Marketing

Spyglass Intelligence LLC has published A Competitive Assessment of the Top 12 Largest US Consumer Magazine Publishers, which you can purchase on Amazon.com.

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Michael Porter’s Five Forces is a framework for analyzing the potential profitability of an industry. Over the last ten years, the magazine publishing business has ridden a roller coaster of profits and losses due to the push of information online, financial calamity and the advent of the iPad. But overall, will profits eventually be squeezed by better technology, intense competition or new entrants?

The threat of the entry of new competitors
How hard is it to set up a new magazine? In a great article about magazine startup tactics, Dan Wiesner talks about what he does to launch a new magazine. With an eight-month budget of $20,000, a subsequent 5-6 month budget of $60,000 and a final 24-36 months at $40,000, Wiesner aggregated a list of 50,000 names and ended with a circulation of 40,000. So in three years and a relatively small amount of money, a competitor can be up, running and profitable.

This means that, for smaller magazine publishers, the threat of entry is huge. But larger publishers with circulations in the millions will have less to worry about from a new entrant. Their worries lie more with existing competitors who want to move into their space.

The threat of substitute products or services
This big threat has materialized over the last 10 years. The internet has eroded subscriber loyalty and offers advertisers a cheap, trackable marketing channel. With the iPad, magazine publishers are able to offer better services to advertisers, but the pressure for results-based marketing will be huge, especially in the age of Google.

Magazine publishers will need to find ways to mitigate this threat and prove the effectiveness of print marketing. More interactive advertising on tablets will help, as will subscriber surveys focused on the effectiveness of print ads within a certain, branded context. Without good differentiation, ad dollars will continue to leak into the search-engine-marketing world and away from magazine publishers.

The mass-market reach of consumer magazines also helps to differentiate advertising. Online advertising can reach various micro-audiences with different keywords, but creating a mass consumer psychology around certain products requires something more. The number of competitors in the magazine space dampens this advantage, so it is imperative that publishers work hard to delineate their focus on content, context and audience.

The bargaining power of customers (buyers)
Subscribers have some bargaining power vis-à-vis magazine publishers as great deal of content is now located online for free. Because prices are low, and consumers still crave a total, branded experience from certain magazines, it will be more important for magazines to keep their core focus rather than becoming generalist providers of content.

Advertisers have more bargaining power, especially with the substitute of cheap, trackable online marketing. Again, the challenge is to convince advertisers that a fully-branded, contextual, mass-market experience for their prospects is a necessity as well. Any qualitative or quantitative research to back up these attributes will be invaluable.

The bargaining power of suppliers
Suppliers to the magazine publishing business have very little power. Printers and journalists all compete for the same business. However, some personalities can exert a greater influence over content, like Oprah Winfrey or Rachael Ray. Celebrity-focused publications will lack some of this advantage.

The intensity of competitive rivalry
Competition in the industry can be fierce, especially within growing segments like food and health. But any competition will differ among brand-positioning models. For example, a niche publisher with a strong core focus will face less intense competition than a broad consumer magazine without such focus.

Overall assessment
The magazine publishing business certainly faces some strong challenges in terms of substitution and competitive rivalry. But with a strategy focused on leveraging core strengths can help to mitigate weakness on both these fronts. Some large, multi-brand publishers will do this well, organizing their magazines around core messages and audiences. Some will do it poorly and less profitably.

When management talks about strategy, they usually mean tactics or goals. If your strategy is to grow circulation year-over-year by 10%, or to spend more on pay-per-click campaigns, then you’re not really talking about strategy. Growing circulation is great, but just stating that you want to grow it is a goal, not a strategy. Along that vein, investing more in search-engine marketing or direct mail could be part of a broader strategy, but by themselves they are just tactics.

So what is a strategy? Putting it simply, it is using a point (or points) of leverage to your advantage over your competitors. A circulation strategy is therefore focusing on a core concept where you have a competitive advantage to grow your list of subscribers or attract advertisers. That core concept could involve your brand, various pieces of content, price, market reach or some other area where you possess a key competitive advantage.

