Connect with FOLIO:
         

ADVERTISEMENT



FOLIO: Personalities -- The Blog People Page


Matt Kinsman

In a Dotcom World, Have Publishers Forgotten How to Negotiate Printer Contracts?

Matt Kinsman Design and Production - 09/30/2010-09:08 AM

Production departments have been among the areas most ravaged by lay-offs, and some observers say that loss of expertise leaves publishers at a disadvantage when negotiating printer contracts.

"When publishers got rid of the production manager, they got rid of people who understood contracts," publishing consultant Steve Frye tells me. "Now you have people negotiating printing contracts who are editors, art directors, publishers, who don't really know anything about what the terms should be. Many standard clauses that protected publishers from increases have been eliminated."

Frye cites paper pricing as an example. "Publishers used to buy specific paper, say Chocktaw 40 pound, and the printer would say, ‘OK, if you buy this, your price is $42.50/100 weight.' If Chocktaw raises rates, you'll have to pay more for paper. Fair enough."

But, Frye says, the trend over the last few years has many printers selling generic grades rather than specific brands. "If you've got a 40-pound paper groundwood, it might be Chocktaw or it might not," he says. "Publishers used to be very specific about whiteness, brightness, etc. As an industry we don't have that luxury anymore. Now printers say, ‘We will sell you 40-pound groundwood at $42.50' and when 40-pound groundwood goes up, prices go up. But when it goes down, prices are supposed to go down. It was easy to track when you were tied to specific brand or mill. But when you're tied to a grade, it's based on rumor."

But if that's the case, then you're at the wrong printer, according to one former publishing executive turned printer rep. "Printers should be able to disseminate information in a timely manner to customers," says the source.

Potential Trouble Spots

For Blood-Horse Publications, key contract expectations include a clear understanding of the contract timeline; any allowances with fixed pricing or payment terms; the insurance statement in case of fire, flooding, etc; and a paper pricing agreement, which covers whether price is set for a specific period of time of if the price will fluctuate.

"In our situation our contract is very straightforward and clear," says production director Lisa Coots. "If paper prices increase or decrease, we receive proper notification in writing before the new price goes into effect. We also look for bundle prices since we publish multiple publications. And, if an electronic edition is included with the contract, we request a pricing model for those services."

While Ogden Publications has seen some more leverage in recent years due to a softening demand on capacity and currently uses in-house talent to negotiate contracts, publisher Bryan Welch suggests getting a consultant to oversee contract development if the publisher doesn't have in-house expertise. "Contracts are highly complex, they change over time and it's clearly a process in which each side stands to gain or lose great advantages based on technicalities," he adds.

Potential trouble spots include handling charges and paper storage prices, according to Welch. "Sometimes that's below the radar and can hit a publisher hard. Whether a printer acquires or doesn't acquire paper for a publisher, either of those arrangements can be problematic depending on how the printer is handling surcharges and commissions. Sometimes those have different names in different contracts-you have to drill down the terminology when it comes to paper, handling, transportation and storage. All those sorts of things can become quite expensive if we don't negotiate aggressively."

Another area to watch is the printer's prerogative to hold on to printed matter in case of disputed invoice, says Welch. "Historically, printers have reserved the right to sit on a dated publication until the dispute is resolved," he adds. "That can destroy a publisher's business."

Require a clear outline of all charges and costs regarding co-palletization and co-mailing options, according to the publisher-turned-printer. "These are relatively new processes and often the charges for admin and freight costs are confusing," the source says. And in these days of rampant consolidation, there should be a clause giving the option of opting out of a contract if the printer is sold to another printer.

More...
Matt Kinsman

E-Media, Events Are Fastest Growing Revenue Streams for Consumer Publishers

Matt Kinsman Consumer - 09/14/2010-10:47 AM

E-media is the fastest growing part of the business for consumer publishers in 2010, according to the FOLIO: 2010 Consumer CEO Survey. While that isn't much of a surprise (e-media has been the fastest growing revenue stream in the survey since 2005, the second year FOLIO: started offering the survey) the second fastest growing revenue stream may raise some eyebrows: events.

Live events have long been part of the consumer-publishing stable, but have typically been positioned as value-adds designed to boost or lock-in the print buy. While events are the second smallest revenue stream, in front of only data and market information sales (which actually lost ground as a revenue generator in 2010), consumer publishers are finding success in converting their events to a sponsored model.

