Connect with FOLIO:


FOLIO: Personalities -- The Blog People Page

Henry Donahue

Why Most Magazine Industry Metrics are Bogus, Take Two

Henry Donahue Consumer - 06/03/2009-12:41 PM

After last 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.  Wayne e-mailed me to expand on their use of rate card revenue (the metric I called "bogus") in addition to page counts:

We 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 trade reports. 

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 category.

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.

Henry Donahue

Why Most Magazine Industry Metrics are Bogus

Henry Donahue Consumer - 05/04/2009-09:13 AM

The 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 report.

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 this one).

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 existing bipad).

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.

Henry Donahue

The Content Management Dilemma

Henry Donahue emedia and Technology - 12/05/2008-11:29 AM

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:

  • Open source delivers on the basics. The move to Plone delivered on the basic value proposition of open source: we got a very sturdy platform that worked well for our editors and didn't have to pay a dime in license fees.
  • Any concerns we had about security or support were unfounded. Plone worked as well or better in these respects than the custom CMS we inherited when we acquired Discover Media in 2005.
  • Our open source platform did not work well for a subset of more specific media applications. The downside of open source is that the functionality you get is dependent on where the developer community decides to spend its time.¬† In our case, this meant that Plone wasn't able to support our desired features in areas like blogs, photo galleries and video.
  • You can solve this problem by integrating industry standard media solutions with your open source CMS. We were able to work with our developers to integrate best-of-breed providers like Brightcove (for video and photo galleries) and WordPress (for blogs) to create a blended solution.
Henry Donahue

The Mother of All Online Magazine Games

Henry Donahue emedia and Technology - 06/30/2008-08:33 AM

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 "skanky ex-girlfriend."

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 month.

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]

Henry Donahue

Social Bookmarking, Part II

Henry Donahue emedia and Technology - 06/03/2008-08:52 AM

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 Here are my questions and his (lightly edited) responses:

HD: What aggregators/sharing sites have the most traction in the marketplace?

TIM: 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.

The 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 communities.

We believe the users want to choose the service that appeals most to them and the variety is good. Each services has its own niche.

HD: Is Yahoo Buzz (who have been actively pursuing traditional publishers) making a dent in the overall market?

TIM: 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 puzzle.

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 does.

The 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.

So 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?

TIM: 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.

Henry Donahue

Social Bookmarking Supercharges Traffic

Henry Donahue emedia and Technology - 05/29/2008-10:00 AM

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 recipes).

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:

  • Almost everyone covers their bases by including a button from ShareThis or AddThis. Both services aggregate the literally dozens of other bookmarking sites, from IceRocket to Propeller to Simpy, making it easy for users to share your content. AddThis and ShareThis are both less than two years old and each has over 20 million users.

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.

Henry Donahue

Green Issue Overload: Lay Off Condé Nast

Henry Donahue Design and Production - 04/21/2008-10:21 AM

I rarely rise in defense of Condé 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 Condé 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, Condé can deliver an integrated program featuring Beyonce caressing your product online, polybagged and on national TV.

This is why the drumbeat on 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 You can also click over to our Better Planet blog or enter our Green Science Fair.

Happy Earth Day.

Henry Donahue

Google’s March to World Domination, Part II

Henry Donahue emedia and Technology - 03/27/2008-10:34 AM

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 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.

Henry Donahue

Why No One’s Gonna Buy Your Blog

Henry Donahue M and A and Finance - 03/07/2008-08:24 AM

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 big blogs.

The recap:

Jeff Segal on 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 at Gawker.

Felix 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. already acquired.

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 1999 high.

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:

1. Get in on the land grab. Discovery Networks is a great example of this, with their Treehugger and HowStuffWorks 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.

2. Invest 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.

Henry Donahue

Getting Out of the Magazine Site Ghetto

Henry Donahue emedia and Technology - 02/25/2008-10:51 AM

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 (newsstand 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 players.

A typically brief and unscientific survey shows reveals two emerging trends and one time-tested winner among strategies for putting the M back into CPM:

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 being Facebook-ish.

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 I'll be damned if I'm going to link to those guys-so I give you ReadyMade magazine.

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 gets 30 times the page views of is also above 100 million page views. Epicurious and 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.

Henry Donahue

Online Ad Sales: Publishers are Integrated, Buyers Not So Much

Henry Donahue Sales and Marketing - 01/30/2008-09:04 AM

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.

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.

Henry Donahue

CES Recap: Magazines Rule the Land of the 150-Inch TV

Henry Donahue emedia and Technology - 01/11/2008-11:50 AM

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.