Conde Nast CEO Chuck Townsend Explains The Latest Re-Org: Interview, Memo

Chuck Townsend

The Conde Nast re-org that has been hovering for weeks has finally landed, with digital responsibility for brands going to the publishers, Conde Nast Digital converted to an emerging businesses group and ad sales rolled up into Conde Nast Media. In an interview with paidContent, CEO Chuck Townsend explained the results of an executive chain reaction that started in July with the promotion of Bob Sauerberg to president and has upended one of the longest runs for a separate digital strategy. (His memo to the staff about the changes is below.) First order of business: stress that unlike the magazine publisher’s last major re-org in response to the recession, this one is not about cost or staff reduction.

“This is not driven by the economy. It’s not driven by expense management. It’s not driven by cost management. This is driven by the market,” Townsend said. “It’s about making a move at the right point in time to consolidate digital seamlessly into our businesses, whether it be approaching the consumer, approaching clients and advertisers or approaching the way we operate our business with technology as an underpinning. This is acknowledging that digital technology is front and center in our business, part of everything we do — not off to the side.” That changes a 15-year-old strategy of doing the latter, even after CND became a corporate division in 2005, he said.

Here’s how the exec changes break down:

Conde Nast Media Group, headed by CMO Lou Cona, rolls up all sales and marketing at the corporate level with Cona reporting to Townsend. Drew Schutte, currently SVP and chief revenue officer of CND, moves to EVP, chief integration officer, for CNMG, where he will be the lead liason between the brands and CNMG. Josh Stinchcomb, publisher of the Internet Sales Group, shifts to VP-Digital Sales for Conde Nast. Townsend: “I can’t overemphasize that today’s announcement is a left turn in the road for us. We will have a go-to-market strategy that puts all of our assets on the table. … the Conde Nast Media Group is now representing everything that we do seamlessly and they haven’t been able to before.”

The brands will add digital sales and marketing to digital content management. Each will have to produce the same kind of seamless opportunities but across the brand — everything from print and digital to events and custom, all in one stop. Publishers and editors are co-brand managers, Townsend explains, responsible for the growth strategies for their brands. “It’s not top down anymore; it’s bottom up.”

Conde Nast Digital, still headed by Sarah Chubb, will operate emerging businesses, including the standalone sites with magazine brands (Wired.com, Brides.com), acquisitions (Ars Technica, Reddit), Epicurious, Concierge, and new Gourmet Live. “Conde Nast digital will really focus on two things: 1) operating businesses that are truly in development and 2) being our corporate development arm. It’s very, very important initiative of ours. We know that acquiring and venturing and partnering the digital space is a critical part of our future.” Townsend dismissed the notion that Chubb is losing power with this change. “She’s certainly not losing responsibility. She’s a key, key player. … She’s the top digital executive in the corporation.” He said choosing to operate the print and digital together as one brand is more of a philosophical change, not a “plus or minus” for anyone. Chubb reports to Sauerberg.

For Townsend, these moves confirm the course he set in July with Sauerberg’s appointment: “We’ve broken down the walls between various divisions.”

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From: Townsend, Chuck
Sent: Tuesday, October 26, 2010 4:05 PM
To: Conde Nast – All
Subject: Business Update – Strategic Realignment

In July, we announced a strategic refocus of our Company and identified three clear priorities to ensure our future growth and success: a consumer-centric business model, a holistic brand management approach and the establishment of a multi-platform, integrated sales and marketing organization.

Today, we made a significant step toward accomplishing our goals by setting in motion a structural realignment of the organization, and I wanted to take this opportunity to share my thoughts on the importance of our mission.

• Our commitment to consumer centricity is evident in the talent we have assembled in the short time since Bob Sauerberg became President. We have named Joe Simon as our new Chief Technology Officer – combining all of our technology capabilities under his leadership. We appointed Monica Ray, EVP, Consumer Marketing, to spearhead our consumer-driven strategies in both print and digital, and tapped Julie Michalowski, SVP, Consumer Business Development, to lead our efforts in licensing and the expansion of product offerings. As technology continues to facilitate greater connectivity with our consumers, Sarah Chubb and Debi Chirichella will be instrumental to this effort as we work to ensure that our digital capabilities are seamlessly integrated into all that we do. Sarah Chubb, President of Condé Nast Digital, will be responsible for developing and implementing the corporate digital growth strategy. She will continue to oversee content and operations for our emerging digital businesses, such as Wired.com, Brides.com, Epicurious, Concierge, Ars Technica, Reddit, Gourmet Live, and expand our portfolio via the acquisition or start-up of other digital businesses. Debi Chirichella, COO, Condé Nast Digital, assumes the lead for all digital finance and operations – handling P&L management for websites and digital products. This includes financial planning, investment approval to maximize ROI, and metrics-based tracking and measurement. (Debi also continues in her role as COO, Fairchild Fashion Group.)

• To optimize brand revenue growth, we will shift responsibility for single-site, digital sales and marketing to the brand level. Publishers can now fully leverage their offerings across all platforms. Next month, we will begin newly established brand management meetings where the publishers and editors jointly discuss the growth strategies for their brands.

• The Condé Nast Media Group, under the direction of Lou Cona, our Chief Marketing Officer, will become an integrated, multi-platform, multi-brand sales and marketing powerhouse. Our clients expect us to lead the way with a seamless, go-to-market strategy and we are fulfilling that promise. Drew Schutte is being named EVP, Chief Integration Officer of CNMG. In this newly created role, Drew will serve as the primary liaison between the CN brand publishers and the CNMG. He will oversee all pricing, planning and creative marketing in support of the integration of our print and digital, single-site brands. Josh Stinchcomb has been appointed VP, Digital Sales of CNMG. As we integrate digital sales, Josh will work in tandem with Tom Hartman to transform the group.

These changes are certain to stimulate higher levels of growth and encourage innovation in all that we do – but perhaps most importantly, they will ensure the brightest future for Condé Nast.

I look forward to working with all of you to realize our greatest potential.

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