When Charles Stubbs left YellowPages.com to take the helm at Primedia Inc. in mid-2008, his new employer was at a critical juncture. Primedia’s market sector — apartment rental and home listings — was rapidly switching from print-based media to digital. Then, a couple of months later, the financial crisis struck, pushing the economy into recession and knocking the bottom out of the real estate market.
“I joined Primedia at an interesting point,” Stubbs says. “We’re essentially a real estate advertising business. Our mission is to help consumers find a place to live, whether they’re looking to rent a single-family home, live in a multifamily complex or purchase a new home. That’s our bread and butter.
“Obviously, being in the real estate business has been an interesting challenge over the last several years. There’s no doubt that when you cater to your clients and they suddenly go through a period where they’re suffering, it’s going to have an impact on your company as well.”
So with the housing market ailing, Primedia’s business went south for a while. But Stubbs recognized that there was important work to be done during those lean times.
The signals were coming from all directions: In order to get through the recession and emerge at the other end in good shape, Primedia — which had been tentatively dipping its toe into the online media pool for almost 10 years — would have to jump all the way in and start swimming.
“All you have to do is listen to your customers,” Stubbs says. “The first two months I was on the job, I went on a number of customer sales calls. About 90 percent of our time was spent on digital media: what our strategy was with ApartmentGuide.com in particular, and what we were doing to win in that space. Very little time was spent on print media, print distribution and the opportunities around that.
“At the same time, it was obvious that there was so much more usage online — just phenomenal apartment lookup usage online.”
The print-to-digital exodus was under way, and Primedia wasn’t in a position to reap much benefit from it.
“The digital migration was happening,” Stubbs says. “Our board realized this. Even though Primedia was continuing to have revenue growth, our business was starting to lose market share to digital-only players.
“So we decided we’d better use that downtime the best we could, to take what was traditionally a print business and move it over to digital. That has been our focus. I think we have used that time very well. We had a print business with more than 30 years of heritage, and in a short period of time, we’ve converted it into a vibrant, almost exclusively digital business.”
The 850-employee company had 2010 revenue of $232 million and went from a public company to a private one in 2011.
Build the team
How did Primedia make the switch from print to online-based media during these last four recession-choked years? First, it circled the wagons and made sure it had the right team in place, with every team member on the same page communicating clearly and pulling in the same direction.
“The first thing you need to do is spend some time with your team,” Stubbs says. “Being a new CEO, sitting down and meeting all the team members, especially the senior team members and making sure that they’re on board with the idea that we have to become a digital leader in this space — that while print has provided tremendous success for the last few decades, it won’t take us where we want to go for the next several decades.”
Making sure the proper players were in place was the essential first step Primedia had to take before it could make the transition from print to digital.
“You have to identify the right team,” Stubbs says. “You have to bring everyone together and make sure they believe in the core strategy. You have to spend time with all the people on the existing team to understand their views, their successes, how they view the business and the opportunities around it and also to see how they adapt to change. Do they embrace change or are they reluctant?
“When you have a traditional business that’s had a lot of success, it’s difficult to reach the realization that those attributes won’t define success moving forward — that you really are at an inflection point. That was only accelerated by the economic crisis we were going through. So it’s really about investing time, understanding the team members and their strengths and observing how they adapt to change. And then, obviously, augmenting the team in areas where you see that you need additional skill sets.”
Once Primedia got its lineup in place, it had to make sure everyone was on the same page, communicating and collaborating smoothly.
“I’ve found in my career that you can have a lot of A players, but they won’t take you where you want to go unless they’re communicating well and working together as a team,” Stubbs says. “That’s paramount, especially during a major transformation of your business. It takes all the energy you have. It’s a lot of hard work. It requires real commitment and real dedication to working together. The teamwork environment is critical.”
Primedia’s leadership team recognized that the communication factor was vital, so it spent a lot of time, effort and energy making sure the right elements were in place to promote the quantity and quality of give and take that would be needed to successfully steer the company through the transition from print to digital.
“It wasn’t that we did anything particularly fancy; it was mainly about investing time to make sure it was working,” Stubbs says. “We had regular weekly meetings. We had specific meetings around subject matter areas. We created a number of cross-functional task teams, because one thing I’ve learned about the difference between traditional media and new media is you have to work cross-functionally especially well, from sales to product to technology to operations. All of those areas have to be integrated, to encourage the teams to come back with creative solutions that can be executed upon.”
Take small steps
Once Primedia’s leadership felt it had its teams assembled and everyone pulling in the same direction, the leadership team began focusing the company’s vision on incremental successes, on rebuilding and restoring its salespeople’s confidence, and on recognizing that it would have to take chances and risk failures in order to set itself on a winning path.
“Over the previous decade, Primedia had ventured into online media and did have somewhat of a digital presence, but it hadn’t lived up to expectations,” Stubbs says. “At the same time, we recognized that we were going through a very tough period with the economy and with the real estate market, so we felt it was important to demonstrate that we could have incremental successes to build confidence that we could execute and win, a little at a time.
