Forbes magazine, the “global champion of free enterprise”, has been around since 1917. In 2010, the company began transforming itself into an internet publishing machine.
In this Q&A with Mumbrella Asia’s editor Robin Hicks, chief revenue officer Mark Howard talks about the thinking behind an open platform for writers and brands, how the company has embraced programmatic and native advertising, and pushing the Forbes brand into new areas beyond media, such as branded skyscrapers.
Mark, 70 per cent of Forbes’ ad revenue now comes from digital. Can you explain how that shift has come about?
We launched the first Forbes website in 1996. We ran the print and digital business separately. We had to focus resources from a sales and marketing perspective just on digital, as that business had the opportunity to grow.
In 2009, when the recession hit, we integrated the two businesses. Until today, we’ve been very aggressive and have seen fast growth from the digital side. In 2013, digital and print became the same in terms of revenue.
How is print revenue faring?
Print ad revenue has remained constant for the last several years.
Tell us how digital ad revenue breaks down for Forbes.
There are three components: direct sales, which mainly come through desktop but mobile sales are starting to surge, programmatic and native.
In 2012, we aggressively started pursuing programmatic, and that’s now a third of our digital revenue.
Native advertising is something we got into in 2010 – before it was even referred to as native advertising. At that point we started working with brands to publish content on the website, and that revenue stream has become very significant.
What slice of overall revenue does native advertising generate, and what do you call it?
It’s called BrandVoice. That’s the labelling that we use to indicate to the reader that it’s content coming from the brand. Prepended to the headline of the article is the name of the company and voice, so ‘SAP Voice’ or ‘Samsung Voice’ for instance.
We started in 2010, but it wasn’t until 2012 that the industry caught on to the idea of native advertising. We created a unique proposition. A brand will commit to a minimum of four months’ content, and we teach them to use our CMS (content management system) tools, so they can publish content directly into the CMS. They pay a flat fee of US$75,000 a month to be able to do that. What most publishers are doing today is offering their own creative services to create posts for brands.
It’s a differentiated model, but it’s one that has grown very rapidly. Around July last year, we announced our 100th brand that has participated in BrandVoice. Since 2010, we’ve had over 7,800 posts from our BrandVoice partners, and have had 64 million page views on BrandVoice content.
In 2010, we bought a startup called True/Slant, which was created by Lewis DVorkin. His philosophy was to create a tech platform that would enable us to bring on expert contributors that are vetted by our editors. That network has now grown to 1,800 contributors around the world, and we continue to build that base in each region.
They represent the editorial side. At the same time, we recognise that brands are expert voices too. But we needed to ensure that we had the infrastructure to support it, and show to readers that the content was from the brand and not editorial.
What sort of brands are using the platform?
Our longest running partner is SAP. They were our first. They started publishing five years ago and have never stopped (check out SAP’s page on BrandVoice here). In Asia, our clients include Huawei, Samsung and Infosys.
Tell us about Forbes’ foray into programmatic.
A decision was made in 2012 to hire a programmatic lead. We then made a decision to go all in, removing all restrictions and barriers for advertisers, all blacklists and whitelists were gone. We invited them through an open exchange to bid for inventory. We removed the price floor. We wanted more competition to bid for inventory.
The tech stack was built on Google’s platform. We use several programmatic products, including Dynamic Allocation, which makes every piece of inventory available, so there is no remnant inventory.
The next stage is to open it up beyond Google.
What about the risk of getting brands that are not suitable advertising on Forbes, and so affecting the environment for everyone else?
The reality is, the ads go through Google’s filter system. This gives us comfort knowing they are filtered for quality. We do get a lot of direct response ads. But because of our approach to how advertisers bid, they still have to pay a premium to be on Forbes. There’s a greater bid density. Dynamic allocation puts direct-sold inventory on an open exchange. That means that to run an ad on the site, the price is higher than from a remnant source, so that eliminates a chunk of brands [from advertising on the site].
How have you managed to hold print advertising steady?
A big part is that our circulation has remained strong. Readership at an all-time high. While most publications are on the decline, our total readership on the rise. Our website gets 50 million unique visitors a month (4 million in Asia) according to Comscore data (according to Google Analytics, we have 70 million).
The readership has remained strong, so readers are still interested in what we’re putting out. We publish 14 issues a year of Forbes Asia. We have 37 licensed editions, that number was less than 10 four years ago. So expanding in print while digital is exploding [the monthly reach of Forbes print edition edged up in the latest Ipsos Affluent Survey Asia Pacific, formerly PAX; it is the region’s ninth most-read publication among the wealthy).
Forbes Asia’s ad revenue is on the rise. We launched [a print edition of] Forbes Philippines in May last year, and Forbes Japan in 2014. Our print circulation in Asia is 500,000. Forbes.com is our air cover.
What do you see as the biggest challenge Forbes faces in the future?
We want to build off the solid foundations we have. As we continue to grow our footprint and contributor base, we are also looking to introduce new conferences to Asia. At our events, the average net wealth of attendees is US$250 million. One in every four people in the room is a member of our rich list. Asia is a huge growth market for us, and we want to tie-in events that lead to integrated selling opportunities. We want to build the business as big as the brand is.
We have a healthy and profitable business, but we’re looking to take it into non-media platforms. For instance, the property and financial services verticals. The first Forbes Tower is going up in Manila [Through a deal with Philippine real estate firm Century Properties Group, Forbes announced in 2013 that it was to build the world’s first Forbes-branded Forbes Media Tower, the first of a network of Forbes Media Towers the company plans to build the world. Forbes does not own the building, but generates licensing revenues from an upfront fee and an ongoing percentage of sales royalty. The model is driven by the notion that a developer can more easily sell at a premium using the Forbes brand. The building in the central business district of Makati is expected to be completed by 2019].
We want to develop more branding partnerships, and there’s more news to come on non media. The Forbes brand means success. So it can be used on different platforms. I don’t know if there’s another media brand that so clearly means success.
In Asia, we started doing rich lists 14 years ago. We’ve become the keepers of face for the tycoons of Asia and those who aspire to be tycoons. The aspirational part of the brand is very important. The desire to be on the cover of Forbes is a very powerful thing.