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‘Fighting with one arm tied behind our back’: Peter Zavecz on his time with Pac Mags

As Pacific Magazines CEO Peter Zavecz prepares to depart for a new role at News Corp, he sat down with Mumbrella to discuss his three years leading the company in what turned out to be its most tumultuous and transformative period.

Peter Zavecz was made director of magazines in November 2013 following then Pacific Magazines CEO Nick Chan’s promotion to chief operating office at Seven West Media, with Zavecz finally given the CEO title when Chan departed the business entirely a year later.

PacMags-CEO-Peter-Zavecz

The last few years have not been easy for the magazine space – magazine closures, declining advertising revenue, declining print circulation.

But Zavecz has remained typically chipper throughout, and even in his final days as a proper magazine man remains its staunch defender.

“What I’m really proud of is that particularly over the past three years where we’ve had some unprecedented declines in advertising revenue we’ve been able to not only increase our share of advertising revenue, we were able to do that without the advantage of our digital assets,” Zavecz says.

According to Standard Media Index figures for the combined media agency spending across both Pacific Magazines and Bauer, spend has dropped from $164m in 2012 to $81m this year, with Pacific representing 48% of that and Bauer 52%.

“We were probably the only major consumer magazine company in the world that was operating in a very competitive environment without any EBITDA attributed to our digital assets on our bottom line.”

Pacific Magazines’ digital assets sat with Seven West Media’s joint-venture partner Yahoo7, with the company taking them back in March this year.

For Zavecz, bringing home Pacific Magazines’ digital assets is his proudest achievement.

“I was the bloke who got the digital websites back,” he says with a grin.

“It’s been 10 years of fighting with one arm tied behind our back. We’ve been limited for the past 10 years.

“The joint-venture was a great business – is a great business, but we need to go deep into categories and you’ve got to do that with all your content across the platforms and it’s very difficult to do that if half your content is in another vehicle.”

Despite getting its digital assets back just six months ago, Pacific Magazines was able to create businesses in the e-commerce and social spaces, having been able to “claw out” the two from the joint-venture with Yahoo7.

“A couple of individuals in the team here saw the opportunity outside of the JV as we were able to claw out social media and e-commerce, we saw those opportunities and built some really strong revenue streams,” Zavecz says.

“It came down to individuals here who were very innovative and very creative. We were able to eventually get our digital websites back, but in the meantime we have built some really strong, new e-commerce and digital businesses.

“We have built some stand-alone businesses like Foodiful, which is this great new website with great ideas and brilliant shopping functionality; it’s world-leading functionality.

foodiful

“We’ve built Beauty Crew. We looked at Beauty Heaven when it came on the market and we were amazed at the price they sold it for when we thought we could do better building one from the group up, and I think we have, particularly if you look at our audience figures eclipsing theirs,” he says with a gentle swipe at rival Bauer which purchased the Beauty Heaven Group in February last year for an undisclosed figure.

Zavecz continues: “Within Beauty Crew there’s The Parcel, which is the sampling business we’ve built over a period of time.

“We’ve also built Styled By Marie Claire, BHG Shop and we’re selling millions of dollars of wool and craft through BHG Shop.

“We’ve got a relationship with MyWeddings.com which will also extend into another business which we can’t talk about yet but will happen shortly and Pepperleaf, which is a food delivery business.”

“They’re all good sustainable businesses going forward,” he adds.

It’s these six new businesses and having its digital assets back in-house behind Zavecz feeling that now is the time right for him to depart the business.

“It’s leaving on a high, I’d like to feel; but also with a heavy heart. There’s no perfect time but my case the time is right because the foundation blocks are in place,” he reflects.

“The important thing is we’ve set the business up with a total audience focus rather than just a print focus.”

The challenges

Zavecz readily admits he assumed his greatest job in leading Pacific Magazines would be transforming the business, however it was the unprecedented declines in advertising revenue which he found to be his biggest challenge.

Money notes

“Transforming the business was what I thought would be my biggest challenge,” he reflects. “Transforming the business from a print-only focused business with traditional revenue streams to a real multi-platform business but also developing new revenue streams.

“To be honest, in the end our biggest challenge was staving off the declines in advertising revenue, which were unprecedented.

