By Christopher Heun

Will the New Year bring more of the bumpy ride that circulators endured in 2005? Will 2006 be a year marked by a tougher fulfillment business, rigorous fax and spam laws, a challenged list environment and repercussions from the audit scandals? Folio: spoke with several industry players about their view on the outlook for the circulation landscape in the coming year. Here, organized by topic in a series of questions, are their responses.

Q: What’s filling the gaps left by declining direct mail and direct to publisher subscriptions?

Most circulators acknowledge that there is no one method for making up for the enormous volume generated by the stampsheets and by direct mail in more robust days. Events are one popular way to reach new readers. So are e-mail and partnerships. At events, attendees who aren’t already subscribers are entered into the database, so why not pitch them?

Partnership marketing is a real area of opportunity, sometimes not within the strict ABC definition of the technique, says Laura MacArthur, consumer marketing director for Dwell. She points to Real Simple’s newsstand space in the Container Store as one example. Dwell has its own deal with the Los Angeles Museum of Contemporary Art. "It’s a really good audience we wouldn’t otherwise reach," MacArthur says.

At the same time, she says, circulators in 2006 may come to the conclusion that it is sometimes better to let subscriber numbers fall. "There’s pressure to keep ratebase levels at unnatural highs," she says. "What’s the benefit you’re gaining by keeping circulation at a level you’re struggling to reach?"

Telemarketing, meanwhile, has become so prevalent that BPA is now looking at mandating that agencies tape their conversations with subscribers as another audit check, says Glen Giles, sales manager at Hallmark Data. That trend is likely to continue in 2006, particularly in b-to-b. "Telemarketing is 50 percent to 60 percent of business in some markets," Giles says. "It’s huge."

Q: What’s the outlook for the list business for 2006? How will it affect publishers’ ability to solicit new subscribers?

Despite a shrinking universe of names and declining response because of overuse, there are early indications that the list business may be about to turn around. Magazines, especially on the consumer side, are investing in direct mail, betting that it will be a resurgent source. It is already up in some markets and larger lists are coming to market. Still, there are challenges, say circulators. "It seems like a very nasty business at the moment. It seems very cutthroat to me," says John Rockwell, group director for audience marketing for Primedia Business’ paid magazines.

MIT’s Technology Review, in the process of cutting its ratebase by at least one-third, will rely on e-mail and Internet promotions rather than direct mail. "There won’t be as many fresh names to rent on our file," says circulation director Heather Holmes. Since other publishers are trimming ratebases too, publishers aren’t replacing the names on their lists, which accelerates list fatigue.

Q: How will the audit scandals of the past affect circulation? What about the new rules passed by ABC and BPA?

It’s the million-dollar question. And who is even completely clear on all the new rules? Says Rockwell: "I like the way [BPA Worldwide President and CEO] Glenn Hansen went at it: Divorce where subscriptions came from and who paid for it. That’s the kind of clarity we need."

Q: Circulators have been cutting costs from the fulfillment business while asking for faster service. As e-mail and registration-based Web businesses proliferate, companies have more lists. Will this continue and what does it mean for the circulator?

Segmenting of markets will continue to increase as publishers seek to take advantage of different delivery channels, most circulators agree. A key will be consolidating all the information about subscribers and their purchases and storing them in a single, centralized database that gives publishers actionable information about their customers.

However, it will require significant changes in the way publishers interact with fulfillment companies. "The boundaries to having an integrated look at customer ordering are going to fall away," says Rockwell. "Fulfillment houses will have to follow. All of this is not about technology, it’s about the business rules we have in place."

Q: How will the circulator’s job change in 2006?

The Internet has become the focus of attention, both to recruit new subscribers and as a publishing medium. Holmes, who has 20 years of experience in circulation, watched recently as Technology Review cut its print publishing schedule in half, to bimonthly, and revamp its Web site to include multimedia content and other features to accommodate reader preferences. "It’s interesting to say Technology Review is an Internet entity with a print magazine to support it," she says. "Print is ingrained in me; it’s hard not to constantly think about print."

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