[FIPP Congress Q&A] Meredith SVP on changing media ownership and future investment
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You’re on a panel about media ownership at this year’s FIPP World Congress. With consolidation and continued change in the marketplace, how do you retain the focus of the business – and what is that focus right now?
On one level, we have a simple answer for that, which is to keep focused on running our own businesses. But we’ve also said that we feel really good about our ability to connect with consumers and deliver content that our consumers continue to want. The challenge for us – and there’s no surprise here – is to continue to fight the advertising front, with the Googles, Amazons and Facebooks of the world continuing to suck up the digital budgets. I think we can continue to do that quite effectively through the application of first-party data and knowing our audiences extremely well. We just try to stay focused on the fundamental business proposition, which is to create really compelling content and services that are valuable to consumes – and leveraging that understanding on behalf of our advertisers in appropriate ways as well. That means, that fundamentally, the challenge is the same one that’s always existed – it’s just that the media landscape has become one where there’s no let up in the competition. Whether it’s nimble, digital start-ups trying to create better consumer experiences across a variety platforms or really large competitors who can offer scale plays to advertisers that provide incredible reach, we have to be able to address those and think very specifically and niche, while creating broad-scale solutions as well.
The platforms have the advertising hold at present, but does publishers’ increasingly in-depth knowledge of consumers – and the way tech can enhance that – provide an opportunity for the non-platform businesses?
Absolutely. Look at the media landscape and how it’s changed over even the past five years or so. Five years ago, we weren’t talking about voice and devices all that much. Now it’s very much a part of the product suite we have to play to. Increasingly, the consumers are thinking about which apps are most relevant to them. They’re increasingly spending time with podcasts – and we play in that space – so there are always new formats and wrappers that we need to be on top of and staying current with.
The trend around growth in recent years has very much been a focus on M&A activity. Will M&A continue to be the big thing for organisations such as yours?
I think it has to continue but I think the nature of the targets will continue to evolve. So, while we were focused on growing a marketing services division for some period of time, we exited that as a business strategy a year ago last May with the sale of our MXM division. That had been a great growth story for us for some time, because it allowed us to bring more value to our advertisers and generated revenue and profit. But that landscape continued to consolidate, and you either decide to continue to grow into that space or you think about how to redeploy capital, resources and focus – and we decided the latter was the better strategy for us. So the focus changes. But, having said that, if you look at the direction we’re going and how the industry is expected to evolve, I don’t think you get there purely on organic growth. So I think that M&A, and continuing to add revenue and profit by finding innovative start-ups and bringing them into the organisation will continue to be really important. I don’t see any change in that and it will continue to be a crucial part of how we grow.
With M&A, you have to be disciplined about it. You have to make sure it adds value to your offering and that it can be integrated, and you have to make sure the culture is right, the strategic fit is right, that it lines up well with your strategy and initiatives. But if you can line all those things up, it can be really powerful.
Outside the US megadeals, do you see different opportunities in different regions – or are the markets showing real similarities now?
I think there are more commonalities than there are differences in regions. Obviously, each market will have its own attributes and local focus, but I see more commonality from market to market. I don’t want to paint with too broad a brush, and some regions are in different places to others in terms of their growth level. But generally speaking, there’s more sameness than difference.
What can we expect from Meredith specifically in the coming years?
We love brands and we will continue to grow our own brands as well as looking for other compelling brands that can be part of the portfolio. We’re a business in two parts, with our national media group and our local media group, and the venn diagram overlap is fairly thin, so we’ll be looking at what the right strategy is for both of those. Local media and local broadcast media is a really active space right now, and we have arguably the most attractive mid-sized portfolio that is still independent in the marketplace – so we’ll be looking to make some moves there, either through adding scale or other opportunities. When we talk about the horizon, 10 years is forever and five years is a very long way away, but over the next two-three years we’ll continue to keep looking at the digital side. We’ll continue to look for discreet tuck-ins that deliver audience to us or offer new capabilities that offer greater consumer revenue – whether that’s ecommerce, subscriptions online or affiliate marketing. We’re always interested in making sure we continue to leverage our online data in appropriate ways, so digital will be a really important focus for us in coming years.
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