“That was my biggest challenge and it’s probably my biggest disappointment – that magazines have been unfairly treated by media agencies.”

Digital is not going to be the saviour

While Zavecz is fundamentally proud of being the CEO who brought the digital assets back in-house, he remains a print man to his core.

“Digital itself is just a platform, it’s not going to be the saviour, the world’s not waiting for another website,” he says.

“Print is still core. Social is just a way to extend your brand, as is digital, but it’s really the print product that is core to the brand. That’s where people pay to engage with the brand.”

Zavecz admits video has been a challenge for all magazine publishers.

“Video is a challenge for us all and we’ve been doing some great video. Some of the stop-motion recipe video we’ve done for New Idea and Foodiful and the ‘how to’ videos through Beauty Crew, all that information and advice is what magazines are renowned for and to be able to present that in video formats is a real benefit,” he says.

“It’s not the be-all-and-end-all for digital. It’s got to be relevant and true to the brand and you’ve got to be able to monetise it.”

Zavecz was reluctant to be drawn on which publishers were achieving better than others when it comes to monetising video.

“It’s a challenge for us all, there are good ones and not so good ones,” he says.

Trends and fads

During his time running Pacific Magazines many trends have come and gone but for Zavecz it’s hard to go past the phenomenon of adult colouring-in books.

“I don’t know where that came from, or how that happened; it just hit us,” he laughs.

“Luckily we saw it and capitalised on it, but it’s gone! It was here and it is gone. As much as we tried to chase it, it’s gone.

“Colouring-in books – go figure. I wish it stayed. The trend just made us millions, but it was here and gone.”

New Idea colouring book cover

On a more serious note, Zavecz says: “Insights is what this business is all about. It may be data driven, if you can’t glean those insights, data is just analysis paralysis, you’ve got to be able to humanise what all that data means.

“That’s going to be the key and we’ve got some brilliant people in our insights area here that see these opportunities.”

Where to next? 

Zavecz expects more pain to come with consolidations to be expected amongst the magazine industry, not just within Pacific Magazines.

“There will be more consolidation, there has to be more consolidation, there’s just not the advertising money going around to sustain a lot of those magazines, particularly the tightly targeted or specialist magazines,” he says.

“Digital, social, video – it’s all extra opportunity to commercialise but it’s not the only thing.

“There’s different business models that will come out of the magazine business whether its e-commerce, adjacent verticals, business-to-business not just business-to-consumer, opportunities will abound and it will be up to the good operators to seize on them,” he says.

But on whether there is space for three mainstream consumer publishing companies – Bauer Media, Pacific Magazines and News Corp’s NewsLifeMedia, Zavecz was unusually tight-lipped.

“Market forces will tell us that, the market will dictate that,” was all he would say.

The PacMags future

“It’s the people and the brands that we have that will take this business to the next level, and that is reflected in Gereurd [Roberts]. Home-grown, he’s risen through the ranks of content and now commercial to lead the business, he’s insightful, he’s a leader and the people will rally behind him,” Zavecz says.

Gereurd Roberts

People will rally behind Gereurd Roberts, says Zavecz

Roberts began his career with Pacific Magazines in 2008 as editor-in-chief of Famous before being promoted to publisher of the title in July 2011.

He was then promoted to the role of commercial director in January 2014 and in May this year was promoted to the role of general manager of food, family and home before this week being named as Zavecz’ successor.

Zavecz says: “The company is pointed in the right direction, now is the opportunity for Gereurd to stamp his influence on that.

“There’s some great people, some brilliant brands and new businesses, he needs to consolidate all of that and really start to extract a greater return from that now.

“The investment over the past two to three years has been very costly. It’s now his opportunity to extract a better return from that investment. That’s what the shareholders would want us to do.

“All the radical stuff has been done, he’s got a few more little things he needs to do which he knows about, but it’s about finessing it now and stamping his authority and influence on it moving forward.

“He’s been part of this team, we’ve had a really close executive team. We all sat down a few years ago and set a three year strategy, that’s now finished and it’s up to him to take the company to the next level,” Zavecz says.

“We’re pointed in the right direction.”

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