I'm a bit shocked that Conde Nast never bothered to work out a digital advertising strategy that worked. In the magazine business they can sell off their pages easily because they are essentially part of the content and their content is influential. They control the client pool and match advertisers with the brand of content, a reader of Vogue would spend as much time studying the content of some advertisers because it covered their interests in an interesting way.
A good friend is a fashion designer and she collects oodles of high end magazines, they have a heavy cover price and advertising makes up a large proportion of the pages, but it doesn't matter because the content and advertising coalesce. The advertising editor is still an important part of the business and they make certain that their work both reinforces the business and doesn't tarnish the content. It's a slick alignment.
Something became unstuck with publishing on the web very early, and for whatever the reason, magazines and periodicals typically gave up exclusively collating and editing their own advertising material. An industry of third party providers took that job, providing the initial promise of instant revenue and later the promise that adverts could be tailored to the eyeballs of the viewer. But the third parties never came up with a way to nicely separate their ads from the content that people were attracted to, to give it the necessary space that makes reading a magazine somehow less bombarding. They adopted the messy format of banners and placement ads, which wasn't far away from the newspaper grid. But newspapers were always a different beast with less refinement, the daily coverage was enough of a compulsion to readers that it covered the incongruous layout (and the trend for a very long time was not to pollute the front page with advertising as this would cheapen the status of important stories and editorials - this came much later). Every ad technology that they have come up with only aides in their own destruction - popups, overlays, flash and animated gifs only serve in distracting the audience enough to irritate.
It's probably too late to reform the industry to make advertising consistent, relevant and non distracting. The content has already suffered, reputations are diminished and reputable journalists are becoming far more autonomous in their output. There was a renewed interest in digital magazine publishing when the ipad came out, it allowed for more traditional interaction, layout and perusal, but releasing an app based publication is more involved than publishing to the web once and there's more mind share in the latter.
It's going to be interesting to watch how the web trends for commercial media. But at the same time I doubt my fashion friend is about to stop buying magazines and judging by the content they are becoming more beautiful and textural with every new publication. Still a viable niche alternative to screen burn, the adverts look fantastic, and there's zero chance of accidental malware. No salvation for a suffering industry, but they've been embedded in the web a very long time and failed pretty badly.