Gannett announced a strategic reorganization on Wednesday, reminiscent of senior management’s focus on publishing while elevating its smaller but growing digital marketing services business to one of two operating units.
Maribel Perez Wadsworth, already in charge of USA Today and the regional USA Today network of 250 newspapers and sites, becomes president of Gannett Media, the publishing division.
As USA Today reportedtwo other publishing executives — Kevin Gentzel, the top advertising and revenue executive for the past seven years, and Bernie Szachara, who had served as president of U.S. publishing operations — are leaving the company .
The move emphasizes digital marketing, which currently only generates about a seventh of the company’s total revenue, but is growing and profitable, with other good prospects for the future.
I spoke with Kris Barton, promoted in the new structure from chief product officer to president of the new unit. “It’s smaller,” Barton said, “but it’s already a big business (over $450 million in annual revenue).”
“It also aligns with our connections to local communities by helping local businesses” with various digital marketing solutions. These include lead generation, technical support and a performance feed – plus advertising on Google and Facebook, a powerful force now in local marketing.
The unit’s business model also aligns with Gannett’s current focus on digital subscriptions on the publishing side, he said, as customers pay for a bundle of services delivered monthly rather than for them. buy piecemeal.
Gannett bought a digital marketing company, ReachLocal, in 2016. Barton, whose previous experience included product work at Microsoft, agreed to the deal. ReachLocal was based in the Los Angeles area, and Barton will continue to work primarily from there, even though the company’s headquarters are in Northern Virginia.
The reorganization, he said, will help “legitimize” the important role unity plays at Gannett and streamline reporting relationships.
Digital marketing started appearing in the newspaper industry a decade ago, usually as an offering to advertising clients, who lacked the resources to develop such programs on their own.
It’s still part of the customer base, Barton said, but only part of it. The service is not limited to Gannett markets, he said. And it’s sold internationally, including in Canada, Australia, New Zealand and the UK, where Gannett owns major regional group Newsquest.
Barton said he’s proud the digital marketing group has delivered double-digit percentage revenue growth over the past year, “and our level of investment is high, growing the business at the expense of certain benefits”.
Gannett now describes itself (as in its latest earnings report) as “a subscription-based, digitally-focused media and marketing solutions company committed to empowering communities to thrive.”
That and the reordering don’t mean editing is out of the way. One of the company’s major announced goals is to rapidly build paid digital subscriptions to USA Today and its regional publications, with a goal of growing from 1.75 million now to six million by 2025.
For print, the ambition is more modest: to stabilize historical activity where the number of subscriptions and advertising revenues have fallen precipitously.
As I’ve noted before, Gannett – along with other newspaper and magazine groups – really seems to be saying it now when CEO Mike Reed talks about digital transformation. It’s kind of a juggling act, though, as print circulation and ad revenue still loom large even though they’re contracting.
Consider this week’s reorganization as one more indicator that Gannett is betting on what’s growing and digital as opposed to what’s just big.