month's blog post on "bogus" magazine metrics, I got reactions ranging from
"right on!" (Discover's newsstand
consultant) to "why on Earth would you write a negative blog post about media
planners?" (our ad sales team).
One of the more interesting responses came from Publishers
Information Bureau President Wayne Eadie.¬†
me to expand on their use of rate card revenue (the metric I called "bogus") in
addition to page counts:
have surveyed agencies repeatedly as to what they would like to see reported,
and every time they reply that open rate card reporting is their preference.
Every agency knows what they are paying every magazine that they deal with.
They are best equipped to put the proper "average discount" against the
category or title that they are evaluating, and the open rate card rate is the
best equivalent starting point for them to treat every title or genre fairly.
He went on to note that advertising agencies, not
publishers, provide most of PIB's revenue, so if the agencies say they want to
see rate card revenue, then PIB will continue to provide it.
That makes perfect sense to me from the PIB
perspective.¬† PIB has to assume that if
agencies are requesting (and paying) for the data, then agency research analysts
are doing the extra work to apply an effective discount against each title.
For all I know, this may be true.¬† From experience, though, it seems more likely
that stretched-thin planning teams are relying on the published numbers and
In the past couple of years, PIB has made a couple of moves
that demonstrate sometimes less is more.¬†
I find the new quarterly reports more helpful than the old monthly ones,
because they provide a clearer picture of the overall trends by title and
PIB also recently stopped putting out their "Group
Publishers Report" because of concerns about "irresponsible use of the data without
proper explanation."¬† They would do well
to undertake a similar reevaluation of the rate card revenue numbers.
first quarter PIB ad page numbers painted a pretty bleak picture for the
industry.¬† The revenue numbers told an
equally sorry story for all but a few publications.¬† Among the top revenue gainers were Hallmark
Magazine (up 53.5 percent in revenue) and Disney's Wondertime (8 percent).
What's that you say? Hallmark
and Wondertime have both been shut
down?¬† How could that be? It's because the PIB revenue numbers bear
only a fleeting resemblance to reality.
More broadly, many magazine business metrics reported in the
trade press and analyzed by media planners provide misleading views of what's
really going on in the industry.
Here are three of the most prominent examples, and three modest
proposals on how to fix them:
The Problem: PIB
PIB's advertising revenue numbers are notoriously inflated
because they rely on rate cards.¬† For
many publishers, the real revenue per ad page can be 50 percent of the rate
card after taking into account advertiser discounts, bonus pages, advertorials
and remnant rates.¬† The advertising page
counts are also subject to some distortions but to a far lesser degree.
The Fix: Keep the
ad page counts.¬† Kill the ad revenue
The Problem: ABC
ABC's twice-yearly FAS-FAX circulation report also gets a
lot of media attention when it comes out.¬†
Trade stories usually center on two themes: which magazines grew their
total circulation and which magazines missed rate base. Media planners also
look at these two metrics to determine a magazine's "circulation vitality."
Unfortunately, total circulation and making rate base are
two of the least informative pieces of information on a magazine's pink
sheet.¬† In both cases, publishers can
directly control their numbers by paying for verified and/or public place
subscriptions. From a pure economic perspective, the excessive focus on rate
base can also lead to bad business decisions as publishers pay to acquire and
print subscription copies that have no advertising benefit.
The Fix: Media
planners-along with ABC and the trade press-should be emphasizing the trends in
paid (instead of total) subscriptions and single copy sales, the two metrics
that relate directly to the economic health of a title.
The Problem: Mr. Magazine
I give a lot of credit to Samir "Mr. Magazine" Husni.¬† Anyone who bets their career so solidly on
the magazine industry is a comrade of mine and anyone who reads this site.¬† That being said, his "magazines launched this
month" numbers really tell us very little about the health of the industry.