Print advertising has fallen to an average of 40 percent of overall revenue for consumer publishers, but it remains the third fastest growing revenue stream. While publishers such as The Atlantic and Financial Times earn headlines for their aggressive digital push, both publications are seeing surprisingly large print gains as well.

2010 Revenue Ratios for Consumer Publishers
Print Advertising: 39.8%
Paid Subscriptions: 21.5%
E-media: 11.6%
Newsstand sales: 9.2%
Events: 6.6%
Data/Market Information sales: 0.6%

[Source: 2010 FOLIO: Consumer CEO Survey]

However, 55 percent of respondents say print growth is coming from new advertisers in 2010, compared to 36 percent of respondents who say growth is being driven by existing print advertisers.

For a full look at the 2010 Folio: Consumer Survey, including specific revenue breakdowns, technology investment and executive salaries, look for Folio:'s October issue, available October 1.


Consumer Publishers Top Lines for 2010

Revenue
Increased: 29%
Decreased: 36%
Stated the same: 29%

Newsstand Sales
Increased: 21%
Decreased: 6%
Stay the same: 31%

Distribution Costs
Increased: 30%
Decreased: 12%
Stayed the same: 51%

Market Share
Increased: 38%
Decreased: 9%
Stayed the same: 46%

Number of Direct Competitors
Increased: 14%
Decreased: 31%
Stayed the same: 49%

Paper Quality
Increased: 5%
Stayed the same: 78%
Decreased: 8%

Staff Salaries
Increased: 14%
Decreased: 24%
Stayed the same: 57%

Staff Size
Increased: 12%
Decreased: 43%
Stayed the same: 40%

Travel/Entertainment Budget
Increased: 9%
Decreased: 47%
Stayed about the same: 39%

CEO Compensation
Increased: 6%
Decreased: 30%
Strayed the same: 58%

[Source: 2010 FOLIO: Consumer CEO Survey]

More...
Matt Kinsman

“The Days of Editors Saying ‘I Want To Write About This’ Are Numbered”

Matt Kinsman Editorial - 08/19/2010-09:53 AM

Social media? So 2009. This year the publishing catchphrase is "marketing services" (with of course, a strong social media component). Depending on your definition, magazine publishers have always offered "marketing services," but today that increasingly has come to mean going beyond custom publishing and targeting below-the line-budgets ranging from direct marketing and lead gen to consumer or trade promotion, events, even market intelligence. Increasingly, publishers are bypassing the agencies to work directly with the brand on the marketing message.

But if the publisher now has direct access (or even input) on the marketing message, what does that mean for traditional publishing roles, such as editors and salespeople? While salespeople focus on the consultative sale rather than just slinging inventory, editors are walking that fine line between editorial independence and client obligation. Business-to-business publisher Watt is offering to develop social media strategies for clients, which includes editors doing "ghost blogs" by interviewing project managers, then writing up a blog post under the client's brand based on that conversation. Watt is charging $100 to $200 per blog posting.

McGraw-Hill considers the topic of marketing services to be a nomenclature issue, since they've offered similar services for generations. However, editors are becoming more targeted in both their traditional outlets as well as more client-oriented work. "Many of these services we've never viewed as publishing solutions," Glenn Goldberg, president of McGraw-Hill's Information & Media segment, tells me. "But increasingly there is a need for edit and there's a question of how you define that. We will never mess with the independence and integrity of the edit process. There are some immutable truths to doing editorial properly. People are making big ticket decisions based in large part on edit, and you want the best people offering an independent view."

Having said that, Goldberg, continues "We need to deliver value in a lineup of other products and services. With AviationWeek, for example, we have wonderful journalists who know the business but we also know there are certain needs those customer segments have. We won't tell them what to write but based on that knowledge there are needs that customers want written about. The days of editors saying ‘I want to write about this' are numbered."

To some extent, that's always been the case. Editors have always been bound to the editorial calendar and if you're not writing about topics that at least appeal to advertisers, there's no advertising. But editors increasingly will be expected to not just write about that category but provide content or at least market expertise for specific clients.

On the bright side, maybe it means more job security. And as management sees edit shift from cost center to revenue producer, who knows--maybe it means a bump in pay too.

