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Startup Stories: Living a Cottage Industry



By
01/04/2006

In 2004, Time Inc. CEO Ann Moore;known affectionately inside and outside the company as the "Launch Queen";approved five magazines for launch: All You, Life, the now-defunct Suede, Nuts and Southern Progress Corp.'s Cottage Living.

"Cottage was so far ahead of all of these other magazine concepts," says Cottage Living vice president and publisher Steve Bohlinger. "We had been working this thing for three years. We're very patient, we love research and testing, so when it came time to step up in front of [Moore] we were ready."

Patient may be an understatement. The story of Cottage Living's launch dates back to February of 2000, when executives across the company's titles;including Southern Living, Coastal Living and Sunset;began to notice a blip in response whenever the word "cottage" appeared on their covers or within their pages. "There was an increase in reader involvement, reader mail, and newsstand sales," says Bohlinger. "Editors wanted to do an SIP against the word." But Bohlinger says it wasn't until someone from Southern Progress' book division relayed a strikingly similar "cottage" tale during a management meeting that the idea took hold. "Our chairman said ムLet's take some money and do some research.'"

In May 2001, a direct-mail package, with sprinkles of cottage-tinged edit from the company's other titles, was sent to 200,000 on a national list culled from a Time Inc. database. And the results were extremely positive;10.6 percent said they would subscribe for nine issues at $16.00. Bohlinger says it was the highest test-result in Southern Progress history and recent Time Inc. history.

Focus groups were summoned, prototypes developed, innocent mall shoppers intercepted and task-forces created;including an advertising task force, to which Bohlinger was brought on board in July 2002;all funneling to what he says was the biggest test of all: Presenting the magazine to Moore in New York in the fall of 2003. And patience, it seems, paid off. "We knew at times during this process that the time wasn't right," says Bohlinger. "We did our homework, and we were very forthcoming."

Moore ordered up a nine-times-annual launch for November 2004 and initial rate base of 500,000, with the goal of 1.2 million within five years. Still, Bohlinger says, in retrospect, launching at a half-million was too conservative. The magazine moved quickly to up its base to 650,000 in January 2005, and delivered an average circulation of 750,000 through June. Its May-June issue had a circ of roughly 862,000, says Bohlinger, allowing him to pull back on direct-mail efforts. "We want to manage our circ very carefully." The magazine is upping its rate base to 900,000 beginning in January, on target for 1.2 million in 2008.

Advertisers have responded, too. "The goal was 450 [ad pages] this year," says Bohlinger. "We did 540." Ad revenue through November was $21.2 million, per Publishers Information Bureau figures. For its first two issues in 2004, ad revenues were $8.7 million.

But to get such quick results costs money. "When Time Inc. bets on a launch, they bet big," Bohlinger says. "But we have to have sustained growth. The bar has been set. Gone are the days when you could hang around and not show a profit for seven years."

The biggest expense for Cottage Living was capturing the reader. "You have to be very smart with who you're going to send those direct-mail pieces to," says Bohlinger. "It costs a ton of money to go out and get lists." The other big expense was at the newsstand. "We shipped a half-million copies for that first issue to buy eye-level racking," he says."And it's a big risk because if you send all this stuff out and it doesn't work, that's a huge investment loss."

Today Bohlinger is at the helm of a 28-member national sales force. "I have a dedicated sales staff in every major market," he says. "Not many magazines have that luxury."

||| TAKEAWAYS |||

Be as Deliberate as Funding Allows
Time Inc.'s Southern Progress Corp. spent nearly four years researching, testing and retesting;and retesting;to fine-tune their editorial product;and their market.

Hedge Your Bets
It's hard to say launching with a rate base of 500,000 is being conservative, but for Cottage Living, it was. Bohlinger says stick to the plan;there will be plenty of time to grow your base to match sustained growth.

Pay Attention in Those Management Meetings
The idea for Cottage Living was sealed when someone from the book division echoed a sentiment from the magazine side. Be aware of quirky common threads that pop up across your divisions.

By
01/04/2006







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