With its CEO making his exit, and a Global CEO search underway, Condé Nast could find success outside the U.S. as a new global media entity.
A publishing empire born in New York over a century ago, Condé Nast has been a high achiever in print, with iconic magazines such as Vogue, Vanity Fair and The New Yorker. Its move to digital has been another story. The company has tried for years to lessen its reliance on print advertising, a revenue stream that continues to dwindle. Last year alone, 50 of the biggest advertisers cut print ad spending by more than $417 million. As Todd Spangler of trade magazine Variety said, “Like other publishing firms, Condé Nast has struggled with the erosion of its print products.”
When he was appointed President of Condé Nast in 2010, Robert A. Sauerberg Jr. was charged with leading the creation of a new business model for the move to digital. He became CEO in 2015, and apart from a few wins such as Condé Nast Entertainment, real success has been elusive. Last year Condé Nast lost more than $120 million. It has cut staff, put several magazines up for sale, and closed or lowered the frequency of others. According to the New York Times, “The publisher did brisk business in the beginning of 2018, particularly from digital video, but hit a stumbling block in the third quarter, when the print editions of its magazines fell short of goals.”
In August, Sauerberg announced a restructuring plan meant to return Condé Nast to profitability, including a goal to bring print advertising down to 50% of revenue from its current 70% through investments in a data platform and its digital business. The restructuring will go on – but without Sauerberg, whose resignation was announced on November 27. Condé Nast has launched a CEO search, and the executive recruitment process is expected to be lengthy. Sauerberg will remain until a successor is found.
A note from the board said the company is developing strategies to “meet the rapidly evolving media landscape”, acknowledging that the industry “is increasingly becoming more global.” The new CEO will have a different title, Global Chief Executive, and a broader scope, heading both Condé Nast and London-based Condé Nast International. The two have historically operated separately under parent company Advance Publications, but a corporate restructuring will change that. It will also place new importance on Condé Nast International. Its current Chief Executive, Jonathan Newhouse, will also step down when the Global CEO search is successfully concluded.
Condé Nast International, whose publications include British Vogue and Vanity Fair Italia, has fared quite differently from its American cousin. It has thrived, in large part because print titles remain strong in parts of the world outside the United States. The company said it is profitable. Condé Nast International is even expanding, with the creation of new editions of Vogue in the Czech Republic, Slovakia, Greece and Hong Kong.
Of course, executive recruitment for the new global leadership role will be no mean feat. Because it will require experience running international businesses, the new CEO is unlikely to come from inside the company. Not that this has quashed speculation. Wolfgang Blau, who joined Condé Nast International as Chief Digital Officer in 2015 and became its President in 2017, is a rising star; however he has said he has no intention of applying for the role of Global CEO.