As the CEO of Bloomberg Media Group, Justin Smith is leading change. His goal is to broaden Bloomberg’s media audience, operations and reputation from finance to business. It’s an ambitious plan that includes the launch of Bloomberg Business as a general-interest flagship brand that spans Bloomberg BusinessWeek in print and Bloombergbusiness.com online—with the motivation to take on competitors like The Wall Street Journal and Financial Times. There will be a series of new product rollouts in vertical sectors, such as Bloomberg Pursuits for luxury.
At the heart of the strategy is a new rhythm of working that’s multiplatform and as agile as a startup. Smith’s change strategy has already recruited leaders from Madison Avenue to raise Bloomberg’s profile and commitment to the advertising world. He hired former Time Inc. executive Paul Caine to be global chief revenue officer and IPG Mediabrands’ CEO for North America Jacki Kelley as chief operating officer.
Smith, who joined Bloomberg in September 2013, is a change-agent. He has championed high-profile launches, turnarounds and startups. Most recently, as president of US-based Atlantic Media, he led the title’s dramatic transformation from a largely print-centric magazine to a digitally led multiplatform franchise. Smith started his career in Hong Kong, where he built a conference business for the International Herald Tribune newspaper in 1993, and previously worked for the US Department of State as a diplomat in Africa. Since then, he has held various corporate strategy roles at The Economist in London, New York and Hong Kong, and at Dennis Publishing’s The Week in the US.
Atifa Silk: Where do you see risk in today’s media model?
Justin Smith: The changes taking place in media are intense and transformational. They’re historic on so many levels. There is both a tremendous amount of risk that you see every day, but also opportunities. When you look at the media landscape and try to ascertain which media models are going to thrive in the future, you see that it’s the ones that are going to be able to sustain through the change, reinvent themselves and innovate. Many of the larger traditional media businesses are having a hard time adjusting their business models, products and cultures to this changing world.
Atifa Silk: Which media companies, in your view, are leading innovation, and how?
Justin Smith: I believe most of the innovation that’s taken place in media is among the smaller startups. There are very few examples of innovation and transformation at the larger company level. You can’t succeed in media today with employees; you need entrepreneurs. With that talent base you need to create the right culture for them to work in. BuzzFeed is at the top of a lot of people’s lists for companies they admire, because it’s gone from zero to 150 million audience base in seven or so years. They have built their audience on social distribution, and engineered a whole new editorial distribution model around the social ecosystem. They’ve innovated and broken a lot of rules. They understand that the content model is now around distribution; a piece of content can live on its own, and as it dissipates, it goes on its own distribution journey via social and other forms.
This is not an application specifically for Bloomberg, but it’s an example of innovation. The other companies getting attention in the US are BOXmedia and Thrillist, which is a men’s newsletter that started as a small blog a few years ago and now has over US$100 million in revenue. It’s a tough market and the economics of digital are tough. But you’ve got some companies turning the model on its head, questioning all the old assumptions and breaking through.
Atifa Silk: Are these digital businesses built to last?
Justin Smith: Some will last and some won’t. The business model challenges of digital media are intense. For those of us who have been in the media industry for the last two decades, digital platforms have been the first major transformation and we are desperately trying to figure it out. How do we take content from print or TV and put it on a desktop computer? How do we take advertising from pages in magazines to an online environment? We created the banner ad and it took 10 years of moving media content and commerce, allowing commercialisation from traditional platforms to desktop, then along came the iPhone and tablets. Just as everyone was starting to understand desktop media transformation, the second wave crashed over us. It was the mobile revolution, arguably even more profound than the first. All of a sudden you are operating with a foreign factor. You layer on top of that all the new distribution platforms that have emerged and the shift from search to social, and appreciate that it’s an incredibly complex world. The pricing model from traditional to desktop and now mobile is under pressure. There will be some success stories. But those will be the media companies that are entrepreneurial, rewriting the books, and providing real value to consumers and advertisers. It’s not a business for the faint of heart.
Atifa Silk: What is your vision for Bloomberg?
Justin Smith: My goal for Bloomberg Media is to act like a startup. I was brought in to maximise the potential of Bloomberg Media. That’s the role of any leader, but my charge was to take the assets—global television, print magazines, digital and events—and transform them to be extremely competitive in the digital environment, which is the media environment of the future. Our objective is to build the world’s leading global business and financial media company across all relevant platforms and geographies. Our strategy is to build everything around the Bloomberg brand, which is powerful and global, and stands for so many positive things for consumers and advertisers alike. We want to architect and realise a true multiplatform media company that operates seamlessly across numerous platforms simultaneously, where content flows from linear television to digital video, to print, to digital text, and to live events. What’s exciting about the multiplatform opportunity is that the target audience, who are global business decision makers, with busy and complex lives—as they go through their daily schedules, they are consuming different platforms at different points of the day. We want to be present and top of mind at every moment throughout the global business consumer’s media schedule—whether that’s watching a morning television show as they are getting ready for work or listening to a podcast while commuting, dipping in on mobile apps, or having a lean-back experience at the end of the day with long-form content delivered through a tablet or in print.
