More Trouble Ahead For 2004

More Trouble Ahead For 2004

THE INDUSTRY NEEDS TO GO ON A DIET

BY STEVE ASTER, executive VP, consumer marketing and general manager, Soap Opera Digest/Soap Opera Weekly

“To me the solution to single copy sales is like going on a diet. You know when you go on a diet it’s really painful. You look at the food and say, ‘Should I do it?’ but you know in the end you are going to look at yourself in the mirror and feel good about the way you look. This industry needs to go on a diet.

“Everyone keeps moaning about the problem but they keep pushing it out. I think we have to fix the newsstand system or the model and take a couple of steps back before we step forward. I think the fear of companies is, if I stop to fix these things, what’s going to be the short term impact?

“Frankly, in my opinion, this is one of the most short-sighted industries. The decisions we make are six months out or 12 months out, not three or four or five years out. And unless that culture changes, we’re going to say we’ll do what we can to get by. Let’s write a check to the wholesaler and we’re ok. So three months later, gasoline prices go up and you’re back where you started from. That’s not fixing a problem; it’s putting bandaids on the problem.”

SPEND A LOT OF MONEY IN BOOKSTORES

BY SUSAN ALLYN, consumer marketing director for EMAP-Metro’s FHM

“We spend a lot of money at the newsstands and at point of purchase. Small magazines say ‘I can’t afford that.’ Well that’s the wrong thing to say because as broken as the system is, you need to have your copies out front. You need to be spending in airports and transportation outlets; you need to be spending lots of money in bookstores.

“Think about the bookstore. It’s an automatic filter when you open that door. Who walks in that door? A reader. When people say I can’t afford to be in bookstores, I think that’s poppycock, because when you promote in a bookstore, you are promoting to someone who actually likes to read. You can’t say that of people walking into Safeway or Albertsons. That’s not the place to spend your money unless you are a checkout title.

“Circulators need to be spending their money where people are readers. It’s not costly when you get targeted readers and phenomenal sell-throughs.”

CUT THE DEAD BRANCHES OFF THE TREE

BY CHIP BLOCK, vice chairman of USAPubs

“Having been around the industry for over 30 years now, it’s always been remarkable to me that publishers, who consider themselves business people, are so reluctant to kill a magazine – when they clearly have a loser with shortfalls year after year. Mavbe the turnaround plan is “We’ll sell 100 more ad pages next year.

“That flies in the face of reality if that magazine hasn’t seen that kind of page level since 1965. Especially in the case of the big publishing companies that have lots of magazines and tend to hang on to these magazines that should be put out of their misery in a dignified kind of way. But they are still around to take up market share and lose money.

“It’s hard to kill a magazine. Nobody loves it. But when a magazine hasn’t made money for a long time, you’re not serving any real constituency other than the employees of the company by continuing to publish that magazine.”

SCARCE RESOURCES REQUIRE ADJUSTMENTS

BY JERRY OKABE, VP audience marketing, Primedia Business Magazines & Media

“I would divide the challenges we face into two groups: those that are a result of our current environment, such as economic and legislative, and those that are more on-going and ever present.”

“In the first group, the sluggish economy and lack of spending affecting almost all publishing companies certainly touches all of our lives. Reduced spending on advertising and fewer subscriptions and newsstand sales lowers publication revenues, resulting in reductions in staffs and less investment in the product, or elimination of the product altogether.”

“There has been significant downsizing of staffs, putting more pressure on remaining human resources. Everyone is faced with ‘doing more with less.’ I have observed cases where these conditions can inspire new ideas and better, more efficient ways of doing business, and that seems to be the challenge today more than ever before.

“I think for many publications, standards and expectations have had to be adjusted because the resources are just not there. Not knowing when or how quickly the economic environment will improve requires that we be very focused on making the most of what resources we have, be creative and look for different/better ways of doing things.”

A ‘GOT MILK’ CAMPAIGN FOR MAGAZINES!

BY BRIAN WOLFE, president, Time Consumer Marketing Inc.

“The biggest challenges ahead are:

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The more active regulatory environment is more challenging, for example the Do Not Call, Do Not Spam, and Do Not Mail. Could this lead to problems for publishers on continuous service? It’s a continuous challenge!

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The marketplace is more global; we’re continually fighting for leisure timeshare from the consumer and going forward there will be even less time – more online, more tv popularity, and we’ll continue to have to fight for our share.

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There’s the continuous erosion of the price/value perception of magazines – more free issue offers, getting magazines cheaply online, half-a-year free offers. It’s caused by rate bases that are higher than they should be. We’re [supposed to be] trying to make money out of circulation, as unstable and insolvent as the newsstand channel continues to be.”