For publishers who rely on paid circulation, this will be a one-step process of targeting a certain profile, providing content that satisfies some real or perceived need, and positioning your publication vs. competitors so that it occupies some unassailable niche. For publishers who rely on advertising, a strategy can become more muddled because revenue comes from selling access to the community you build. Your content needs to be focused to build your community, but you’re targeting a certain profile so you can sell them to advertisers, not necessarily so you can make money directly from circulation sales.

Let’s take The Economist and Business Week as two examples. The Economist charges about $110 per year for a subscription while Business Week only charges $40 per year. With almost 1.5 million subscribers, The Economist could take home more than $150 million in circulation revenue whereas Business Week would only take home around $37 million with its 923,000 subscribers.

What point of leverage could The Economist use against Business Week? The Economist is an international magazine with in-depth political, economics, business and financial coverage from a global perspective. While a CEO of a local, Midwest retailer may not read The Economist, a globe-trotting marketing manager at a specialty publishing company may. The opposite holds true for Business Week. Therefore, the leverage point for The Economist might be the internationality of its coverage, how it provides in-depth reporting and analysis on politics, business and economics in various parts of the globe. Business Week, on the other hand, could focus its message on being the everything-about-business publication, leveraging that message in a mainly American market.

For both these examples, content becomes the key to differentiating the publication. But in multi-brand publishing companies, this kind of focus does not always remain clear. In fact, a fundamental law of physics applies to the business world: corporate entropy. Over time, powerful editors or publishers may erode an initial positioning strategy by bringing more features into their own, favored publications. This cannibalizes other brands within the same company. Without an overarching positioning strategy with strong guidelines as to what constitutes focus, brands become muddled, and will not drive the circulation or advertising margins needed to survive.

What sort of circulation strategy will you pursue? What points of leverage exist that you can take advantage of? Here’s where effective market research can help you. Most of your subscribers are aware that other brands compete with yours in terms of content, attitude, coverage and format. In fact, many will have considered, or even subscribed to, those other brands while choosing your publication. Therefore, asking your own subscribers and prospects to rate your publication on various features separately, and in conjunction with their thinking on other publications, can help you determine whether the marketplace has already chosen your core focus.

A subscriber survey will help you see the competitive landscape for what it is, evaluating the positioning of your own publications vs. the array of competition they face. You will spot whether your publications even have a core content focus, or if the initial positioning strategy has eroded in the face of powerful corporate interests who want to promote their own content at the expense of the business as a whole.

Not only will focused content on a niche audience provide an effective strategy to grow your circulation, but it will also help advertisers judge the context in which they will promote their message. For example, if you want to sell a US-focused investment product to prospects within the United States, Business Week may be your best bet. But if you want to infuse the prestige of your luxury brand into an international audience of CEOs, you may choose The Economist. These are, of course, simple hypotheses based on a cursory look at each publication’s marketing messages. But testing similar hypotheses among many content features, across brands and with different audience segments will give you the quantitative validation you need to test your initial strategic hypothesis.

We all love to talk about closed-loop reporting, tracking our leads from the time they visit our website to when they sign on the line that is dotted (thank you Alec Baldwin). But open up your marketing automation reporting suite or web analytics platform, and chances are you’ll be lost in the hundreds of reports they show you. And you’re not even finished yet, because you still need to connect the dots to your CRM and see which opportunities have closed.

How do you look at all of this intelligently? Before you dive deep into your reports, you need to know what you want. Below is an outline of what you should look at to measure the success of your demand generation campaigns. This is not a complete list by a long shot, but hopefully it will help you put some framework around your metrics.

