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Condé Nast is forecasting roughly $130 million in U.S. advertising bookings for the fourth quarter, more than $35 million below its internal goal, according to internal figures viewed by ADWEEK and a person familiar with its finances.
The shortfall follows a third quarter in which the publisher behind Vogue, GQ, and The New Yorker booked nearly $110 million in U.S. advertising revenue, about $6 million below its internal Q3 goal, according to the figures, but up about 5% year-over-year.
Together, the two quarters leave the company more than $40 million behind its advertising targets for the second half of the year.
A spokesperson for Condé Nast disputed these figures.
“While we do not disclose detailed financial information as a privately held company, the figures cited and the resulting percentage variance are materially inaccurate,” said Condé Nast chief corporate affairs and communications officer Danielle Carrig. “U.S. advertising revenue surpassed our targets in the first half. We are projecting U.S. advertising revenue to be very close to target for the full year.”
The second-half shortfalls do not necessarily mean that the company generated less revenue than it has in years past. However, the miss is particularly painful given that the fourth quarter is the most critical period for media companies, as advertisers typically allocate a high portion of their annual ad spend to the fourth quarter to capture holiday shopping.
The deficit arrives at a delicate moment for the publisher. In September, chief executive Roger Lynch announced he was leaving after seven-and-a-half years to become CEO of Mattel. Board member Mike Perlis is serving as interim chief executive while the company searches for a permanent replacement.
It also follows a year of high-profile departures from the revenue organization, many of them executives who reported to chief revenue officer Elizabeth Herbst-Brady.
To report this story, ADWEEK reviewed a number of internal documents, as well as spoke with four people familiar with the Condé Nast business, all of whom requested anonymity to discuss sensitive matters.
Their accounts describe a company facing the same declines in search traffic battering every publisher with a web presence, but one whose revenue strategy, they said, has been waylaid by a swath of executive departures and unrealistic expectations.
A $35 million hole
At Condé Nast, a budgeting shortfall of that size is unusual by historical standards, according to a person familiar with the business, particularly since the fourth-quarter budget was built largely off the prior year’s results.