In February 2009 for example, Husni's site claims that,
incredibly, 80 new magazine
titles were launched, compared to approximately 50 in February 2008 and 35
in February 2007.¬† Husni himself promotes
the February numbers in his blog as proof
that "print is not dead"‚ÄĒand he is something of a fixture in the magazine
trade press (including
Who could these brave magazine-launching souls possibly
be? The Mr. Magazine site helpfully provides
the cover of each launched title so we can do some additional analysis.¬† Roughly 90 percent of the titles presented as
"new launches" are actually newsstand special issues from medium and large
publishers.¬† Having worked at an
enthusiast publisher, I can say that more newsstand one-shots are a signal that
publishers are trying to stretch their investments in editorial (by repurposing
old content) and newsstand distribution (by "stacking" another release onto an
The Fix:¬† Mr. Magazine (or his students) should count
new bipads instead of titles.¬† A new
bipad shows that a publisher is investing in a new magazine with its own
distribution profile.¬† A new magazine on
an old bipad (e.g. "Taste of Home Presents: Casserole Slow Cooker & Soups")
is not a "new title."
Are there other metrics that you find irksome or
misleading?¬† Comment below and I will
incorporate them into a future blog post.
For Discover, online growth doubles as an operating bright spot (we now have approximately 1 million monthly unique visitors) and an all-consuming strategic concern (continuing to grow and monetize that traffic).
Based on my conversations at trade events, however, many publishers still struggle with the basic issue of getting content online in a way that is timely, efficient and interactive.¬† On top of that, the twin financial and publishing crises make it unlikely that anyone can round up the capital to do a 1999-style $5 million custom CMS development.
Enter the open source content management system.
FOLIO: covered a number of CMS solutions in an article last year, along with Drupal and a few other open source options in a blog post this summer.
At Discover, we went with Plone, which was recommended by our outside developers and seemed to combine a simple, intuitive platform with a robust open source development community.¬† You can read a case study about our March 2007 launch here at the Plone site.
Almost three years later, here are my takeaways on our open source experience:
A typically brief and unscientific survey of magazine sites
reveals a range of approaches to online games, from "blah" to spectacular.
Mimicking the success of big game sites like Pogo, many women's magazine sites include a set
of generic, "casual" games‚ÄĒcasino games, solitaire, crosswords, word
scrambles, Sudoku, etc. These games are
easily licensed from a number of providers.
Ladies Home Journal (9.5 million
monthly page views) and Reader's Digest (7
million monthly page views) use games as a lure to get visitors to register.
Hearst has taken the concept to the next level, partnering with a
game developer Arkadium to create games
inspired by their magazines' content. In
some cases, the games are not that far removed from their generic versions‚ÄĒCosmopolitan (35 million monthly page
views) has Make-up Mah Jonngg and Strip Poker.
Other games are a lot more elaborate. Cosmo's "Boy Toy" is an application
where the player guides a virtual boyfriend to fetch cocktails‚ÄĒand avoid a
The mother of all magazine site interactive applications is National Geographic's award-winning¬†Your Shot, an
ingenious combination of user-generated content, photo contest and online games. At Your Shot, visitors can upload photos,
compete to have their photos featured in the magazine, and transform photos
into online jigsaw puzzles. According to
news reports, Your Shot alone drives upwards of 14 million page views per
The lesson here is (to paraphrase a publisher I had lunch
with last month), "If you act generic, you are
generic." Good magazine sites start with
the basic idea ("online games drive traffic") and then build on it in a way
that fits and reinforces their brands (in Cosmo's case, sex and boyfriend advice; Nat.
Geo., photography). Doing that
effectively can drive outsized results.
[IMAGE: Rockstar Games; Grand Theft Auto IV]
As part of my
blog post last week about social bookmarking, I motivated myself to do some
original reporting and e-mailed a few questions to Tim Schigel, CEO of ShareThis.com. Here are my questions and his (lightly
HD: What aggregators/sharing sites have the most
traction in the marketplace?
I'm not sure that I am qualified to answer the question regarding sharing sites
as it relates to aggregated sharing. Our
focus is more of a distributed model. If
you are referring to the social Web services inside of ShareThis we can tell
you that email still dominates, followed by Facebook,
MySpace and Digg.
answer is very audience and site specific, which is why a sharing platform like
ShareThis makes sense. For example, Mr. Wong is very popular in Europe and Digg tends to be more popular in tech-oriented
believe the users want to choose the service that appeals most to them and the
variety is good. Each services has its
HD: Is Yahoo
Buzz (who have been actively pursuing traditional publishers) making a dent
in the overall market?