More...
Matt Kinsman

Garden & Gun Draws Wrath of NRA for Turning Down Ad

Matt Kinsman Consumer - 08/10/2010-10:22 AM

Recently, the National Rifle Association's member magazine America's First Freedom took Garden & Gun to task for not accepting an ad from the organization. The NRA claimed it was a politically-motivated decision that doesn't stand up for a demographic Garden & Gun claims to serve. According to Garden & Gun, the magazine has a policy of not accepting political ads of any stripe.

"We regret that they chose to write about us without checking their sources with us and were disappointed by their decision to criticize us for refusing their ad without having their facts correct," president and CEO Rebecca Darwin tells me. "From the beginning, we've had a policy of not accepting any political or advocacy advertisement, and in our view this ad fell into that category. The idea that this was controversial is taken out of context as we are, in fact, members of the NRA and clearly run favorable ads of guns and hunting in every issue."

Politicians-in-running aren't the only ones who have learned to step lightly around the NRA. Three years ago, Outdoor Life hunting editor Jim Zumbo took a swipe at ownership of so-called "assault rifles" in a blog. The post generated more than 2,000 comments, most of them negative. Hunting and shooting chat rooms buzzed all over the Internet. The post was made on a Friday evening, and by Sunday afternoon, Zumbo had posted an apology. Unfortunately for Zumbo, the damage was done. His TV show, "Jim Zumbo Outdoors" on the Outdoor Channel, was put on permanent hiatus. His longtime corporate sponsor, Remington Arms Co., dropped their relationship with him. And Outdoor Life, pressured by advertisers and readers alike, accepted Zumbo's resignation.

This time however, the shooting community is much more muted in its reaction, and even supportive of Garden & Gun. "I can understand why no NRA," wrote one poster on shooting enthusiast board Sigforum.com. "When the NRA was more about hunting, okay. But now, I think there is too much stuff about guns in general, and people's perception of the NRA. I'd love to hear their side of it."

"Garden & Gun is hands down one of the best magazines I have ever come across," wrote another poster. "Great articles, flat out amazing photography, the issue itself is pretty much a work of art. All my other magazines go straight to the recycling bin if they don't have something specific I want to keep. G&G on the other hand I have every issue and keep them nice."

That's high praise from a community known both for trashing the quality of magazines dedicated to its sport and for turning instantly on any individual or product that doesn't share its political leanings.

The last year has been a whirlwind for Garden & Gun, from rumors of being on the verge of running out of money to the magazine's acquisition by Indigo Acquisitions LLC, a company co-created by Darwin, to skipping the October/November issue to things starting to turn around with an Ellie nomination this year for general excellence and a bump in advertising revenue.

"We do feel a rebound in our business and in the advertising community overall so that is exciting for all of us in this game," says Darwin. "And, of course, our Garden & Gun Club is celebrating its first anniversary and has been a very successful addition to our business and our brand."

More...
Matt Kinsman

Things May Be Getting Better. If So, What Have You Learned?

Matt Kinsman B2B - 07/29/2010-10:33 AM

There's a new attitude in magazine publishing: Cautious optimism.

In recent months, the industry has seen some flashes of improvement. MPA's Publishers Information Bureau reported that ad pages grew 0.8 percent in the second quarter. That's not too impressive until you realize that's the first time in NINE quarters that PIB reported that both revenue and pages had increased (ad pages are considered the real bellwether for PIB since revenue estimates assume full rate card rates). One hundred thirty magazines reported ad page gains in the second quarter, compared to 15 for the same time period last year.

Elsewhere, MediaFinder says that 87 magazines closed in the first half of 2010, down from 279 in the first half of 2010. The Jordan Edmiston Group reported that media deals were up 52 percent while deal volume jumped 291 percent.

Of course, every bit of good news is tempered by a reality check. A 0.8 percent gain hardly means the industry is back. The number of magazine closures may have fallen but so have the number of launches (90 in the first half, compared to 187 last year, per MediaFinder). Media M&A has been driven by distressed deals such as Reed Business Information and Nielsen Business Media or by high dollar, high multiple online deals that few publishers other than the largest consumer players can afford. The iPad is getting publishers excited again, but tying your next generation product to someone else's proprietary platform raises some real red flags about long-term revenue and audience development opportunities.

But for an industry that's had to duck and cover for the last two years, there are signs that we can go on the offensive again. Digital is becoming a real business for many publishers. Live events that skipped 2009 are back on two (albeit still shaky) legs. What staff remains is typically comprised of people who get the job done.

