Prior to attaining his current post, Wallace was Editor-in-Chief of Conde Nast Traveler. During his tenure the magazine won two National Magazine Awards, including one for General Excellence. He also supervised public television series Conde Nast Traveler: Insider's Guide. Before joining Conde Nast, Wallace held editorial positions at The New York Times, Newsday, and the Stamford Advocate.
This is the latest in an ongoing series of question-and-answer sessions between Rory O'Connor and leading American media executives. Previous conversations have featured CNN chief Jonathan Klein, Fox News head John Moody, Time magazine Managing Editor Richard Stengel, and others.
•What are your top three challenges at Conde Nast?
•Was the company late in adopting and adapting to the Internet?
Were we late to the Internet? I don't really think so we were just careful. Don't forget that what this place is all about is really clear: making and selling the best possible magazines we can. So there are lots of reasons to move to the Internet but the number one reason here was to gain circulation for our magazines. In 2005, for example, we - like many others in the industry - were faced with the problem of declining circulation.
For one thing, because so much about the American population is different than when the old print circulation systems were originally set up. People don't get their mail in the same way as they used to; they don't answer the telephone the way they used to; they aren't even home at the times they used to be. So much has changed... In the past, we would attempt to boost circulation through such traditional means as direct mail. Using direct mail is a relatively expensive and not very targeted way to attract new readers drawn from a massive, undifferentiated pool. Only a small percentage of those targeted actually sign up as new readers, and the retention rate of readers acquired in that manner is usually not high - which means that you have to go out the next year and every year and repeat that costly process.
But in using the Internet to gain circulation, the entire process is quite different. For example, if we look at Self and the Self.com web site which right now is our number one magazine site - we can see what I mean. At Self.com, we were able to generate 115,000 new subscriptions in one year. The cost of acquiring these new readers was far less than if we had to resort to direct mail, because they were simply coming to the site and signing up. Moreover, they were self-selecting. As opposed to those acquired by a broad direct mail appeal, these were people who were already interested in the magazine and what it offered them. Since they are self-selecting, the retention rate is much higher than those acquired through direct mail. And since they were web-savvy, they also tended to be younger on average six years younger, in fact.
•So what's the bottom line?
It means that by switching to the Net and not using direct mail to gain circulation, we were able to save about half the cost of the solicitation and transaction, while at the same time retaining more new subscribers and lowering our demographic, with the additional benefit that their youth and longer lifespan meant they were likely on average to stay with us for a longer period. So Self succeeded in attracting and retaining new and younger subscribers at a much lower cost than previously. And gaining subscribers, as I said, is the primary purpose of our magazine web sites as distinct from our 'destination' sites (operated by CondeNet, the Internet unit of Conde Nast publications) such as Style.Com or Epicurious.com, which attract far greater numbers and are ad-supported, We of course do see some ad revenue from the magazine sites, but the traffic is not so high that it is at present a significant revenue stream. But again, that's not the purpose of those sites.
•How has the Net changed your culture? Is it a shock of sorts?
So is the technology. Video, for example, is clearly where the Internet is heading, and we're going to have to go along with that as well. But speaking as someone who edited a magazine for years, and was largely concerned with text and still images what do we as magazine editors know about video? But we'll all have to learn.
So is it a culture shock? Absolutely yes but there's still no doubt that the Internet is nothing but a good thing for magazines and the magazine business.