Audience Development

Big Pubs Looking for Strength in Numbers

Where smaller publishers—from b-to-b to consumer enthusiast—form consortiums to attain economies of scale for materials and production services like printing, paper buying and distribution, the mass consumer publishers are setting aside their historically fierce competitiveness to tackle mass problems.  

Across-the-board ad page and revenue drops, online-sourced subscriptions, pay wall models, and digital content formats and distribution are some of the latest battles that big consumer publishers think can be won through solidarity.

It's an interesting concept that can be traced back to then Hachette CEO Jack Kliger's outspoken calls for pre-recession unity to revolutionize rate base—magazines needed to stop competing with each other, come together as a platform and compete with TV, the Internet and radio. "Circulation-based metrics are irrelevant to proving advertising effectiveness," he told an AMC audience in 2005.

Now, sick of feeling the sting from getting spanked by "aggregators," "plagiarists," and "content kleptomaniacs," as Ruport Murdoch put it at a recent event in Beijing where he and the AP's CEO Tom Curley continued their rant against Google et al, big publishers are joining together to ostensibly regain—or actually gain—control of how their content and advertising models are consumed.

How crazy would it have sounded if, before the recession hit, Time Inc., Conde Nast, Hearst and Meredith all joined together to create a digital distribution platform to develop a proprietary content format and service eReaders?

How about creating an ad network? Up to now, publishers were leveraging and/or creating their own vertical networks. Martha Stewart Living, Meredith and Forbes were all creating them. Now, there's some background chatter about the formation of a multi-publisher ad network. AdAge reported on it, and PaidContent threw a wet blanket on the concept.

And then there's Time Inc.'s year-old Maghound, which offers custom subscription packages to a variety of publications from different publishers. 413,000 issues have been shipped so far, and Maghound's president Dave Ventresca told attendees at MPA's Innovation Summit this month that as the service moves out of its proof of concept stage, it will begin a more robust marketing campaign for all participating publisher titles, not just the Time Inc. ones.

Most recently, 15 British publishers formed a venture to promote their thinking person's magazines that apparently get lost in the crush of titles dealing with less weighty topics.

On a smaller publisher scale, but by no means tiny, Mother Jones is leading the formation of a journalistic co-op to tackle, in an investigative format, climate change—several magazines are sharing reporting resources. AdAge's Simon Dumenco spoke with MoJo co-editor Clara Jeffery about the project and her comments about the partnership can be applied to any area of the publishing business.

"We have complementary audiences, but even the biggest players seem to think they can benefit from having their work introduced to the core audiences of the other partners," she told Dumenco.

And, above all, it's the quickly-changing media world that's driving publishers to seek out ideas and and potential partners:  "Secondly, everybody is really eager to use this as a way to test-drive collaborations, which everybody sees as a vital part of the emerging media landscape. On that front, we'll likely learn as much from what doesn't work as what does."

Does Anyone Play Newsstand Shuffle Anymore?

The games we play change over time. I wonder if my favorite magazine game has gone the way of stickball and “kick the can.”

When I worked at Ziff-Davis in the 1980’s I was fortunate enough to be placed in a “loop course” type of specialized circulation class taught by the VP of Circulation and one of the industry’s most outrageous old school characters, Larry Sporn. Larry taught us a simple little game called “newsstand shuffle.” Basically, all you had to do was go to a newsstand, browse the magazines, and accidentally place your companies’ titles on top of your competitors’ magazines. The trick was to make sure you didn’t get caught by the newsstand manager but this wasn’t very difficult. It was a cheap thrill.

Where the game really got going, though, was the classic Mother of All Newsstands, that being the one at the edge of Grand Central Station, in the PanAm building (now MetLife). Here was a newsstand in the hub of The Great Commute—108,000 people were estimated to be streaming through the building each day, according to an article in the NY Times on June 18, 1984. At that point in time, the newsstand stocked more than 2,000 titles and sold 10,000 copies of magazines per week.

But volume was just half the story. This newsstand was smack in the middle of the magazine publishing AND ad agency capital of the world. Beyond just selling copies, it was critical that the hundreds of media buyers streaming by each day saw your title prominently displayed.