Metrics to consider	How does this help
Cost	How much does an effort or asset cost in money, time, or opportunity?
Engagement/interest	Are your prospects interested in your content? Do your various assets draw people to you? Do the emails you send specifically or the nurture tracks as a whole bring people to the content you want to showcase?
Conversion to MQL	Do your prospects convert to leads? At what percentage over time? Are you qualifying so many leads so that your sales team gets bogged down?
Conversion to SQL/SAL	Did sales qualify and accept the leads you sent them? If not, this metric can pinpoint any problems you have in your lead scoring programs.
Conversion to Opportunity	Are the leads sales qualified converting to opportunities? Do any specific content views or event attendance lift this metric?
Closed won vs. closed lost	Of those opportunities, which did your sales team close and which did they lose. Again, are there any correlations between this and what your prospects looked at or how you nurtured them?
Profit per closed opportunity	Use this to determine your acceptable cost per lead. How much effort will you put into acquiring a lead? How much would you invest in nurturing that same lead?

The metrics above should be measured over time to gauge the effectiveness of your funnel. But you should also measure the above by the other factors below.

Factors	Use the above metrics, but segment by the below factor
Initial source	Which sources (ie. SEM, tradeshows, advertising, etc.) bring you the best leads? Which ones cost more or less per lead?
Email	Which emails work and which don’t? Do some correlate to higher levels of engagement or higher numbers of closed opportunities?
Nurture track	As a whole, do some nurture tracks work well while others don’t? What kind of variables could you use to test different nurture tracks against each other?
Form	If you use different forms, does the number of questions you ask hurt engagement? Does it help somewhere down the line to improve sales?
Asset	Which assets (whitepapers, videos, webinars, etc.) correlate to higher sales? Which ones get the most engagement?
Content area	Do certain areas of content correlate to better or worse leads? Do some generate a lot of engagement by their place in the buying cycle?
Industry sector	Which industry sectors like which types of content? Which make the best, most profitable leads?
Job title	Maybe someone’s function makes them a decision maker and correlates to higher conversion rates. If yes, know this so you can nurture them more effectively.
Company budget	Do companies with higher budgets for your particular offering convert better or engage with different content?
Company revenue	Do larger companies equal better prospects? Do smaller companies find different areas more interesting?
Point in buying cycle	Do different efforts work depending on a point in the lead’s buying cycle? Is there a way to judge when a particular lead should go to sales?
Lead score	Is your lead scoring program configured to bring sales the optimal leads? If lower scores have higher conversion rate to sales accepted leads, then what could you change to bring sales better leads to begin with.

Narrowing this down some involves outlining your strategy. If you want more sales, imagine how you’ll get there and what you need to know for testing. And, of course, always test, every step of the way. A different email within a nurturing campaign that points to a new asset can ripple through your entire buying cycle. Tracking all the right numbers to begin with will help you see those effects so you can experiment over time and know what works, and what doesn’t.

B2B publishers can be slow adopters of new technology, bringing a healthy skepticism to the next big thing. Many times it is because they can solve the same problem for less money. Instead of adopting marketing automation, for example, a lot of publishers have developed their own database marketing systems to solve problems like driving activity-based campaigns.

But one area where marketing automation could be invaluable is turning individual subscriptions into large sales. In corporate sales, as with any marketing, content is king (and publishers are kings of content). But where they lack expertise is creating “meta-content”; that is, content about how their information helps companies on a large scale.

For individual subscribers, the solution is simple: offer a free trial and upsell based on their interaction with your publications. But when you want to move to bigger deals, some problems arise:

• Too many leads: You have thousands of subscribers, and all of them could be interested in a company-wide plan. How do you tell who is and who is not?
• No system to upsell further: A subscriber who is happy with her content won’t necessarily look at other purchases with you, or think much about how the content she reads is valued outside her immediate circle. You may send cross-sell efforts to her, but do you have a system to evaluate and market corporate-level subscriptions?
• No content to upsell further: You may be a king of the content you publish, but do you have content relevant to group subscription sales? For example, if you sell access to a database of financial results, you may have some copy on how that would help an individual. But do you have whitepapers, videos or case studies on how your information could fit into your clients’ businesses as a whole?