“We focused on things such as creating basic scorecards, measuring success month by month, and beginning to look and see steady progress that gets you to an end result.”
The bleak business climate had taken an especially harsh toll on Primedia’s sales staff, so restoring morale in that area was a major focus area for the company’s leadership team.
“That was an overarching thing during the tough economy,” Stubbs says. “We’ve really had to work hard at restoring confidence in our salespeople. During the toughest parts of it, a lot of them seemed to lose some of their swagger, so we had to rebuild that while demonstrating that we have the absolute best product for our clients in the marketplace.”
Restoring the sales staff’s vitality has been a multistep process for Primedia.
“It’s one step at a time,” Stubbs says. “It’s coming up with new pricing schemes and mechanisms. It’s coming up with a number of new products and bundling and packaging those together, creating a number of short-term sales incentives, creating a number of marketing summits to bring clients together and educate them about the change in the business.
“And not only to educate the clients, but to educate the field salespeople on how this is a new game and this is a company they should be proud of — and telling them, ‘Look at the innovation and investment we’re putting into it, which is unparalleled compared to our competitors.’ It’s step by step, and I feel we’ve made great progress in this area.”
Another important element in Primedia’s successful switch from print to digital during the recession has been the company leaders’ acknowledgement that you have to be willing to risk failure to win.
“We realize we’re going to have to try things and test things and risk failing,” Stubbs says. “But that’s OK, because we understand the bigger picture of what we’re trying to accomplish. And you have to manage the failure; you never want to fail too big and create real harm.
“It’s mainly about testing things. Whether it’s multivariate testing online or giving consumers different opportunities to interact with your family of websites or launching new test products in a half-dozen markets and seeing if they resonate with your sales force and your clients.
“We’ve had a number of new products that didn’t make it, but we’ve learned from them and incorporated them into successive product lines that we’ve had great success with.”
Keep looking forward
All of the effort has borne fruit for Primedia. The company has made big strides in its transition from print to digital media and positioned itself well for future success online.
“When we began this journey, only about 30 percent of all the consumer interactions with our properties were digital; 70 percent were print,” Stubbs says. “We’ve been working on changing that for the last four years, and we’ve now reached the point where it’s 92 percent digital and 8 percent print. And back when we started, mobile didn’t even exist. Now mobile alone is three times the size of print for us.
“If you look at our overall lead growth, we’ve been able to increase the leads we provide our clients at a compound 25 percent annual growth rate for the last five years. And with the consolidation of ApartmentGuide.com and Rent.com, we’re approaching between 8 and 9 million monthly unique [users], which is nearly triple the next competitor in our space. We’ve continued to dramatically grow our audience.”
Primedia’s leadership team isn’t spending much time looking back at what the company has achieved, though, because the pace of change keeps accelerating in the online marketplace.
“Every day, you have to continue to be aware of the competitive landscape and force yourself to continue to innovate so you can continue to be a leader,” Stubbs says. “I don’t think anyone in the digital space can afford to rest on their laurels.
“You have to be conscious that there are always disrupters out there, new start-ups looking to disturb traditional business models and change the game. There are countless case studies of those in the digital arena.
“Obviously, we want to continue to have success and continue to gain share and own our space. We’re going to have to challenge ourselves every day to continue our leadership position. We don’t take it for granted for one minute.” <<
How to reach: Primedia Inc., (678) 421-3000 or www.primedia.com
THE STUBBS FILE
Name: Charles Stubbs
Title: President and CEO
Company: Primedia Inc.
Education: Bachelor’s degree in history, Cornell University; MBA, Vanderbilt University
What business leadership lessons did you learn during your time in school that you use today?
While an undergraduate, I had the opportunity to be involved with the business side of a daily student newspaper, on the advertising-circulation-distribution side, so I learned a lot about the fundamental building blocks of the business. I also learned that it’s important to invest a lot of time with your people and to build a great team, because they’re the ones who are going to get the job done. No one individual is going to do it.
What was your first job, and what business lessons did you learn from it?
When I was in seventh and eighth grade, my parents owned a couple small gift shops in Dallas. I worked the cash register and in the back room packaging and shipping. From watching them, I learned that it’s important to hire good people, train them well, and treat them well.
Do you have an overriding business philosophy that you use to guide you?
If you tell someone you’re going to do something, follow through with it. And if you work hard and have high integrity, success will come — not overnight, but over time.
What trait do you think is most important for a CEO to have in order to be a successful leader?
You’ve got to be able to win the hearts and minds of a good percentage of your team. You’ll never get 100 percent, but you’ve got to be able to get people to believe in a common vision and to follow you. And while it’s important to hold your people accountable, it’s even more important to have everyone hold each other accountable.
What’s the best advice anyone ever gave you?
My parents always told me to work hard and be honest and do what’s right, and that often people win simply by outworking others.