However, if we sink right back into old habits (running up debt, thinking we don't need to change or chasing new opportunities "just because" rather than vetting that opportunity) any improvement will be short-lived. CEOs whose mantra has been "Just be glad you still have a job" may find themselves explaining to investors why they have a 60 percent employee attrition rate.

We're not out of the woods yet (least of all the thousands of former publishing employees still out of work). But if we are starting to see a turnaround, let's hope the scars we've picked up remind us to be careful moving forward. What's the biggest lesson you've learned from the past year?

More...
Matt Kinsman

The iPad is Great But Remember—It’s Apple’s Way or the Highway

Matt Kinsman emedia and Technology - 07/22/2010-11:42 AM

Magazine publishers are scrambling to be on the iPad and why not?  Wired saw 73,000 downloads in the first nine days after its iPad edition launched and editor-in-chief Chris Anderson anticipated iPad downloads beating newsstand sales (which average mid-80,000) in June without cannibalizing print sales. IDG's PCWorld and Macworld went from 600 monthly downloads COMBINED with their digital editions to 8,000 downloads with their iPad version. With the iPad (and the slew of tablets expected to hit the market), publishers have finally found a format online.
 
But getting an app approved can be a frustrating ordeal, especially when publishers find out at the 11th hour that their proposal has been rejected (in what increasingly seems to be arbitrary fashion). Condé Nast famously had to rework its iPad apps when Apple announced that it wouldn't accept Flash.

More recently, a source told FOLIO: that Sports Illustrated was forced to withdraw its subscription model for an iPad app, even though the magazine felt like it was following similar models of the Wall Street Journal and Wired by allowing print subscribers to access the iPad version free this year, with new readers buying the content a month at a time. Apple is said to have forced SI to change the offer to single copy purchase. SI declined to comment about whether it had to change its subscription model but a spokesperson did say, “We’re working with several partners to develop our subscription platform which we hope to introduce later this year.”
 
Most digital magazine vendors are offering an iPad app these days and serve as an intermediary between the publisher and Apple. But working with Apple can be frustrating for them as well. “It’s tough because they really want you to play by their rules,” Marcus Grimm, marketing director at NXTbook Media, tells me.  “In the process of submitting our app to the Apple Store, we wanted to include Omniture tracking because our publishers have come to expect a lot of data. Apple has been very upfront about saying, ‘Hey, we're going to watch how much data you can give people.’ The Apple process says, ‘If you do anything special with tracking, please let us know ahead of time so we can guide you’ and we wrote a long e-mail about what we wanted to track and why, and their response was, ‘We won't comment until you submit the app.’ We’re developing according to how we think they'll react but that’s not really a business partnership. You just read the spec guide and say a prayer.”
 
That leaves publishers (who have invested significant time and money in developing apps) at the mercy of a process they largely have to guess at. Long-term, an even bigger concern is how Apple can dictate both the financial model and customer interaction with emerging iPad editions.

We’ve often heard that “the newsstand model is broken.” Let’s hope that the promise of the iPad and other tablets isn’t broken before it’s even out of the gate. 

More...
Matt Kinsman

What Kind of Online Editor Are You?

Matt Kinsman Editorial - 07/06/2010-10:53 AM

Most editorial operations are approaching the Web today with a mix of scientific process and search engine voodoo. At b-to-b publisher Questex Media, manager of search Alison McPartland and her team have developed a strategy that includes defining key areas certain editors are good at, and trying to apply those lessons to other editors within the group.

"We want to show the particular strength or weakness in each editor," says McPartland. "There are different ways to focus on how they're preparing content online and we want to highlight those differences. If someone is our top Optimization Editor, what is he or she doing that you could be doing?"

Below are four benchmark classifications for online editors that McPartland and her group developed:

Acquisition Expert: "We measure the amount of page views and unique views that a particular editor brought in regardless of source," says McPartland. "Regardless of whether it's being pushed out via newsletter or they're doing a great job with optimization or another site picked up the content and referred them in, what's the readership of that particular editor? How much total audience is this person drawing in?"

Optimization Editor: "What we did here is look at who on the edit team is driving the most traffic via organic search. We looked at the whole data dump of the month for that editor-keywords, the topics driving interest and the articles that were keeping readers longer. If you work with more interlinked titles, you're probably going to have a better opportunity for this to get picked up, and once it does get picked, up, now our audience is interested in those keywords and topics."

