. If advertisers want that, they must utilize Variety’s in-house branded content team.

That team has about five or six people on it and encourages brands to take an active role in the content creation process. The projects are sold on a CPM basis with a flat fee for producing the story that Variety and its clients agree on in advance.

The site offers a native advertising product, also sold on a CPM basis. Brands can run content they’ve already created on Variety's site and the stories are distributed alongside a disclaimer on Variety’s home page.

In some cases, that content makes it inside the print magazine. Where Variety draws the line is on social media, channels where its advertisers' campaigns do not run. Perreault said that while clients ask, they've yet to lose any business over it.

"Our editorial policy is that those social mediums are for Variety editorial content," Perreault said. "Clients do ask about it, but as we work through the process and really get them to understand the qualified nature of Variety’s audience, that’s never been a reason for a lost campaign."

Variety measures advertising success through several metrics, including the amount of time people spend with content and how likely those people are to share it on social media.

Perreault said these engagement figures are particularly important because unlike display advertising, native advertising is not a branding vehicle, but a method of telling a story — whether it’s detailing a new product that’s being launched or explaining a complex industry issue.

Moving forward, Perreault and Variety are betting that these native, storytelling products will soon be the way premium publishers make most of their advertising revenues online.

After all, if you’ve spent more than a century building your media brand into a trusted news source on America's most beloved storytelling industry, wouldn’t you use it to give clients something special?

"We see digital advertising evolving from the standard leaderboard or run-of-site campaigns to brands really wanting creative and immersive experiences," Perreault said. "Big brands are spending big dollars for these types of experiences."