Since so many magazine professionals walked through the station daily, Newsstand Shuffle became a very lively game. If you stood and watched closely you could see people picking up an issue (or four), casually glance over their shoulder at the counter and then quickly shuffle the magazines to their favor. Sometimes competitors would be in the PanAm at the same time seeing who was willing to take a later train and get the last laugh.

Of course the next day, someone else had either fixed the stack or buried your magazine under Civil War News or something. So to win we had to compete almost every day.

Is anyone still playing?


Photo credit: Martin Green

Believe It or Not, Fewer Magazines Folding in 2009

Once again, the number of magazine closings has outpaced the number of titles being launched, according to the latest report from U.S. and Canadian online magazine database MediaFinder.com. But when comparing the number of titles (383) folded through the third quarter of 2009 to the same time period in 2008 and 2007, the pace is significantly less.

According to MediaFinder's most up-to-date numbers, 643 magazines ceased publication in 2007, and a total of 613 magazines closed in 2008. Right now, that means we’re 230 titles off from last year’s total. So unless there’s a dramatic push in closings through the fourth quarter, it looks like the industry may be looking at fewer magazine closings from the past two years (we can only hope!). 

Of the 259 titles to launch so far in 2009, the report showed that publishers have pulled the plug on 104 more magazines since the first half this year, when 279 folded publications were counted. During the third quarter, 72 titles launched while 104 magazines closed, including the high-profile closings of publishing giant Condé Nast's four titles—Gourmet, Cookie, Modern Bride and Elegant Bride. Other titles to vanish in ’09 included Meredith’s Country Home, Hallmark, American Express Publishing’s Travel & Leisure Golf, Time Inc.’s Southern Accents and Rodale’s Best Life.



Of the launches in 2009, the regional category topped the list with 15, but also experienced the most folded titles (31), including Tampa Bay Living. Both business and lifestyle categories also declined, folding 14 and 13 titles each, respectively.

The food (14), health & fitness (13), and home (13) categories proved to be popular for launches this year.

B-to-b publications accounted for 75 of the new title launches, 130 of the shuttered magazines, and 24 of the magazines that ceased print editions over the past nine months, the report said.

Does The Economist's Cell Phone Newsstand Model Make Sense?

The Economist recently announced an innovative newsstand model that provides consumers with the ability to order overnight home delivery of its current edition via alerts to their mobile devices. The trial program sends text messages to its registered users highlighting topics from the current issue and provides a URL for easy ordering. This simple convenience costs $6.99 per issue—the same as the regular newsstand price.

Can this model really achieve profitability? Paul Rossi, The Economist’s North America Publisher, says yes. Rossi claims its publication generates profits similar to its regular newsstand sales due to eliminating wholesaler and retailer payments.

In theory, higher delivery costs would eat into savings. Between the closest delivery zones, FedEx, UPS, and USPS all charge at least $13 for standard overnight delivery of letter-sized envelopes. Presumably, The Economist negotiated reduced shipping rates. Nevertheless, even at a 75% discount, this equates to $3.25 or almost half the issue’s newsstand price. Throw in print, paper, binding, fulfillment, promotion, and so on, and generating significant profits in a fully loaded P&L would prove challenging

Profitability aside, a successful model must be sustainable and provide large-scale potential. As noted in AdAge:

[…] The circulation generated through the cell phone program is likely to remain very small as a proportion of the whole. In England, the number of buyers via text has numbered "hundreds not thousands a week," [Rossi] said. "As a percentage, that’s not very much."

One questions if it would fit better with a monthly publication where waiting only a day versus a few weeks for a magazine is a considerable difference. Perhaps it would make more sense for celebrity titles where gossip and scandals provide a plethora of gotta-have-it-now news.

With free online breaking news available through laptops, iPods, and mobile phones, the three-step process of using a cell phone, going online, then ordering a hard copy just to receive it the next day seems cumbersome.

This is the crux of the issue. The Economist delivers an old medium through a new process. However, with the country battling a recession and consumers’ access to 24/7 free content, the industry still must address the declining demand for magazines.

