Media Executive Tries New Tack on Ads

Chief operating officer of NewYork Times seeks higher rewards with riskier strategy

Meredith Kopit Levien pursues nontraditional advertising pacts.

At the annual advertising festival on the French Riviera two summers ago, top New York Times Co. executive Meredith Kopit Levien sipped rosé with marketing executives from Samsung Electronics Co.
 She brought a high-profile guest: Times columnist Maureen Dowd. At Samsung's virtual- reality installation, the group took turns trying on the latest goggles to immerse themselves in an interactive theater experience. A formal ad-sales pitch soon followed from Ms. Levien's team.
 Months later, the companies sealed a deal: the $14 million, 15-month commitment included Samsung “360” cameras distributed to hundreds of Times reporters, as well as heaps of ad space. The resulting 360 videos got prominent placement, some on the website's home page, and they carried a credit for Samsung.
 It is the kind of nontraditional pact that Ms. Levien, who became chief operating officer last year, has pursued as she tries to steer the Times through unforgiving waters in publishing.
 Through the Samsung deal and others with the likes of General Electric Co. and BMW AG, the 47-year-old executive is upending the Times century-old ad-sales strategy, shifting away from one-off ad placements of the low-six-figure variety, in favor of more elaborate and lucrative deals that resemble corporate partnerships.
 The approach has helped boost digital-ad growth substantially, but because it relies on fewer, larger ad deals, it is prone to dry spells. The company attributed its 6% digital-ad revenue decline in the March quarter to the volatility of these strategic deals. A 7.5% decline in digital-ad revenue in the second quarter was driven by weakness in the unit that does custom ad deals with marketers, as well as a smaller web audience.
 “It all takes time and thought and work and that makes for a lumpier business,” Ms. Levien said in an interview. She added, “When we sign a big deal, it's not going to see the light of day for sometimes three or six months.” It's worth it, she said, because the old ad business — which she describes as selling rectangles of ad space in the paper or on the website — “is just falling away.”
 Last year, the Times' revenue grew 7.7%, powered by a run of digital-subscription sales tied largely to interest in politics and the Trump era. Digital-ad growth was 14%, a strong performance in an industry where Alphabet Inc.'s Google and Facebook Inc. are snatching a large share of ad dollars, though it wasn't enough to offset weakness in print that resulted in a nearly 4% contraction in overall ad revenue.
 Most major news publishers, including The Wall Street Journal, have experimented with new business models and novel sponsorship arrangements as the print business has been battered. Several papers including the Journal have “branded content” units separate from the newsroom, for example, that specialize in producing advertising material that is meant to have the feel of journalism. Sponsored online sections and conferences are more common throughout the industry. The Journal has also hosted events with marketers attended by journalists and ad executives from parent company Dow Jones.
 The Times has been among the most aggressive outlets at pitching nontraditional ad deals, advertising executives said. Ms. Levien said the Times has put in place strict rules to protect its news standards, including clearly disclosing to readers when content is sponsored by a brand.
 Referring to the content created via the Samsung partnership, she said, “This was journalism,” adding, “this was not branded content.” Dean Baquet, executive editor at the New York Times, said that nothing has changed with regard to the advertising division's relations with the editorial operation, which has always made its own decisions about coverage.
 The difference today, he said, is that questions about the appropriate line between business and editorial come up more often. “In the print era, you created something. It worked or didn't work,” he said. “Now, we're in an era where those conversations happen more frequently and we have to move faster.”
 The Samsung 360 deal “caused controversy in the newsroom, and I get that,” he said, adding that he didn't force anyone to create stories with Samsung devices and “some found it really cool.”
 Ms. Levien has become a fixture on the Madison Avenue scene. “If you look at how crowded and noisy this market is, visibility matters. She's in the room when the right conversations are happening,” said Wenda Harris Millard, vice chairman of ad and media consultancy MediaLink.
—Lukas I. Alpert contributed to this article.

Changing Times

Subscriptions have powered growth at the New York Times while digital ad revenue is strong but can be volatile.

Source: the company