Gannett announced a strategic restructuring on Wednesday that will scale back its management efforts focused on publishing, while elevating its small but growing digital marketing services business to one of its two business units. I was allowed to.
Maribel Perez Wadsworth, who was already responsible for USA Today and its regional USA Today network of 250 newspapers and sites, became president of its publishing arm, Gannett Media.
Two other publishing executives — Kevin Gentzel, chief advertising and revenue officer for the past seven years, and Bernie Szachara, president of US publishing operations — are leaving the company, as reported by USA Today. .
The move puts a new focus on digital marketing. Digital marketing currently generates only about one-seventh of the company’s total revenue, but it’s growing, profitable, and has good prospects for the future.
We spoke with Chris Burton, who has been promoted from Chief Product Officer to President of the new division in his new organization. “It’s small, but it’s already big (with annual sales he’s over $450 million).”
It also “fits in connecting with local communities by supporting local businesses,” using a variety of digital marketing solutions. These include prospecting, technical support, and performance information flow. It also includes advertising on Google and Facebook. This is now a powerful force in local marketing.
The unit’s business model also fits Gannett’s current focus on the publishing side of digital subscriptions, he said.
Gannett acquired digital marketing business ReachLocal in 2016. Barton, who previously worked at Microsoft in product, joined the deal. ReachLocal is based in the Los Angeles area, and although the company’s headquarters are in Northern Virginia, Barton will continue to work primarily from there.
He said the reorganization “justifies” the large role the department plays in Gannett and helps streamline reporting relationships.
Digital marketing started appearing in the newspaper industry ten years ago. This was typically done as an offering to advertising clients who lacked the resources to launch such programs on their own.
That’s still part of the customer base, Barton said, but only a fraction. It is also sold internationally, including Canada, Australia, New Zealand, and the UK, where Gannett owns a large regional Newsquest group.
Barton said he was proud of the digital marketing group’s double-digit revenue growth last year, saying, “Our level of investment is high and we are growing our business at the expense of profit.”
Gannett now describes itself (as in its latest earnings report) as “a subscription-driven, digitally-focused media and marketing solutions company committed to empowering communities to thrive.” I’m here.
That and restructuring does not mean that publishing is being pushed aside. One of the company’s announced biggest goals is to rapidly build paid digital subscriptions to USA Today and publications in the region, increasing from his 1.75 million today to 6 million by 2025. Our goal is to
For print, the ambition is more modest, stabilizing a traditional business whose subscription numbers and advertising revenue are declining precipitously.
As I said before, Gannett, like other newspaper and magazine groups, seems to really mean it now that CEO Mike Reed is talking about digital transformation. That said, when print runs and advertising revenue are shrinking but still looming large, it’s a kind of juggling act.
Think of this week’s restructuring as another indicator that Gannett is betting on something that’s grown and digitized, rather than just big.