Marketing automation was developed for B2B marketers to work out these exact issues. As publishers, you may think that having lots of content and lots of leads solves the above problems for you. It doesn’t. But with a proper marketing automation platform integrated to a CRM system, you can start to…

1) Create and tag content: Here I’m talking about the specific information you publish PLUS the content about your content (meta-content). For example, how does your publication or database integrate with your customers’ needs? Where could they use your data in their business processes? How could a group subscription help different areas of your subscribers’ businesses? What other content do you have on offer that might be of help? Create a series of whitepapers, webcasts, videos, surveys and case studies. Segment them by:

1. Type of content – is the content news, data, a database, etc?
2. Buying cycle – would someone downloading the content do so out of curiosity or because they are ready to buy?
3. Demographic – is the content focused on a particular vertical industry, geographic location or job title?

2) Gate content and slowly build an intelligent lead profile: Make sure to gate your content. But use cookies to identify repeat visitors so you don’t have to always ask the same questions. When a lead looks at a white paper, ask for their name, company and email. Once they watch a demo video on how their product works, ask for different information like budget or a timeline to buy.

3) Send automatic campaigns to leads to showcase your “corporate” content: When someone subscribes to your product, send them a periodic email to judge interest in a corporate subscription. If they respond, you know there may be more interest.

4) Systematically follow up on any interest: Based on your tagging or information collected in progressive profiling, send automation campaigns to follow up with your leads with more content that might interest them, or with calls to action that will lead them to a next step.

5) Score leads and send them to sales based on real intent to buy: While nurturing leads automatically, you’ll be building a profile based on activity and fields. Before sending leads to a high-paid sales team, figure out how interested they are and whether they fit your buyer’s profile. You may want to send them to a telephone qualification team first. But make sure your lead scoring filters out any leads with only peripheral interest so that your most expensive sales resources aren’t busy chasing rainbows. You want sales to be excited about every lead you send them, and scoring will make that happen.

Each and every one of your subscribers had a particular business need that made them buy your publication. But looking at which subscribers are leads for a larger offering could mean the difference between an $800/year individual subscription and a $200,000 corporate license. In the latter, clients will integrate your information into various areas of their business, treating you more like a partner than a publisher.

A marketing automation program may seem superfluous and expensive, and $30,000+ a year can seem like an expensive way to email customers. But marketing automation is much more than sending email. Platforms like Marketo and Eloqua offer a way to conduct digital, one-on-one conversations with your subscribers and upsell them en masse. So consider how many new subscribers you’re missing, or how many possible corporate deals are ignored because you don’t have a systematic, intelligent way to evaluate your leads.

Is your circulation flat? Are you having trouble attracting new subscribers? Do you want to expand your offerings to new markets? If yes, then consider launching a new paid subscription product. However, success in your vertical doesn’t always equal an easy launch, even with your existing customers. But you can thrive with a concrete action plan that depends on quality market research. Below is an 8-step guide to launching a new publication that includes the circulation-marketing areas you need to consider.

Step 1) Strategy – define your targets and their needs

Many B2B publishers focus on a certain type of content for a specific sort of customer. This can prove quite lucrative within a defined market, but can be frustrating if you want to move into other niches. You’re effectively trapped in your silo. To figure out a strategy for generating more revenue, you have to choose between:

A)     Focusing on the niche you already service, but with additional products

B)      Breaking out of your vertical and selling a version of your content to a different industry

With A) you know your customers, or can get to know them. You have an inkling of the content they may want to buy in the future. And you have a ready list of industry professionals who already trust you enough to purchase from you.

For breaking into a new vertical (B), consider hiring a “connector”, someone who knows the ins and outs of customers in the industry that you want to target. This person will know who to call to gather information for your product launch.

Selling new content to existing customers will be easier but, in either scenario, you must identify an emotional need for your prospects and define how your new product satisfies that need. Call it a hypothesis for now and, in step 2), you’ll start testing that hypothesis.

Step 2) Market Research

Before you launch a new publication, talk to your prospective subscribers to answer the below questions…

1. Is your product viable? Is there demand for what you want to launch?
2. What are your prospects’ needs? Which pain points will shape their buying behavior? Does your new content help them solve any pressing problems?
3. How do your prospects identify themselves? Do they call themselves “pulp and paper marketers” or “litigators in southern California”?
4. What specialized language do your prospects use to describe the problems you want to help them solve?
5. Where are your prospects? What do they read? What groups do they join? Which events do they attend? What do they visit on the web?
6. Who are your potential competitors? Do they possess any weaknesses or strengths that you should be aware of?