“On the positive side, partnerships can be successful; they’re growing and we’re still hopeful. And hopefully the online volume will continue to grow. At this point, I would say that magazines are in desperate need of a ‘Got Milk?’ campaign. But we can’t spend that kind of money at Time, Inc.!”

LEAVE NO SOURCE UNTRIED

BY LIBERTA ABBANDONTE, VP-circulation, Forbes

“We haven’t been able to get any partnership marketing opportunities to work and we’ve tried pretty hard. We’ve tried with Sprint: that produced a thick contract and 125 subs. We had a pretty big presence on the Web site of American Airlines. That produced eight subs and a contract that was even bigger.

“We have been pretty successful on the Internet, however, because Forbes has a very robust, well-visited Web site. It’s become a very important source of subscriptions for the magazine as well as the newsletters. We’re also active in third-party Internet. We do a lot of co-reg.

“What’s really worked for us, however, is pushing content out and having links back to order pages on editorial content.

“As far as outside email, we haven’t been able to get that to work, and believe me, we’ve tried. But we’ve been very successful cross-marketing our own internal email lists.

“You always have to explore new channels. There’s a lot of trial and error involved with new sources.”

DIRECT MAIL IS STILL THE LIFE BLOOD OF CIRCULATION

BY BRUCE SHRIVER, JR., circulation director, Lebhar-Friedman, Inc.

“Publishers continue to demand more blood – more contribution from circulation. Ad spending is down even more, so circulation has to provide more to the bottom line. But publishers are less willing to invest in building circulation. If circulation is down, and it was contributing say 28% of the profits, then they can’t demand a higher contribution and cut spending.

“Word has it that ad pages are up in general, but not in the food service industry. People have to eat, so we’re in a somewhat protected market. And we’ve improved our market share, but ad pages are down.

“So again, we’re reducing expenses. But if you reduce spending in direct mail, you feel it eventually – you don’t have the expire liability of those additional names now. You eliminate staff positions, which makes it tough enough. But you can’t reduce direct mail spending: that’s still the life blood of circulation.

“New sub acquisition each year by direct mail is a huge portion of the budget. The Internet is becoming more important now as the cost per order there is relatively low. We want to do more in this area, but nobody’s willing to do partnerships – it’s very hard.

“One of our best techniques is non-deductible trade show copies. When people pay to come to our shows, there’s a charge for the show on the registration form; and a portion of that registration fee is for National Restaurant News. We automatically get the subscription. If the person is already a subscriber, their subscription is renewed.”

MANAGE THE CUSTOMER EXPERIENCE

BY SIMON ARONIN, circulation director, Consumer Reports

“The challenge to manage the customer experience is multi-faceted (and goes beyond marketing databases and CRM). On one hand, it is a multi-channel marketing relationship, especially following the original order, with billing, renewal, and gift contacts being a mix of postal-mail, e-mail, attached mail, and telephone.

“Through testing, we can find the optimal mix of publisher-initiated contacts and media to improve pay-up, raise renewal rates, and increase the number of gift subs.

“Secondly, customer-initiated contacts, i.e., for customer service and for web transactions, are key events in our relationship with a customer. Each telephone call and Web site visit from a customer is an opportunity to satisfy the customer and to extend the relationship by upselling or cross-selling.

“Thirdly, we must manage all multi-channel contacts across multiple products. The key is to understand what the customer perceives (e.g., in terms of frequency of contact, consistency, messaging, and branding).

“Fourthly, circulators can lead the way to developing new products by understanding the customer base (in terms of media behavior, demographics, buying behavior, life-cycle events, etc.).

“Overall, as it is becomes more difficult to acquire new customers, we must get better at increasing the value of existing customers in a multi-product environment.”

NEED TO VOICE OUR OPINIONS ON LEGISLATION

BY MAXINE MINAR, COO, Post Newsweek Tech

“I continue to believe that all of the legislation is starting to affect us – email legislation, the FCC ruling on the Do Not Call list, possible legislation on faxes. It could have a dramatic effect on all of us, just in how we reach people. It’s really difficult for us to get information to people. It might become so expensive we can’t afford to do it anymore.

“If you’re trying to get mail into a Federal facility these days – magazines are ok, but mail? We sent out an invitation for a conference to a long time reader who knew us and called to tell us what happened. His mail looked like it had been put through a fire. Lucky enough he was able to read the logo!

“Organizations like the ABM [American Business Media] and MPA [Magazine Publishers of America] become really important for us. We need to let Congress and the regulators know how these things are going to affect our business. Someone may be thinking about [the little] guy, but it’s affecting an entire industry. And it’s not just us, it’s the whole marketing industry.

“They’re going to drive us back to [direct] mail again. Try to push back on these things.

“On the up side, this is a great way for all publishers – B-to-B and consumer – to voice their opinions and make it all work so it doesn’t increase the cost and eat up the profits.”

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