Outsourcing Circulation: Not Just For Small Publishers Anymore
Large magazine publishers have begun contracting circ operations, too.
First it was IDG, which decided to outsource circulation for PC World, Macworld and GamePro to circ services firm ProCirc. A few days later, fellow tech publisher Ziff Davis Media said it will outsource circulation of PC Magazine and Electronic Gaming Monthly to consultant Charles Mast. Then it was Taunton Press, which announced it, too, was outsourcing circulation for all of its consumer magazines to ProCirc.
For IDG, the decision, which eliminated several in-house circ positions, was about partnering with a firm that has â€śdeeper experienceâ€ť and ties with industry contacts. â€śThey have the relationships at the newsstand, they have the experience and the learning from serving a lot of different clients in the consumer and retail publishing world,â€ť IDG spokesperson Howard Sholkin said at the time.
At Taunton, the decision was based on the companyâ€™s subscription sales. â€śIf you look at the top cooking titles, they each sell about 10 percent of their copies on the newsstand,â€ť enthusiast group and consumer marketing senior vice president Janine Scolpino said. â€ś[Tauntonâ€™s] Fine Cooking sells 40 percent. But from a circ standpoint, we are lagging because we donâ€™t have the subscription sales to match. The newsstand suggests that thereâ€™s a consumer craving for our titles, so we need to do better job in terms of subscription marketing.â€ť
The circ department is under fierce scrutiny. â€śAs thereâ€™s more pressure on print and as we think of where to change the cost structures, weâ€™re going to have to review the investment in circulation,â€ť 1105 Media CEO Neal Vitale said in a recent interview with FOLIO: sister publication Circulation Management. â€śI think itâ€™s going to be difficult to sustain levels of promotion and historical circulation quality if print advertising starts to erode.â€ť
While it can make sense for smaller magazines that canâ€™t attract and/or retain the necessary talent, some arenâ€™t convinced that contracting circ operations out-of-house makes sense for larger magazines, like IDGâ€™s PC World or Ziffâ€™s PC Magazine.
â€śOutsourcing circulation by large titles is just another example of bad short-term thinking,â€ť former Readerâ€™s Digest worldwide circulation president John Klingel wrote in a blog post on foliomag.com. In the post, Klingel argued that publishers should invest more in in-house circulation personnel.
â€śItâ€™s easy to cut workload and simplify operations. But those actions are likely to reduce revenue,â€ť he wrote. â€śPublishers are usually very poor at understanding circulation. Actions that will lead to reduced renewal rates in the future are hard to monitor. And there are many short-term cost savings that will do enormous long-term damage.â€ť
If They Can Do It, Then Why Canâ€™t We?
Consultants and independent service providers arenâ€™t the only ones offering circ operations services anymore. Now, magazine publishers are, too.
One example is Illinois-based Scranton Gillette Communications, publisher of titles serving the transportation, lawn and garden and wastewater markets. Although the publisher has yet to land a magazine client, the company says the initiative provides an opportunity to diversify its circulation departmentâ€™s revenue potential.
To start, SGC is targeting smaller publishers in the Illinois region. Services include subscription fulfillment, new subscriber acquisitions and renewals, budget preparation and management and marketing/sales support. Circulation director Michael Serino says SGCâ€™s circ services are a â€ścost-effective solutionâ€ť for improving a small publisherâ€™s circulation and for increasing â€ścompetitive advantage in the marketplace.â€ť
Third-Party Circulation Firms:
Client size: All
Monthly retainer: $6,000 to $12,000
Name: Circulation Specialists
Client size: small single-title, consumer and b-to-b
Monthly retainer: $1,000 to $30,000
Name: Quality Circulation Services
Client size: All
Monthly retainer: N/A
Name: Granite Bay Media
Client size: Small to medium
Monthly retainer: $4,000 to $10,000
Name: Tyson Associates
Client size: Small to medium size multi-title
Monthly retainer: N/A