You’ll want to talk to your prospects by calling them, going to the events that they attend and posting questions on social networks. This part of your research, while valuable as a first toe in the water, is not a systematic analysis. Before developing your publication, you’ll need to create a more comprehensive look at your prospects, which you can get from:

• Focus groups: This is a good start to more methodical research. The open discussion format lets your prospects brainstorm ideas for you, and will help you define which questions to ask in a survey. Make sure you have some objectives and open-ended questions in mind so you get the most out of your group.
• Online surveys: If you possess a quality email list (the best being your own customers), then conduct your survey online. Formulate questions about your new publication that will also answer the 6 questions you have above. With the report you compile, you’ll know where to find your prospects, which content will excite them, the copy that will peak their interest and where your publication’s strengths will lie relative to the competition.
• Phone surveys: Without a pre-existing relationship to your prospects, online surveys won’t generate a lot of responses. For launching into a new vertical, you may need to conduct phone surveys to get the data you want. It will be costlier, but well worth the price when you launch your successful new publication.

Step 3) Develop your publication

Once you know your target audience and their most pressing needs, your content team can begin developing an editorial calendar to meet those needs. As part of the process, your company must determine…

1. What information you will publish to satisfy your prospective subscribers
2. How you will collect this information (examples below):
   • Surveys
   • Interviews with industry contacts
   • Agglomeration of other news
   • Analysis of existing public information
3. How you will present this information:
   • What will be the unique brand of the publication?
   • How will this brand fit into your company’s family of products?
   • How long will the publication be (how much content is needed)?
   • How often will this information be distributed?
4. The overall value this new publication brings to your company. Consider:
   • How many potential subscribers exist in your target market
   • Reasonable price points
   • How quickly you can reach your optimal market share
   • Whether your new product will cannibalize any existing business

When developing the product, editorial will take the lead, but marketing must provide insight from the customer’s point of view and finance will help determine the overall net present value. Make sure your teams work together, have clear objectives and take all possible factors into account.

Step 4) Marketing copy and strategy

Marketing must now decide how to bring your new content to market. In doing so, focus on what you learned in your research, which will help you:

1. Formulate copy
2. Buy lists
3. Advertise in other publications
4. Attend events
5. Purchase the right search-engine-marketing keywords (SEM)
6. Optimize your site for organic search (SEO)

Know who you are targeting, why they need your content and where to find them. If the market research done in step 2) didn’t answer these questions, formulate another survey or focus group so that your strategy is defined by customer needs.

Step 5) Marketing funnel

What does your funnel look like? How will prospects learn about your publication, try it out, subscribe, renew and tell their colleagues?

Your initial marketing will likely offer prospects a free trial to your product, and you will try to sell them on the value of a paid subscription. Upon conversion, you bill your new customers and start renewing anywhere from 3 to 9 months before their subscription expires. You should also consider a formalized referral program to give subscribers incentives to market for you.

A few different trial options are available, and all of them are appropriate depending on the content you’re offering and the niche you offer it to.

