CEO Perspective 2010: Rich Maggiotto

By AD Staff
Tuesday, November 17, 2009

Rich Maggiotto, President & CEO, Zinio
114 Sansome Street, 10th Floor, San Francisco, CA 94104
Phone: 415-494-2700
Web: www.zinio.com

1. When will the industry see some recovery?
We are starting to see some real signs of recovery taking place already. While these challenging times have caused a great deal of negative news, layoffs and magazine closures, they also have allowed us an opportunity to reflect. We all have needed to look inside our organizations, and within the industry, to ask ourselves what and how we need to change. We have been challenged to innovate and reinvent ourselves in ways that will make us stronger. These adjustments have afforded new opportunities to build better brands and stronger relationships with our advertisers and readers. I expect that we will continue to see slow yet steady progress into Q1 and Q2 of 2010, with a quick upswing moving into the second half of the year.

2. Are you seeing recovery in your business?
It was difficult for us at Zinio to say goodbye to some clients and titles which were near and dear to our hearts. Those losses had a real impact on our business. On the flip side, we also have seen positive growth. These challenging times have driven more attention and focus to digital publishing. We have seen growth coming from many traditional channels, as well as new channels. These include increased digital-publishing readers and subscribers, custom publishing, strategic partnerships and advertising. We are optimistic about the future, and are looking forward to the continuing innovative aspects of our industry.

3. If yes, tell us what you’re seeing in terms of the types of companies where demand for your products and services are increasing. And tell us what media companies are telling you.
High levels of demand are being generated from a variety of industries. We believe this is being driven by customer interest in digital reading, access and interaction. One trend we have been watching closely is the type of personality buying digital publications. While historically this has been common from those considered “early adopters,” this year we started to see a shift. More mainstream magazine and book fans are seeking and valuing the added benefits that digital publishing offers. From dynamically designed editorial to basic but relevant features such as search, share and save, consumers now expect their media to perform for them. This expectation opens up a new universe of potential fans that reaches every generation and home in the world. At the same time, media companies are responding positively, as well. Many recognize the value in dynamic advertisements that are resonating with readers. Retailers now are leveraging Zinio as an extension of their cost-efficient distribution strategies. And, technology companies of all shapes and sizes are looking to Zinio to supplement their product offering via added-value options such as digital reading.

4. How will our business be different after the recession?
“Different” is definitely the key word here. As we recover from this recession, one thing is for sure: changes ranging from environmental to logistical and from operational to technical will have taken a toll on us. From cost-cutting efforts to technological advances, the publishing industry has had to prepare for a significant expansion from print reading to a ubiquitous reading environment. The recession has driven consumers to become more efficient at managing their own households. This increased self-reliance also has driven a desire for “trusted information” on demand. We do not expect consumers to start spending wildly the day the recession ends, nor do we expect them to shed their focus from the family and home-based efficiencies they have had to employ to survive. However, we do expect them to demand more from every dollar they spend. They will expect that we cater to their busy, on-demand lives. Being able to enjoy a magazine at home—and then access it (or portions of it) from a digital device while on-the-go—will be vital. Zinio is focused on ensuring that all advertisers and publishers are able to meet their consumers’ needs seamlessly and in a manner which builds stronger relationships. We are working on exciting and innovative ways to enable the industry to capitalize on consumer needs and deliver a powerful solution.

5. What are the most important things media companies can do now? Change their org structure? Modify their approach to content creation?
One of the things we are bullish about is the need for media companies to embrace the value of a digital magazine ad. They need to learn how to best own the space and use it to create powerful results. Outside of a homepage takeover, a digital magazine ad is the largest single ad unit one can place on the web today. Not only that, but it has a fixed position and is adjacent to trusted content. The time spent on digital magazine ads, and the interaction with them, is so high that it cannot be compared to other digital ad space. We encourage every media company to better understand how they can optimize their use of this space now. As we continue to see significant digital readership growth, media companies should be ready to capitalize on these placements. There is tremendous untapped value here.

6. What is the most important lesson of the 2007-2009 recession? How do you personally implement it at your company?
My hope is that it will be an integrated, multi-channel dynamic entity, but that is a tall order. What we really need is a media entity that eliminates the silos of traditional media planning, and leverages numerous assets to optimize brand exposure. Our world has changed, and with it, media buying and placements also have changed. What used to be a simple choice of online or offline ads has grown to a need to support six unique screen sizes for each digital ad. Think about it: viewing a static, non-reflowable magazine ad or editorial copy on a two-inch screen looks different than when you see it on a large-screen TV via a gaming system. Five years ago, media companies only had to prepare for above-the-line and below-the-line advertising; it was a pretty simply choice. That simplicity is now gone, and consumers are in control. The media companies of 2012 will need to focus less on doing things by channel and more on ubiquitous strategies that address consumer needs holistically, in a multi-dimensional and dynamic world.