NY Times plans to turn its T Brand Studio into an agency

The New York Times plans to convert its T Brand Studio, which handles the newspaper's native advertising, into a digital marketing agency as a way to increase its reach and sell other services to advertisers. The publication giant has set a target of doubling its digital revenue to $800m by 2020 and hopes that the agency look and feel will enable them to do so. T Brand is on target to contribute 20% to 30% of the newspaper's digital ad revenue in 2016.

When The New York Times’ T Brand Studio opened for business two and a half years ago, it sold marketers including Netflix and Cole Haan on the idea that it could create splashy, multimedia articles that could be taken for Times journalism, worthy of sitting alongside actual stories on the NYTimes.com homepage.

But today, T Brand Studio’s output is just as likely to be stripped of the Times logo and run on a marketer’s corporate website. The Times is expanding T Brand into an agency, with the full array of marketing products and services. The Times set a goal of doubling its digital revenue, to $800 million by 2020, and this is one of the ways it plans to get there.

Increasingly, the Times has produced work for marketers including Philips, Charles Schwab, Nike and Deloitte that’s run outside the Times site (the way T Brand is set up is that the client owns the content). For Philips, it has a five-person team that acts like a mini-newsroom, producing long-form articles for the electronics company on an ongoing basis. One-third of T Brand’s business is now coming from agency-type work, the rest from native advertising. All in all, the studio is on track to produce more than 100 campaigns and contribute 20-30 percent of the Times’ digital ad revenue this year.

“We were seeing that, as the brands were approaching us through the lens of native advertising,” said Sebastian Tomich, svp of advertising and innovation at the Times. “If you took the Cole Haan video off our site and ran it somewhere else, it holds its own just like work a creative agency would do.”

That agnostic approach might seem surprising, coming from a publication that takes great pride in its heritage and audience. But increasingly, marketers are bypassing traditional publishers for Facebook and Google, raising the question of how much publishers’ audiences are needed at all. Native advertising, the type that passes for editorial, is hard to do well, at scale and profitably. So publishers like the Times are trying to act like agencies as they look for ways to stretch their expertise so they can sell advertisers other goods and services.

Honing agency skills

T Brand has swelled to 100 employees in two and a half years. Tomich says the agency approach will help the Times justify having such a big staff and give it an entree into ad categories such as fast fashion, beauty and packaged goods that haven’t been in the market for its native ads, called Paid Posts.

The Times has impressed advertisers with the quality of its Paid Posts. But being an agency takes different skills. Marketers expect always-on hand-holding from an agency, and salespeople aren’t inherent project managers. The Times has developed an expertise making Paid Posts that tend to read like editorial articles, not the promotional-sounding articles that a marketer is more likely to want for its own site. And there are a lot of places that sell that type of content to clients.

The Times is making some adjustments. Tomich has hired an audience development team of seven to provide the ongoing reporting on campaigns that clients expect from an agency. It’s opened an outpost in London and plans to add staff in Asia later this year, to appeal to clients wanting an agency with global reach.

Luxury clients tend to want product-centric content, so T Brand hired Tracy Doyle as creative director for fashion and luxury to take care of that sector. It will probably hire more people to write white-label content, said Adam Aston, vp, editorial director of T Brand Studio.

Long-form, thoughtful storytelling is “still very much at the root” of Paid Posts, Aston said. “And that works. It’s handmade, it’s different. But that said, there’s a natural bookend to that kind of story. Advertisers want to tell ‘my side of the story.’” Tomich was quick to stress that the Times isn’t just “going to hire a bunch of copy editors because then we’ll be like everyone else.”

Handling conflicts

Tom Blim, partner and chief strategy officer at content shop (and T Brand rival) Group SJR, said selling media and agency services at the same time makes T Brand Studio “incredibly conflicted,” though. How does the Times ensure the client they’re not incentivized to just sell the media, he wondered.

Tomich said the Times is “platform-agnostic” and that the content’s destination is an early part of the discussion with clients. “There’s no incentive to push media,” he said. “If the client is only interested in creative work, we’re only going to push creative work.”

In pitching its new services, the Times is going up against not just established agencies but also other publishers that have been expanding into this area. Eighty-one percent of native advertising is bought by media agencies, but 67 percent of publishers are selling directly to brands, according to a survey by Polar, a native ad platform. One early mover in this area was Atlantic Media, which set up Atlantic Media Strategies four years ago to provide consulting services to brands, separate from Re:think, its native advertising division.

“The value of having them separate is that AMS can have a relentless approach as a consultancy and Re:think can be focused on storytelling,” said Bob Cohn, president of The Atlantic. “They’re different skill sets and different missions.”

The Times’ track record will help. “Given the level of excellence T Brand Studio has demonstrated since inception and considering their deep bench, I would consider using their content-creation services if they are competitively priced,” said a marketer at a blue-chip brand, who couldn’t speak on the record because of ongoing discussions with the Times.

Tomich argued that the Times has an edge in that it can charge less than a traditional agency, citing a fee of $100,000 to $150,000 for an average production cost for a multimedia campaign. Sixty-one percent of publishers use freelancers in their branded-content production, according to the Polar research. Tomich said one of the Times’ other big selling points is that it has a large, full-time staff that is adding standing video and VR teams so it can handle clients’ work in house.

“We’ve done a great job being first,” Tomich said. “But we’re very aware that the first-mover advantage expires quickly.”