We definitely see Yahoo Buzz ramping up, and their ability to leverage the
Yahoo portal makes a ton of sense. However, it's only one aspect of the sharing
is becoming a broader term for a set of activities including "send" (email, AIM,
MySpace message); "post" (to blog or profile); "collect and organize" (RSS, tag,
bookmark); and "rate and recommend" (Digg, Yahoo Buzz, Reddit).
These services are often separate, but from the consumer's perspective,
they really need to be integrated. So Yahoo Buzz does a great job for what it
traffic generated by Yahoo Buzz will likely be somewhat transient, or
susceptible to spikes by its very nature. Publishers tell us they are more
interested in increasing engagement on their sites. Not that anyone is going to
turn away a momentary boost in traffic. Further, people want to know what their
network of friends are reading and watching.
when you ask "Are they making a dent in the market?" the answer is, yes, they are making an impact in terms of generating traffic for
selected publishers. The question is
what do you define as the market? Does
success include generating more sharing activity or raw traffic?
HD: Is a shakeout coming? How many of these sharing/bookmarking sites
can actually survive?
We think many of these services and niche sites will survive and thrive based
on their ability to serve their specific audience. We're seeing the number of social Web
services growing every day. We receive
multiple requests per week for services to be including in ShareThis. That's
why services like ShareThis have come about-to enable flexibility for the
publisher and consumer. Ultimately, I
think there can only be a few broad sharing platforms, but many specialized
services that plug into the platform.
Magazine Web site traffic (up 12 percent in Q1
according to the MPA) continues to be a bright spot in an otherwise rough
year for publishers. Magazine sites are
getting savvier about blogs, video
and user-generated content (especially
In the last six months, however, the biggest traffic drivers
here at Discover have been Digg, Reddit, StumbleUpon and a host of other social
bookmarking or sharing sites.
A typically brief and unscientific survey of the big magazine
sites reveals some interesting social bookmarking trends:
My take is that there is still tremendous growth here for
publishers as Web users coalesce around half a dozen winners in this space. Managing
your relationships with the bookmarkers (plus what site real estate you bet on
whom) will determine how much of that growth you capture.
I rarely rise in defense of Cond√© Nast. Wired is an especially nasty competitor of Discover, even though their science
coverage is a small part of their tech culture package. The New
Yorker also competes with us for ad pages.
You have to give them their due, though. From my perspective, they are by far the most
effective spokespeople in the world for the power of magazines. Their editors are industry giants who
straddle the worlds of media, fashion and entertainment. Do you ever hear Anna Wintour or Graydon
Carter whining to the trades about the growing influence of blogs or some other
piece of Internet hype? I don't think
so. I would be surprised if there were many tables set aside for bloggers at
the Waverly Inn.
More importantly, every bit of Cond√© Nast's DNA is attuned
to extracting maximum dollars from advertisers.
As I pointed out in a blog
post a couple of months ago, along with your 12x schedule, Cond√© can
deliver an integrated program featuring Beyonce
caressing your product online, polybagged and on national TV.
This is why the drumbeat on FOLIOmag.com about Vanity
Fair's and the New York Times's green issues and recycled paper (or
the lack thereof) is so off the mark.
For better or worse, green issues aren't about public advocacy. Seriously, how can Madonna, who has a private
jet and at least five enormous homes, be the cover girl for conservation?
The big publishers' green issues are about selling pages to
advertisers who want to be associated with green content. And until those
advertisers demand that their ads be printed on recycled paper (and provide the
revenue that offsets the increased cost), the green issues will keep coming out
on the same paper stock as every other issue.
In the meantime, please pick up the "Better Planet" issue of
Discover on newsstands now. We are
printed on FSC-certified paper and, after an extensive survey of our greenhouse
gas emissions, purchased a carbon offset from carbonfund.org. You can also click over to our Better Planet blog or
enter our Green
Happy Earth Day.
As noted in the Times earlier this week, Google
users can now search deep into content sites without leaving Google, bypassing
publishers' own search functions entirely.
Publishers, contemplating the resulting page view migration from their
sites to Google, have reacted negatively and some have asked Google to stop
providing the extra search box underneath the results for their site.
Here how it works: I'm looking for an article I saw recently
in Scientific American on particle physics so I google "SciAm." The first search result contains a search box
incorporated with the SciAm.com links, so I type in "particle physics" there and
get a page of relevant results from just SciAm.
