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Breaking New Ground



By Matt Kinsman
05/29/2007

With a readership of more than 30 million, according to MRI, AARP The Magazine has long held claim to being the largest circulated magazine in the world. But while it's one of the few print properties that isn't facing declining readership and ad numbers, the publishing arm of AARP is embracing the push to become known as an integrated-media enterprise, offering print (including AARP Bulletin and the nearly 800,000-circ. Spanish-language AARP Segunda Juventud), online, events and possibly even data.

Marketing to seniors has long been a non-starter or low priority for many youth-obsessed brands, but AARP's recent efforts are drawing a new mix. AARP The Magazine posted $166.2 million in ad revenue in 2006, up 15.8 percent, according to Publishers Information Bureau. In the first quarter of 2007, the magazine was up 9 percent to $57.9 million, per PIB. Along with the traditional stable of pharmaceutical and healthcare advertisers, new brands include packaged goods heavyweights such as General Mills, Procter & Gamble and Kraft.

But just offering a multichannel approach isn't going to be enough for publishers, according to AARP vice president and publisher of AARP Services Inc. Jim Fishman. The key for AARP's integrated approach is to offer segmentation, not just bundles of print, online and events. AARP The Magazine publishes three versions for the 50-59, 60-69 and 70-plus demographic, with each version tweaked about 25 percent (from different cover lines to different features) for its intended audience. Ironically, Fishman sees AARP's kindred spirit as that paragon of youth marketing, Disney. "Some of these publishers are in a dream world," Fishman tells Folio:. "And I say that because while Disney is giving access to a demographic, kids, and we're giving access to a demographic market,50-plus, most publishers are just giving access to their brand. They put their brand on the magazine, they put their brand online. They're just spreading that same content around, and the value the publisher puts on it is, 'It's all under our wonderful brand.' Well, I'm not sure how deep that is. That's not the way the real world works."

In the following Q&A, Fishman talks to Folio: about the cultural shift AARP The Magazine has had to make, and the challenges it has had to overcome, to make "integrated media" more than just a timely catch-phrase and win new business.

Folio: Give us some background on the changes you had to make. When did this shift begin?

Fishman: As the Boomers started turning 50, AARP realized we had to do different things to attract them. These people thought they'd live forever. We had to speak to Boomers differently from ways we were speaking to our members before that. AARP.org is a huge, rich Web site, but the only people it speaks to are the people who come to it, whereas the magazine goes to every member household.

We have these four publications;two very large, two niche, and then the magazine itself is segmented. That gives the advertiser the ability to personalize the message. If you know it's for you, you'll react in a different way. It's far different from the noise of a typical ad campaign.

We have 43 percent of all Americans over 50 as members. It's not a random 43 percent. They have higher education and higher income than average. It's not wildly selective, it is mass, but not completely mass. The number-one reason people join AARP is to get the discounts that membership offers, but the number-one reason they renew their membership is to keep getting the magazine.

Folio: How do the different channels fit together?

Fishman: We're having more events;we just had one in Puerto Rico a few weeks ago that featured more than 500 exhibitors. Events have become an important element, because people marketing to 50-plus consumers want to have the experience of talking to them, of touching them. Our major events draw 25,000 people or more. That gives a marketer the opportunity to get into their heads. As part of that event, the advertiser gets the cloak of AARP around them.

Each magazine has its own Web site within AARP.org. But the Bulletin is planning for much more of a news experience. People who are turning 50 today are used to getting their news online. That's part of why the newsweeklies are having such a problem. The Wall Street Journal has almost equal circulation for print and online editions. I maintain that's because it's the same people.

Folio: What sort of cultural shift have you undergone to adapt to these new channels?

Fishman: On the business side we went from a staff of one to nine currently. We're in the process of redoing AARP.org;we want it to be much more accessible and navigable. One of the things we're known for is maintaining privacy. We know lots about our members but we don't use that information, usually. We don't have their e-mails unless they give it to us for some reason. But if something is going on in Congress and we want to contact 38 million members so they can put the hammer down on their congressman, we can't do that right now. We're going through a process now where the more we know about our members' expectations, the more we can serve them. If you go and buy a book at Amazon.com, you'd get other recommendations too.

Folio: How has your market position changed?