• Pure free trial: This lets someone receive your content without any promise of paying for it in the future. A pure free trial will last anywhere from 2 to 8 weeks depending on the value of the content. If you offer a downloadable directory, you’ll want to avoid using any kind of free trial. But if your information is ongoing news and you’ve just launched a product, this will enable your prospects to sign up without too much commitment.
• Credit card free trial: Here you offer a trial period where the subscriber doesn’t pay, but she must submit her credit card to secure access to the information she wants. The credit card is billed at the end of the trial unless the subscriber cancels beforehand. The barrier to entry here is higher, but you’ll end up with a much better conversion rate.
• Soft offer: An easier method to fulfill, a soft offer simply follows on the billing cycle of the product. You tell a subscriber to sign up for a year, send him and invoice and let him know he can cancel before the credit period runs out, which is usually 1-2 months. The advantage is that, once the subscriber pays, he doesn’t have any non-revenue-accruing time on his subscription.
• Hard offer: Here you don’t even offer a trial. This is best for a database-based product where the subscriber could submit a form, download all your content and walk away without ever paying. In this case, you’ll want to give some sample or demo to showcase your content.
• Recurring monthly offer: This takes the sting out of a whole year subscription, making it feel like less of a commitment for your customer. But beware. While it may seem like these folks will renew forever, customers change addresses, move jobs and cancel their credit cards. Have a system in place to catch them when they stop paying. And make sure you know the local legislation on “’til-forbid” renewals.
• Pure free trial with custom upsell: Use this when you want to charge your customers a different price based on their demographics. For example, say you sell access to a resume database (non-downloadable). One of your customers is Manpower and the other is a small, 20-person company that rarely hires. You give them both the trial and, during the trial, you judge that Manpower places far greater value on the information you’re selling. So you adjust their price upwards and the small company’s downward before converting them to the paid version of your database.

Step 6) Fulfillment

Fulfill your product so that your subscribers never fall through the cracks, either in terms of content delivery, renewals or payments.

• Delivery: How will your product be delivered? Will it live online on a gated website? If so, then you need a real-time-updating database that allows access upon subscription and cuts it off upon non-payment, expiration or cancellation. If it is a print publication, who will print it every week? Who will mail it? How will your list of active subscribers make it to your printer and mailer?
• Frequency: Fulfillment systems use frequency to know how often they need to report on your subscribers, how often ongoing marketing efforts are batched and when to cut off unpaid or expired subscriptions. Usually the batch frequency will be the same as the publication frequency.
• Reporting: Think about what kind of reports you want your fulfillment house to do. Which data are necessary for you to know that your marketing is successful? What time periods are important? For examples, see my article on the 11 essential metrics for circulation marketers.
• Free trial, billing and renewal efforts: Outline which efforts you plan to send to renew your subscribers. How many and how varied will depend on your publication’s price and profitability. For example, if you have a publication that costs $10 per year, you won’t want to include two telephone renewal efforts that may cost $4 per call. But if you’re a specialized publisher selling your newsletter for $1,000 per year, you will want multiple emails, direct mailings and telephone calls at different points in the subscriber’s free trial, billing and renewal schedules.

Generally, marketing is about offering…

• The right product
• To the right person
• At the right time
• For the right price
• In the right place

If your product is profitable enough, offer renewals that reach out by email, phone and direct mail over 6-9 months, possibly even including a discount a couple months after expire. Free trials, being harder to convert and therefore less profitable, will require less effort.

Step 7) Marketing channels

How will you reach your customers? Do you hope they will search on Google and find you? Are your existing customers the best source of leads for your new publication? Do you have direct mail or telemarketing lists at your disposal?

A good strategy will combine market research with your overall campaign plan. If your target market uses LinkedIn, make sure to post snippets of your content as LinkedIn discussions. If they search for needed information on Google, you may need an SEO specialist and some AdWords campaigns.

Be sure to follow the marketing principle outlined in step 6). Your prospect needs to be the right person, want the right product, at the right time, for the right price in the right place. So play with your offers, try promotions on various lists and approach them in different ways, including (but not limited to) events, social media, search engines, advertising in other publications, over the phone, in the mail, over email, on webinars or other areas where your niche is active.

Spreading out your offers along different lines of communication will also remind prospects that your publication is right for them. Though we tend to track promotions on a one-by-one basis using ROI, there is an art to marketing where people need to trust you before they buy. So a first direct mailer may flop in terms of ROI, but also serves to prep your audience for a later email or phone call.

Step 8) Launch

Put together steps 1) through 7) and you’re ready to launch your product. Keep to a strict editorial and marketing calendar, make sure the fulfillment processes you’ve set up are working well, and keep asking your prospective subscribers questions about how they relate to your new offerings. Keep up with marketing, even if the initial results aren’t promising. Some brands take time and critical mass to build. Most importantly, keep an open dialog with your customers by using surveys and social media to fine tune what you’re offering and how you market it.