Bustle Digital Group's Jason Wagenheim explains his company's difficult decisions
When I first met Jason Wagenheim of the Bustle Digital Group, it was right when New York City started to lock itself up. The BDG offices were empty thanks to the company's newly introduced work-from-home policy, but it still seemed sensible to meet in person to learn more about BDG's broader vision.
At that time, Wagenheim – a former managing director of Fusion and Condé Nast, who joined BDG as chief revenue officer before becoming president in February – admitted that we were in a phase of uncertainty, but was cautiously optimistic about that upcoming year.
Since then, things have been pretty difficult for the digital media industry (like the rest of the world). A rapid reduction in advertising spending led to layoffs, vacations and wage cuts. BDG (which owns real estate like Elite Daily, Input, Inverse, Nylon and Bustle themselves had to do their part of the cuts and lay off two dozen employees, including all of The Outline's staff.
When I checked in again at Wagenheim, he told me that he expects advertising revenue to drop 35% this quarter. And where he once hoped that BDG would generate $ 120 or 125 million in advertising revenue this year, he's now trying to find out what our company looks like at $ 75 or $ 90 million.
At the same time, he insisted that executives were determined not to completely dismantle the companies they built and to be prepared whenever advertising came back.
We also discussed how Wagenheim dealt with the layoffs, how the company is reinventing its event sponsorship business, and what trends it sees in remaining ad spend. You can read an edited and compressed version of our conversation below.
theinformationsuperhighway: We should probably only start with the elephant in the room, which means that you had to do some cuts recently. You were hardly the only one, but do you want to talk about the thinking process behind it?
Jason Wagenheim: Yes, we finally had to say goodbye to about 7% of our team, and we had an 18% company-wide salary reduction for those who earned over $ 70,000. And then we had 30% wage cuts for managers.
You read about it, I'm sure of it. It was a very, very difficult decision. We spent two weeks planning, dozens of spreadsheets, and negotiated with our investors about a plan that would keep the company moving but had to be very sober to the reality of what was going on around us. But it wasn't important for us, our management team, to disassemble the company that we have built over the past 12 to 18 months.