Getting editors to focus on SEO was a bit of a challenge at first. "When we first started working with the editorial team, they looked at it as, ‘Oh, SEO is something that Alison does," says McPartland. "We were trying to get editors to understand that yes, I help them set the foundation of the site-taxonomy and site structure-but at end of day it's up to the edit teams and marketing teams to drive and retain those people. If I build the foundation, they hold the keys to really optimizing well and driving traffic. People don't want to go to category pages, they want to go to editors' articles."

Retention Writer: "This looks at the bounce rate and the average time readers spend on the site. This is tough because we have to look at overall metrics and make assumptions-yes, the bounce rate is low for this one, time on site is high-but what's the quality of the interaction? Are they just trying to find something or are they intent on reading different articles? A quality interaction is the ability to keep readers on the site post-acquisition. Some editors did a good job getting people into the site via certain keywords but then had a high bounce rate. We want to see the audience spending a few minutes on each page and coming back again."

Engagement Enhancer: "Here we are looking at any kind of interaction with the site. Did the reader come in through a blog and comment or did they come in through a new story and register for an RSS feed? What are the editors doing that makes me want to comment or interact with them?

Identifying where specific editors are performing well (and where they are not) in reports the whole team can see raises the level of every editor's game (and sparks some friendly internal competition).

"By creating these different ‘categories' of editor, it's easier for us to see why a particular story or author performs well month over month," says Stephanie Ricca, editor-in-chief of Questex Media's HotelWorld Network. "We don't use these categories as specific descriptors—meaning, we don't say things like, ‘Stephanie is the Acquisition Expert because she does X and Y and Chris is the Optimization Editor because he does B and C;' instead we use Alison's reports to get better at all aspects of what gets a reader to our site and keeps them there."

For example, HotelWorld Network noticed from Alison's reports that certain posting habits, like including related links with stories, make certain authors better at optimizing the content. "So we remind each other to include related links with every item we post, whether it's a standard news release or a bylined article," says Ricca. "It's useful for us to see which authors have high retention rates, because most of them are our regular columnists. If we know that these authors provide content that keeps readers on our site for a relatively long time, we will continue to link to those authors as related links in other stories."

Over the past few months, HotelWorld Network editors have made a strong effort to add all of the "bells and whistles" to all of the content they post. "We are aware of using strong keywords in headlines, we link within our stories (especially to other related stories we have written on the topic), we add related stories to every item we post, and we optimize the meta tags for everything we post," says Ricca. "Alison's reports give us tangible proof that how we optimize our articles doesn't change their content, it just makes it more visible, and therefore more useful. We love to see our names on her reports and it's still a fierce competition!"

More...
Matt Kinsman

Six Things B-to-B Editors, Designers Can Learn From Consumer Magazines

Matt Kinsman Design and Production - 06/17/2010-14:26 PM

Business-to-business publishers seem to be going one of two ways when it comes to their remaining print magazines; either slashing budgets and staff to the bare bones as they scramble to develop replacement products or investing in the print title as a premium offering within their multimedia stable.

Those choosing the latter route are increasingly turning to expertise from the consumer world. Cygnus Business Media recently hired designer J.C. Suares, who has worked with titles ranging from Fast Company to Variety to ESPN. Reed Exhibition's JCK, which unveiled a new and expanded design earlier this month, tapped art director Robert Newman, former design director of consumer titles Real Simple, Fortune and Details, to lead the makeover, which included adoption of a large format (10x12), new sections and openers and (going against the industry trend) heavier and more opaque paper stock.

The new issue (produced by custom publisher TMG, which retained much of the original JCK staff) boasts a 240-page folio and a 48 percent increase in ad pages to 120.

I spoke with Newman about what b-to-b magazines can take away from consumer titles. Newman took pains to say he doesn't want to come across as a consumer guy who is critical of b-to-b. "To me this is a fascinating challenge and the b-to-b sector is very exciting-people are going through a lot of re-imagining and the whole concept of melding the consumer approach with the editorial integrity of the b-to-b approach and their connection with their customers is very exciting," Newman says. "I'm hoping a lot of other b-to-b magazines take up the challenge-it's a cool and very vital section of publishing that we'd like to see not only survive but thrive."