The model must overcome many issues to achieve financial success of any significance. Nonetheless, investing into a new channel offers valuable returns. The Economist created a new platform to communicate with its readers. The publication will gain key insights into mobile phone marketing. It will also build stronger relationships with its customers. The resulting loyalty can create a foundation the title can cultivate to convert customers to subscribers and to promote other content and services. On the edit side, the magazine will learn what topics appeal to its readers.

In the spirit of innovation, companies often must take risks to reap the rewards, even if those benefits do not arrive in the short term.

What Outsourcing Circulation Really Means

News that management consultants were descending upon Condé Nast’s offices kicked up an entertaining mix of blog and comment paranoia and schadenfreude, mostly having to do with perks—perceived or actual—and with headcounts.

Of course, circulators jumped on the opportunity to rekindle with one of their favorite bogeymen: The specter of outsourcing.

Between audience development colleagues, debates on the topic typically revolve around whether it is wise for a publishing company to pursue that route. I don’t have a particularly strong opinion on the question—mostly because I think the best answer is a great cop-out: It depends.

What ought to be of greater interest, however, is getting ahead of how things might evolve if audience development departments were to follow the same path as those of functions that were once integral parts of publishing outfits, such as actual printing, fulfillment, customer service and, increasingly, marketing copywriting and design.

The first few, because of their reliance on expensive and ever-evolving equipment, have come to be dominated by a handful of large, ultra-competitive, and seemingly low-margin providers. Copywriters and designers, on the other hand, fall squarely in the realm of knowledge workers, the creative class. They are mostly made up of small, highly-specialized firms with business models focused on task-specific engagements.

These types of workers are exactly what Fast Company famously heralded in the late nineties: Citizens of Free Agent Nation. They are creative or knowledge workers who often operate from home, always leverage communication technology, spread risk by taking on various clients, accept full responsibility for their output and livelihood and, at least for the successful ones, wouldn’t change their situation for any (fast-disappearing) matching 401K in the world—though one imagines health-insurance envy sometimes kicks in.

Outsourcing Doesn't End There

For audience development professionals, this type of arrangement is easy to envision, particularly if we consider how technology and training have changed in the past few years. Setting training aside for now, let us consider technology. It is now child’s play to set up powerful, secure and affordable connections that enable one to be in touch with both critical data and key stakeholders. And people are getting increasingly adept at working with remote, temporary teams.

At Mansueto Ventures, for instance, we have a key marketing manager operating from Madrid, a team of consultants helping with newsstand out of New Jersey, and an on-call online project manager with whom I speak several times a week, but have only met two or three times in person.

And the “outsourcing” doesn’t end there. We must also add the team handling increasingly involved fulfillment and operations projects out of Iowa (led by someone based out of North Carolina); the production consultants who bid out and see through our printed marketing materials; the other North Carolina woman whom I have never met, and who looks after the finer points of our subscription model; the myriad agents who would like nothing more than to be partners rather than vendors; and the bullpen of designers and copywriters on whom we count to keep breathing new energy into our marketing efforts.

What Does Outsourcing Circ Mean?

From this standpoint, what does the concept of “outsourcing circulation” actually mean? Most tasks have already been entrusted into the hands of folks who are probably better at them than we can ever dream to be. What’s left is a mixture of high-level strategy and mundane but essential coordination tasks, with the latter, again, increasingly facilitated by communication technologies.

So while, in any industry, technology creates a fertile environment for outsourcing discrete tasks, magazine publishers’ shrinking ability to hire and train new talent creates a different dynamic. To be sure, in the past several years, more consumer marketing jobs have been shed than created. On top of that, there are fewer and fewer companies willing to spring for interns or to create structures that count on bringing in untrained talent and slowly, methodically foster their development—and contribution.

This means that, over time, there will be fewer and fewer multi-taskers able to speak fulfillment, navigate ABC arcana, understand what makes publishers happy, grasp the implications of lifetime value and live by the mantra of “test, test, test.”

In fact, there will likely be far fewer such specimen available for hire than there will be management consultants. Not to get too ahead of ourselves but, right now, I’m sure there’s a few far-sighted go-getters who are very interested in learning how McKinsey goes about setting its rates.