Fishman: We decided we want to say to marketers, ムWe don't care what channel you want, we'll make it available to you. We reach radio, we have online, events, publications. What we want to talk to you about is how to connect to our market, the over-50 market.' Disney reorganized very similarly. If you want to connect to kids, they aren't there to sell you a TV spot, they're not there to sell you an ad in Disney Adventure, they're there to connect you to the kids' market no matter what channel you choose. It's as customer-driven a change as anything I've ever seen in my career.

We used to say to people, 'If you want to buy an ad in the magazine, you're going to give us a ton of money, because we've got the largest circulation in world.' If they said, ムBut my product is really only for people in their 50s', it was like, 'That's too bad, you're also getting people 60, 70, 80, 90.' Now we can change that ad for each segment. When we started segmenting, for the first couple years, the 50-59 segment had the biggest folio. In the last two years, as boomers started turning 60, the biggest segment has been the 60-69 version. We believe all those marketers who didn't get out ahead of the 50-plus market as boomers entered it are determined not to let that happened again. That is a little counter-intuitive to what most people think. The 50-59 is the most affluent, with a median household income well over $70,000. It's the largest household. Many still have kids there. The first time the 60-69 version had the largest folio, I thought it was a fluke. Then it kept happening.

Folio: How do you handle integrated prices?

Fishman: A full ad page in the magazine is $446,000. It's the most expensive page in publishing. But advertisers don't have to spend it in the magazine, they can put it toward what's most important to them. There are over 80 ways people can buy an ad on the ratecard, and lots of ways they can buy that's not on the ratecard.

In this world we live in, everything is custom. We may offer something as value-added, but they may not want that. The marketer might say, 'We don't really care about that. We want impressions against the 50-plus market. Why don't you give us more impressions as a value add rather than a spot in the Road Show?'

Folio: What's the learning curve for the customer?How do you deal with different silos within the client?

Fishman: The truth is, the chatter is ahead of the reality. Starcom has a group that looks at integrated packages. But almost all agencies take an integrated package apart. They give the print part to their print group, they give the broadcast to the broadcast group, and they put a value on those components and see what it comes to. It's not looked at as an integrated package.

About 15 years ago, I remember talking to an advertiser with no print budget, but I had radio to use as value-added. They couldn't talk to us because they didn't have a print budget. I thought this was the stupidest thing I'd ever heard of. We gave them the print pages for free and charged them for the radio. They were happy, we were happy and in a sense, that was an early version of an integrated package. If they want access in the channel of their choice, you have to figure out a way to do that. We're offering that because we believe that's what's wanted, but the ability to offer a true integrated package is a long away off. I know it's somewhat heretical to say, but I'm not sure we're ever going to get there. Everybody's doing it just in case we get there.

Folio: How does revenue mix compare today?

Fishman: The content is presented as member benefit. If the channel makes money, fine, if they're cost neutral, that's fine. The events we put on, like the one in Puerto Rico, cost $10 admission, but the experience was worth $100. That didn't make money, but that wasn't the reason we put it on. We will continue to put events like that on and I doubt our events will ever make money. Publications are our major source of revenue. The Web activity is much newer. We've done less than $10 million in advertising on the Web each year for the last couple of years but my guess is 10 times that will not be an unusual number five or six years down the line. If we are able to deliver a true integrated package we'll have the support for it.

Folio: How do you determine responsibilities?

Fishman: At this point, we have an ad director for Web sales. He has a staff and all they sell is Web advertising. When they find a situation that appears to be an integrated-sales opportunity, that comes back to our marketing department. The events group is out selling the events. Our print operation is our biggest operation, but almost nobody buys a straight print ad anymore. Everything is going through proposals, and all proposals include some elements of an integrated approach. In most cases, the sales staff of each of these areas will remain the sales staff for that area, and an integrated proposal will come out of the marketing department. Salespeople have to be knowledgeable about other elements, but I don't expect a salesperson to have the same passion for all these different media.

I was at Time Inc. when they [briefly, in the early nineties] went from having a sales staff for each magazine to having this corporate sales approach. I don't mean to say anything negative about them because it's a great organization, but they gave away passion when they allowed the ad agency to say, 'We want so many shovelfuls of impressions' instead of having a salesperson talk passionately about say, Time. They really lost something. All publishers are dealing with this question, and no one knows the answer. I don't pretend to. We'll stay nimble and if we find some way to do it better than today, we'll switch.

By Matt Kinsman
05/29/2007







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