1. Package The Magazine
With JCK, Newman oversaw an effort that completely remade the magazine from design to paper stock to editorial approach. "There is no denying that b-to-b magazines know their stuff," Newman told me. "But traditionally they've been weaker at what consumer magazines are good at, which is packaging. Before the recent economic downturn and shift away from print, a lot of b-to b magazines didn't have to worry about packaging. As long as they delivered the essential material the audience wanted, the ads were there. Now it's more of a challenge and, like consumer publishers, they really have to sell the magazine. We wanted to bring more of a consumer magazine packaging to the quality of b-to-b content."

Use the magazine architecture to let people know where they are at all times, Newman says. "The editors re-imagined the front of book so instead of one traditional opener they came up with five or six new sections-business section, fashion, news. Each section has its own color palette and each has a very strong opener with use of white space and logos on every page to break up the sections. Even within sections we are very aware of the spacing so it's not essential to have little things everywhere. Each section is a mini magazine where you use different texture and pacing. That is a much more traditional consumer approach."

2. Create A Sense of Value
JCK's new oversize format and heavier paper stock is reminiscent of W. "We're creating a sense of luxury and value with the magazine," says Newman. "Fortune recently increased its size and paper stock, which is the direct opposite way things have been going. The idea is people will continue to read the magazine if we make this more of a keeper product. JCK is arguably the type of magazine a retailer will leave in the store. Before it was not necessarily one you'd show customers or leave out. It's a cool kind of tool people in stores can use day-to-day."

3. Differentiate Advertising from Editorial
One of the problems with b-to-b magazines is that the advertising is not quite as glamorous or as well designed as in consumer titles. "Many of the ads are designed by the advertisers themselves and not to criticize but sometimes they aren't very elegant," Newman says. "One of the challenges for b-to-b is to make the ads work but also to distinguish them from the edit. Partial-page ads--half page, two-thirds of a page--are often a challenge for the editor. Use white space to separate ads so it's clear and clean. If every b-to-b magazine adopted a rule that you had to have a quarter inch of white space between ads and edit I'd be a much happier man."

4. It's Better to be Clean Than Clever
Newman says many b-to-b magazines have excellent design, such as McGraw-Hill's Architectural Record and Greensource. However, he also recognizes that most b-to-b titles don't have the budgets of their consumer peers. "You don't need design that's award-winning or edgy or even creative but you do need a design that is orderly and structured and clean at a minimum," he adds. "The reader needs to know where they are at all times in the magazine."

5. Think About How The Reader Reads The Magazine
One of Newman's biggest pet peeves is the editorial assumption that all readers read the magazine the same way and they do it cover-to-cover. "We all know that's not true but many b-to-b titles don't edit the magazine for different types of readers," he says. "It's no shame to say only a third of your readers skim the magazine. Your job as a responsible editor or art director is to deliver a package of whatever they want, even if they only read the captions. People does this so brilliantly-every photo has a caption. Some magazines don't do photo captions because they figure, ‘Oh it's in the story.' Be aware of how readers use the magazine. If you could, go to people's business and watch how they read magazine-where do they read it? At work? In bed? If you're JCK, how many retailers read the magazine at the counter? That might make me rethink how we put it together."

Newman says that when he worked at Entertainment Weekly, every story, caption and sidebar was surveyed with readers. "We knew what the readers were reading," he adds. "Business-to-business magazines don't have that luxury but they need to act in that way and challenge themselves at all times to make sure there's a dialogue going on with readers. It starts with the editor and a culture of explaining and articulating, not just throwing copy on page."

6. White Space Is Your Friend--Stop Trying To Jam So Much On One Page
One of the biggest problems with b-to-b design is trying to do too much on one page, according to Newman. "More is not always better--readers are very busy and overworked, they don't have a spare moment," he says. "What they really want is for your magazine to curate a little more, not deliver everything, just the most important stuff. Allow more space in the magazine."

More...
Matt Kinsman

What Happened to the Local 'Luxe' Publishers?

Matt Kinsman City and Regionals - 06/10/2010-10:06 AM

Five years ago, “luxe” publishers—glossy, high-end magazines that were freely distributed to select demographics, hotels and retailers—were all the rage in the city and regional market. Modern Luxury, 944 Media, Niche Media and Greenspun were boasting big city glitz and fat books full of ad pages from high-end national and international brands.

