As we move deeper into the second quarter, publishers are beginning to consider their budgets for 2009. How should they adjust their budgeting process to account for the economy and the shift toward digital? How will they rework the budget if initial projections are off?
Topeka, Kansas-based Ogden Publications began its 2009 budgeting process in April. “We have traditionally referred to our process as forecasting rather than budgeting, to promote the notion that we can make strategic changes in direction regardless of the budget period,” says publisher and editorial director Bryan Welch.
A team of 14 Ogden executive and mid-level managers are involved in the forecasting process, and they plan to make several adjustments for rising costs in print. “We’ve been relatively successful in marketing print subscriptions online, and we have trimmed back direct-mail subscription promotions,” says Welch. “We think we can maintain a modest rate of growth in circulation by training our attention on digital sources.”
Lebhar Friedman has a similar focus on digital but Nation’s Restaurant News publisher Tom Larranaga says events and people will also be his group’s primary investments. “Today, the market is contracting and the amount and quality of competition is greater,” he says. “If our goal is to be number one then further investment is required. The tide is out in media and the overall economy, and the restaurant industry is feeling it acutely. We will make the necessary changes in staffing, structure and training to retain and grow our position.”
Financing the Digital Shift
Like a number of other magazine publishers, Advantage Business Media this spring announced that it was cutting several print jobs in an effort to consolidate and build out its e-media team by 20 positions. Last year, the company employed 23 digital staffers and, today, it has 40 and expects to fill 13 more positions before the end of June.
“We are budgeting print to be slightly down year over year,” explains CEO Rich Reiff. “We have a new magazine—Tools & Technology, which launched in February—that will do about $1 million in print its first full year. Still, our print revenue is budgeted to be flat. Our digital plan calls for growth of 44 percent.”
Josh Dunn, president of regional publisher Premiere Media Group, says his digital budget has increased slowly over the last few years (10 percent in 2007, 15 percent in 2008 and 17 percent in 2009) but that print is still his “bread and butter.” At Ogden, digital will account for about 15 percent of revenues this year and perhaps 20 percent in 2009, Welch says.
Some publishers, even as they grow their digital budgets, are revising their digital strategies. While revenue has increased steadily for Advantage Business Media, the company scaled back its newsletters and cut in digital where executives couldn’t demonstrate a clear ROI.
There’s nothing like a first quarter loss to impact a company’s performance over the rest of the year. Leaving some wiggle room, and taking stock periodically, are the best ways to make sure 2009 remains on track.
Nation’s Restaurant News has a monthly budget reworking process called LTYE (“latest total year estimates”). “Contingency plans are rolled out to keep us on plan,” Larranga says. “My business manager keeps me smart, honest and on the best possible track.”