Find Your Enthusiast Magazine's Circulation Sweet Spot

Enthusiast publications typically occupy a niche that serves a limited customer universe. Not everyone rides a Harley or plays video games. Yet some enthusiast pursuits are capable of serving up a readership in the six figures. Reaching a goal of 200,000, for example, or 175,000, or 327,000, requires focus on either newsstand or subscriptions, and a talent for zeroing in on profitable customer acquisition through a variety of marketing strategies that will pay off in the short term, as in one or two years.

"I don't think that as an independent magazine it makes sense to work on four-year break-even plans," says New York-based Seed Media Group CEO Adam Bly, whose science and culture magazine Seed is expected to reach 200,000 circ from its current 150,000 in 2006. "We need to see a response in a year, 18 months."

Bly says that the compressed timeframe for profitable customer acquisition;Seed's circ is majority subscription-based with about 20,000 sold on the newsstand, but at a high 50 percent sell-through;is driven largely through maximizing shareholder value.

The magazine was relaunched in late 2005 with about $10 million in funding from the Walnut Group. Bly says that he's making "multi-million" dollar investments, particularly in the digital platform, so targeted promotions are the name of the game. "A publisher needs to evaluate how important circulation is as a profit center or whether they're using it to build up ad sales," says Bly. "If the model is to create independent profit centers, which is what we strive for, then we're hedging by ensuring that we have in this model a variety of different break-even points and a variety of different return rates so that we're not just investing in something and hoping to see a response in three or four years."

Co-Reg Deals

Direct mail, for example, which Bly says gets him an eight percent return rate, about five percent higher than normal, is only part of the mix. Online efforts have become central in customer acquisition strategies. One such tactic is co-registration deals.

Jayson Dubin, vice president and publisher of Vermont-based Computer Games, says such arrangements, which are struck with like-minded Web sites, can net him 20,000 to 30,000 leads per month;one strategy that will help him move from 200,000 circ to 250,000 by the end of this year.

"You find a Web site, a gaming site for example, where customers have to register," says Dubin. "After the sign-up process, the customer is presented with a laundry list of products they might be interested in learning more about, and one is Computer Games. They check my magazine and that data is put into a table and sent to us once a month."

Each one of those leads costs Dubin 50 cents, much lower than what he'd be paying for a direct-mail customer. "It's just much cheaper and there is less waste or attrition. For instance, if you blanket 100,000 pieces and you're getting a three-percent return rate, you get 3,000 pieces back and after you work it out with your printing and mailing costs it's pretty much a wash. If you do a cost-per-lead deal, you're looking at anywhere from 50 cents to a dollar per lead depending on how qualified or what kind of information you want."

Similar to Bly, Dubin estimates about two years will net a 200,000 circulation;at a cost of $400,000 per year. "That's just your marketing bill," says Dubin.

Bly also does co-reg deals. He's worked out a deal with dating site, Match.com, of all places, which feeds him leads.

Dubin also recommends affiliate deals;such as those offered by LinkShare;where merchants pay a commission to affiliates in exchange for sales and leads resulting from the partnerships. "They have 1.5 million affiliates, so from our vantage point even if we just got one percent of the affiliates that would be 15,000 and if they each gave us five subscriptions a year that's almost 80,000. That's huge for us," says Dubin.

Mentioned earlier, Bly's technique is to spread marketing efforts over a variety of tactics that net a "few thousand here, a few thousand there." One was a partnership with PBS over the channel's adaptation of the best-selling theoretical physics book The Elegant Universe by Brian Green. The author was featured on the cover of the magazine and subscription offers were distributed with the DVD at points of sale across the country.

Another book partnership with Washington correspondent Chris Mooney and his New York Times best-seller The Republican War on Science led to targeted list purchases that netted over a thousand subs.

On the Newsstand

"We've not pushed subs aggressively," says Stamford, Connecticut-based TAM Communications owner Buzz Kanter, publisher of Harley-Davidson enthusiast title American Iron, among others. "Most magazine publishers lose money on subscriptions, at least on the initial ones and then they hope that they will be able to make up for it in their renewals."

Kanter puts his faith in the newsstand;100,000 copies of the 170,000-circ American Iron are sold through retail, which Kanter has built up one retailer at a time. "It's terribly slow growth," says Kanter. "It's a gradual picking away."

Nevertheless, Kanter says the newsstand reader is more important to advertisers than a subscriber. "This is someone who goes through the store and picks up the magazine, flips through it and says ﾑYeah, there's something here that I want.' Subs more often than not are bought for the deal rather than the product."

American Iron has been growing 12 percent per year on the newsstand, says Kanter, which has allowed him to grow his ad rates simultaneously;but never over 10 percent per year. "They'll tell me to stick it in my ear," he says.

Kanter's newsstand-sales formula is to make sure he nets a little over half the cover price as a remit on every copy of American Iron sold, and then make up the rest of the money that's invested in newsstand efforts through advertising sales. "On the newsstand, sales efficiencies are weak," says Kanter. "In the motorcycle market the sales efficiency for the category is in the high 20 percent range. Most motorcycle magazines are printing four or five to sell one."

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