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Monetizing Affinity Partners



By Bill Mickey
06/30/2006

Association magazines looking for more revenue may not have to look that far. Affinity partners;the insurance, courier and car rental companies, for example;that sign on to offer members discounted rates on services can be a bonus revenue source if converted into an event sponsor or display advertiser. The cache that affinity/advertiser partners bring along can lend an assist to the association publication that's trying to gain leverage over for-profit and competing industry magazines.

Denise Rockhill, vice president of publishing services at NaSPA (Network and Systems Professionals Association) and publisher of Network Support, actively courts her affinity partners for advertising and event sponsorships. While not currently a revenue windfall, averaging in the tens of thousands of dollars per year per partner, the revenue is evolving from opportunistic to regular, stable income. However, there are specific steps Rockhill recommends to avoid alienating a key association partner.

Hurdles

A potential stumbling block for an association exists in how it sets up its affinity partnerships. In some cases, the deal is struck through a department that exists solely to initiate and manage affinity deals outside the sales purview of the magazine team;and they will sometimes offer up free ad placement as a value-add to that deal. Or larger affinity partners are simply uninterested in marketing to a limited, if targeted, circulation. "Large companies like FedEx or Xerox aren't typically interested in our magazines because our circulations aren't anywhere near enough," says Larry Price, publisher at the American Banker's Association. "Our largest circulation is under 7,000. And there are some arrangements where if they request an ad the expectation is I will run it free of charge. If Xerox is interested in advertising we will provide them ads, but we don't go out of our way to push for them."

Starting to Push

Rockhill, on the other hand, saw an opportunity for an upsell. Liberty Mutual is an affinity partner with 20-year-old NaSPA, providing discounted car, home and auto insurance rates to its 30,000 members. "It's a nice little revenue stream coming into the association," says Rockhill, who adds that affinity revenues are about a 1-to-2 percent royalty of sales to members, who get about a 10-15 percent discount on the service. "But then we thought let's take this a step further. Let's see if we can get them to start participating in some of the other things the association does and maybe provide sponsorship money to us."

Rockhill says that, when possible, discuss other ad-based programs with the partner up front as you're signing them to the affinity deal. To do this, make sure you're in the meeting if affinity deals are struck outside your department. Barring that, it's very similar to traditional ad sales. For example, have a specific idea in mind. Liberty Mutual was given the luncheon speaker spot at an event and sponsored lunch for $2,000. Web site advertising, exhibitor sponsorships and membership kit sponsorships add up to about $10,000 per year from Liberty, and NaSPA has nine other affinity partners.

"We're not approaching it like we're knocking on their door and saying, 'Hey, we want your advertising dollars,'" Rockhill says. "We say we need a sponsor for these special programs and would you like to become involved? If you have a special project and can come in with that angle, you're going to have more luck. It's just a matter of going in and finding out what their needs are and where they're putting their money. And then offering something on our end that they can attach it to."

Liberty sees the opportunity for customer retention as the value to the extra marketing they do to members. "If they can keep their policy for ten years, it's more than made up for the cost of the affinity program and they've got marketing money budgeted anyway, so they can toss a little bit to those people so they can continue the relationship," Rockhill says.

She also plays up the value association magazines have against their larger-circulation competitors. "We aren't industry leaders because we don't have the circulation. We have to push the benefit that members pay to belong to the association. They want the publication and are more apt to read it versus some other magazine that comes across their desk."

By Bill Mickey
06/30/2006







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