Goldman Internet: MSLO’s Lyne: Growth Built On Cupcakes, Weddings

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Susan Lyne, president and CEO at Martha Stewart Living Omnimedia (NYSE: MSO), led off her presentation at day two of the Goldman Sachs Internet Conference by telling attendees that unlike most of the companies at the Las Vegas event, she would have a lot to say about the value of cupcakes and weddings.

Online Ad strategy: During the Q&A, Lyne was asked about the company’s online sales goals. “We have built an online ad sales force of 12 people and are beginning to train the rest of the sales team. We also plan to expand our online sales staff, we have to. Our sell through rate is 40 percent and all of our key sales positions are sold out. We are seeing improvements in sell through every month. Going forward, we’ll lean more on the broadcast model, meaning that if you want key positions, you’ll have to buy run of site too. We’re also selling others’ inventory. And we’re looking for partnerships outside our ad networks. These partnerships would be with larger outside entities where we can achieve significant scale. More about MSLO’s investment strategy and video plans after the jump.

Call it a comeback: MSLO has mounted a successful comeback since our Stewart’s insider trading legal troubles a few years ago, Lyne said. Last year was key and “not just because it was a return to profitability.” The company began seeing strong growth across internet and TV properties and new merchandising launches. Lyne: “Looking at this year, it’s all about sustainable growth. We’re going to expand the brand portfolio, focusing on certain franchises, including weddings, holidays and food.”

Investments: She mentioned MSLO’s investments in community site WeddingWire and in Emeril and how the company can capitalize on them now that it has the infrastructure to handle more growth. “Emeril is the perfect business for us, as we know how to grow a business around a personality.” As for MSLO’s content, Martha has emphasized the creation of “evergreen content,” which can be reused over and over. As a result of its ability to recycle its content, online ad revenue grew 31 percent in Q1, as traffic was up. “We’re taking the lead from our users and update the home page based on where we see the most use. Women follow a calendar: holidays, graduations, and we are programming for that calendar. Launching more features like photo galleries and driving more features from our TV show to the website. That’s why we’re seeing more traffic. Pageviews gained 43 percent, uniques are up over 50 percent.” Durting the Q&A, Lyne said the company is looking at sites that have tools that can enhance its current offerings and sites that can relate to MSLO’s user-base — in particular in the wedding and holiday categories — are priorities.

The community: Martha’s blog generates 600,000 pageviews a month. “We’re experimenting with a four-week or six-week program, signed up users for an Easter program. Another example, this is the kind of thing you won’t be hearing about from other companies at this conference. We did a cupcakes contest that was featured on TV and on the web. It sounds bizarre; it helped us connect with consumers and advertisers. We invited users to upload photos to the site and drive 3 million pageviews. This is something we’re going to be building more of. Advertisers will be paying more of a premium for coveted space on our site, unlike a lot of other community sites. We bought 40 percent interest in Wedding Wire. Our wedding site had been a place that brides came to for inspiration. But they couldn’t really plan their weddings with us. These new tools allow them to do that. They can get a florist, send out invitations to sending out thank you notes. We will be able to use these tools in our other content segments.”

Syndication deals coming soon: We are talking to everybody you would expect about syndicating our video, but nothing to announce yet.

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