I see my article on click on it.
Voila! Google creates one additional page view for Google (the second
search results page) and at least two fewer for SciAm (their home page and
their own search results page).
To most publishers, this probably seems like piling on. Google is already probably your number one
source of external traffic. They may
also be your fallback ad network, selling inventory on your site to blue chip
advertisers and keeping most of the revenue.
You don't want to antagonize them, for fear of losing your hard-won SEO
gains (I'm getting a little skittish even writing this post).
This latest move highlights the strategic necessity of
growing organic traffic and internal sales ability, reducing your Google
dependency. A good role model is ESPN
who announced this week that they
are ditching ad networks entirely. Google
may be "doing no evil" to your business, but they're not interested in giving
you any help.
I'm on the record here as being in favor of hiring away
other people's bloggers ("Coveting Thy Neighbor's Blogger") and there was an entertaining Internet dust-up this
week about the next logical step: whether or not big media companies should buy
Segal on breakingviews.com thinks that media companies should steer clear
of buying blogs right now because of some obvious risks. Blogs are tough to value, dependent on
writers with individual fan bases and also notoriously faddish. On top of that, he takes a gratuitous swing
Salmon at Portfolio mag's Market Movers blog thinks that Segal is
"hilariously off base" and "utterly clueless."
He sees plenty of comparable transactions (Engadget, Freakonomics) and the
big blogs have good, old-fashioned revenue as a starting point for
valuations. He also points out that many
big blogs (including Gawker) have thrived after the departure of their founding
editors. Salmon says that acquisition
discussions are going on all the time and, once buyers' and sellers' price
expectations cross, we'll start seeing some big blog acquisitions.
Gawker itself chimes in with hastily
composed rundown of the reasons why a few of the biggest blogs will never be
acquired. Gawker: too
outsider-y. TechCrunch: really just one
guy. BoingBoing: really just three guys
and a gal. Weblogs.inc: already
Based on my experience over the past six month, Segal comes
closest to the crux of the current M&A market: e-media companies (including blogs) do have estimable
valuations, but those valuations are too flippin' high. Like
More than one company has recently expressed to me that
their value expectation starts at "$10-20 per unique visitor" and goes up from
there. In this environment, traditional
media players have a couple of options:
in on the land grab. Discovery Networks
is a great example of this, with their Treehugger
acquisitions. Valuations be damned, if
you're a multi-billion dollar cable network about to go public, you can pay up
for these properties and accelerate your online strategy to light speed.
in your own site instead. Most people I
talk to (who are not multi-billion dollar cable networks) think that valuations
have to come down. In the meantime, if
you have a sub-$15 CPM, you're likely to get a better return on a $5 million
investment in your in-house product than the same money spent on a site with
300,000 to 500,000 uniques.
So Segal ends up being laughably wrong on all the specifics
but right on the recommendation. Everybody
but the deepest pockets probably has to wait for valuations to come down.
Quote from a media reporter at lunch last week: "Every
magazine tells me great things about their Web strategy, then I go back to
check their Nielsen traffic and they're too small to be measured."
If you believe the trade magazine box scores, online traffic was a rare Q4
bright spot for magazines last week in a month of mostly bad industry news
and advertising are down, paper prices keep going up.)
The fact remains however that unless you have swimsuit models or Lindsay
Lohan, your magazine site is still sitting below 100 million (and probably 10
million) monthly page views level.
Magazine sites have grown in the past few years by executing
against the basics-unique online content updated multiple times per day, blogs,
photo galleries, video, podcasts, user-generated content, etc. At this point, though, those features are
just the price of admission. The challenge for publishers now is to take a step
up out of the magazine site ghetto into competition with the real Internet
A typically brief and unscientific survey shows reveals two
emerging trends and one time-tested winner among strategies for putting the M back
Social Networking. Fast
Company is making a notable attempt to supercharge its user profiles into a full-blown social networking site. Though not a consumer site, Variety is also trying its hand at
Blogification. Several sites are jettisoning old-fashioned
magazine navigation in favor of a stripped-down blog approach, a la Boing Boing or Gawker.