Atifa Silk: What makes Bloomberg’s business resilient, beyond terminals?
Justin Smith: Bloomberg’s business model is different to other media companies. Its media business is integrated within its core financial data and information business—the terminal business. It’s the consumer distribution arm for our content and brand around the world and we view the consumer media layer of Bloomberg as a critical ingredient of the overall company’s model. So, at a time when traditional business models are being battered and have their backs up against the wall, we have a model that is strong and resilient, and rooted in a different set of fundamentals, which allows our media business—also at a time when everyone else is effectively pulling back, or desperately trying to change themselves—to use these resources and capabilities to assert ourselves in the global business media space.
Bloomberg has a very distinctive entrepreneurial culture and spirit, which makes it a lot easier for this company to navigate the change and disruption in media. At our core, we are not a traditional media company; we are a technology-based financial and data company that also does media. We don’t have that legacy burden, culturally or business model-wise, and we have Mike Bloomberg, a significant majority owner who is also deeply entrepreneurial.
Atifa Silk: Bloomberg is known for finance. What is your strategy to change that?
Justin Smith: We are probably the largest financial media company in the world. Bloomberg as a brand is extremely well known in the financial sector, but Bloomberg, the parent company, is now looking to expand even beyond the financial industry. So, we’re selling terminals to corporations, launching new subscription businesses in markets, including Bloomberg Law and Bloomberg New Energy Finance in the energy space, and introducing new businesses and verticals. We will always have finance at the core, but there’s a significant audience strategy at the heart of broadening our reach. We’ve taken our first steps in our series of new product launches to build a portfolio of brands to target different constituents of the global business audience. We don’t believe that a single brand, one-size fits all approach, makes sense in this era of media fragmentation. The best way for us to become the leading global business media company is to own a portfolio of different digitally centred brands that will each target different segments of the business audience. For example, Bloomberg Business is the flagship and the horizontal one, and we’re launched a series of other vertical brands that target different segments of the global business audience.
Atifa Silk: How is Bloomberg’s story different to its competitors?
Justin Smith: Bloomberg has not historically been part of the traditional set of media that Asian advertisers and media buyers look at. They would turn to Time Inc, Time Asia and before that Asia Week and the Far Eastern Economic Review, as well as newspapers such as the FT and IHT, and US-based magazines such as Fortune and Forbes, as well as BusinessWeek to some extent. Meanwhile, CNN and BBC dominated TV. But these traditional media players are facing many pressures and regional advertisers in major markets are grappling with the fact that these changes are affecting their media partnerships. Our story is different; we are a new, bright, shiny and powerful media player in town. We bring clients and media buyers into our offices in Hong Kong and Singapore, and they see the technology, television studios and scale of our operation. They understand the global nature of what we do, the linkages between our terminal business and our media business, and the investments that we’re making in growing our business.
We can fill that gap of where traditional media has been declining and assert ourselves to become one of the preferred partners. We are ambitious in our geographic focus but also in terms of infusing our content with international sensibility and sophistication. These advertisers are looking for that global sophisticated context, and so that is central to our brand proposition and our media proposition.
Atifa Silk: How are restructuring your offering to advertisers?
Justin Smith: We are becoming more proficient and more successful in engaging our advertising clients around what we call ideas-based selling. We see the future of Bloomberg’s advertising business as much more driven by customised idea-based multi-platform programmes that are deeply engaging to our target audiences, and that produce content experiences that are world class. We view it as our responsibility to work with our advertisers to help them develop the type of engaging campaigns and programmes that will break through. More media companies are taking on the role of working with agencies and clients to develop creative ideas that resonate with their audiences, and if we can be a leader in idea generation and creative ideation around how to engage global business audiences, and do that across multiple platforms and geographies, from either globally or a combination of global and local, we think that’s going to be a very powerful offering.
Atifa Silk: Do the economics of video work for Bloomberg TV?
Justin Smith: In some instances, you see the digital video economics superior to the traditional video economics, which is interesting. While there as been a depreciation of pricing from traditional to digital, in some instances, video has seen an appreciation of pricing. It’s one of reasons that digital video is at the centre of our plans. We are running close to sold out on a lot of our digital video inventory, in the US and increasingly around the world. But that’s the challenge of Bloomberg Television in a sense; we’re in the process of thinking through, what does a TV network mean in a smartphone, tablet and connected world? We’re seeing larger audiences of live streaming directly to tablets and desktops, which is a big part of our business, and we’re increasingly allowing our customers to move seamlessly between TV and connected devices. We’re working with the new over-the-top set-top devices that are on Apple TV and Amazon Fire. These are getting small but growing audiences. When we think of television, we think [of a] TV/digital video hybrid model.