The best example of this is the new PopSci.com-but I'll be damned if I'm
going to link to those guys-so I give you ReadyMade
Recipes. Not as sexy as social networking or blogs, but a
proven strategy built on the original user generated content play. Reader's Digest's AllRecipes.com gets 30 times the page
views of rd.com. BHG.com is
also above 100 million page views. Epicurious and MarthaStewart.com are also in the
topmost tier of magazine sites.
So there you have it.
Social networks and blogs are sexy, but apparently not as sexy as a good
ratatouille. Now if only I could think of some
science-related menus for Discover.
Once upon a time (maybe 24-36 months ago), publishers struggled with how to integrate online advertising sales with their existing print efforts.¬† Hire a new sales person who knew his or her way around the Internets?¬† Retain an outside rep firm with a set of relationships in the online agency world?¬† Train your print reps to sell the site?Two to three years later, most publishers have a team of in-house sales reps that can sell integrated packages.¬† Why is this so?
¬†1. Online sales know-how has to be one of your core strengths. You'd be foolish to outsource it.
2. There are no more online-only sales people because there are no more print-only sales people. Your average 28 year-old sales person consumes a ton of online media and wants to sell your brand's entire package. Asking them to sell only magazine ads is a non-starter.3. Every RFP that comes in asks for an integrated proposal and, at this point, we're happy to provide one. We can provide print, online, video, events, whatever. You want ideas? Big-time publishers can deliver video of Beyonce caressing your product online, polybagged and on national TV.
2. There are no more online-only sales people because there are no more print-only sales people. Your average 28 year-old sales person consumes a ton of online media and wants to sell your brand's entire package. Asking them to sell only magazine ads is a non-starter.
3. Every RFP that comes in asks for an integrated proposal and, at this point, we're happy to provide one. We can provide print, online, video, events, whatever. You want ideas? Big-time publishers can deliver video of Beyonce caressing your product online, polybagged and on national TV.
At DISCOVER, we'd have to replace Beyonce with a sexy theoretical physicist, but you get my point.I will even argue that publishers are ahead of advertising buyers in this respect.¬† Looking through our top 100 advertisers, 80-90% of the accounts have print and online media buying at the same agency.¬† When you go the meetings, though, you often see the two teams separately, the print buyer is still looking for online as a value-add, and the online buyer works on another floor or another city.So, get with it, media buyers.¬† When a single planning team is evaluating the combo print-online-event-TV proposal (and paying for each of those elements), that's when advertising will truly be integrated.
I called my wife Tuesday from the Consumer Electronics Show in Las Vegas:
"Forget about building that addition on the house. We need the money for the 150-inch TV I just saw."
Understandably alarmed, she pointed out that we would probably still need the contractor to build a steel-reinforced wall in the man cave to mount my dream television.
As I snapped back to reality, I surveyed the vast expanse of the Central Hall at the Las Vegas Convention Center. Hundreds of exhibitors covered the floor, each showing their own combo digital HD camcorder/DVD player/cellphone/plasma screen/gaming console.
If you've been there, you know that the effect can be overwhelming. Without a knowledgeable guide to highlight truly innovative products, a massive trade show like CES can rapidly become a tiring bore.
One of the perks of being CEO of Discover is that I was able to walk the floor with our news editor, Tyghe Trimble. With Tyghe's guidance, I saw some truly amazing technologies:
Tyghe also separated the quality from the dreck for Discover's Web readers, blogging from the event 2-3 times a day.
Across the show, magazine editorial teams performed the same filtering function, including Popular Mechanics (who had their own branded blog HQ above the floor of the Central Hall), Wired and niche tech titles too numerous to mention. The coverage spanned multiple platforms‚ÄĒdaily blog entries, online video, podcasts, in-book product review packages and "best of" award events.
CES reinforced why print's self-flagellation about digital content is so pointless. First, major advertisers realize that the leading magazine brands are still the most trusted and influential arbiters of what products are good. That's why they hype the awards in their booths and, more importantly, pay significantly more for a single magazine ad page than for a month of online impressions.
Second, the preponderance of CES coverage shows that publishers are aggressively taking advantage of their online products' immediacy and interactivity. This may be more apparent in a tech-heavy environment like CES, but it exposes the fallacy that magazine publishers are ceding any ground to pure-play Internet providers.
I plan to explore this argument further in future posts. For now, though, I need to get back to preparing the man cave for the Super Bowl.