Today, however, several luxe publishers have fallen on hard times. In April, Modern Luxury announced it was on the block in hopes of either being acquired or finding a new equity partner. The company lost its founder and previous chief executive, Michael Kong, earlier this year after lenders including GE Business Financial Services took control of the company after Kong was said to have defaulted on $120 million in debt. However, In a memo announcing the sale, current CEO William Cobert said that Modern Luxury’s advertising revenues spiked 15 percent for its May issues and that the company has booked more than 2,100 advertisers in 2010.

Meanwhile, 944 Media, which covers markets from Miami to San Diego, filed for Chapter 11 bankruptcy protection, spurred by “several potentially burdensome lawsuits,” including one around 944’s 2008 Super Bowl event that alleges mismanagement and even racial bias. According to the filing, 944 has between $1 million and $10 million in assets and $50 million in liabilities.

Too Much PE, Too Few Local Advertisers

Some of the problems can be linked to private equity investment gone bad—something plenty of national consumer and b-to-b magazines are familiar with as well. “Similar to b-to-b, there was suddenly a lot of money around for investing—Shamrock gave a ton of money to the Kong brothers at Modern Luxury, Greenspun bought out Niche Media and Ocean Drive,” says one observer. “A couple years ago, everyone was making money, the financial people were getting paid on time and they didn’t take an active role in the business. When things turned south, they came in with a very heavy hand.”

One of the biggest successes of the luxe publishers turned out to be one of their biggest weaknesses—national advertisers. “What fueled the expansion in luxury publications was national advertising—they came in droves, they paid higher prices than local advertisers and those publishers generated a lot of revenue very quickly,” says one publisher. “The problem with relying on that is when national dollars went away, these companies didn’t have a huge amount of local advertising. The typical CRMA magazine didn’t get the uptick these luxe publishers saw but they didn’t get hit as hard in the downturn either.”

More...
Matt Kinsman

Cutthroat Competition: Breaking into a Monopoly

Matt Kinsman City and Regionals - 05/20/2010-08:41 AM

Every highly competitive magazine market is used to trash talk, undercut rates and the occasional sneaky gambit from rivals (remember the Pub Exec publisher trying to get the lowdown on FOLIO: newsletters by pretending to be a prospective advertiser?)

In the city and regional category, where barriers to entry are fairly low yet the clash for the limited dollars of local advertisers can be a life and death struggle week in and week out, competition can get especially cutthroat, particularly when a newcomer enters a highly concentrated market.

In 2008, Rena Tran founded Erie Life Magazine, located an hour and a half from Pittsburgh, Cleveland and Buffalo. Today, the magazine (which has changed its name to Great Lakes Life) generates between $500,000 and $1 million in ad revenue and is sold on more than 600 newsstands in three states and Canada.

Erie Life/Great Lakes Life faced many of the typical startup challenges (particularly as it launched just as the bottom was falling out of the magazine market). But it also ran up against what some observers have called a near-media monopoly in the local newspaper, Erie-Times News. (In 2006, a media watchdog group called The Media and Democracy Coalition protested the FCC considering loosening limits on media ownership, citing the Erie-Times News as one example of a potential problem.)

Erie Life's first marketing efforts included a billboard teaser campaign that said, "Erie Life Magazine. Now There's a Choice." Shortly after Erie Life announced it's impending launch, Erie-Times News announced it was launching its own magazine, Lake Erie Lifestyle.

During Erie Life's first year, former Erie-Times News publisher Jim Dible took over the Erie Chamber of Commerce (Erie Life subsequently quit the Chamber, and in a follow-up meeting, Erie Life vice president and partner Paul Loncharic says that Dible told him that the Erie-Times News saw Erie Life as its "greatest enemy.")

Loncharic says Erie Life ran up against a number of "exclusive partnerships" with Erie-Times News and local media outlets such as the local public television and radio station. Erie-Times News executives also sat on the boards of large hospitals, universities, and arts organizations, such as the Philharmonic, according to Loncharic.

"Some advertising agencies in Erie were even worse," says Loncharic. "They wouldn't risk their relationship with the Times. One agency had told us that if they placed with us they could lose their discounts for their classifieds."

Loncharic claims the Times resorted to huge rate discounts ($700 for a full page versus Erie Life's $2,500 yield for a full page), as well as old tricks such as hiding copies of Erie Life on the newsstand. Even Erie Life's ability to attract writing talent was threatened, according to Loncharic. "We lost freelancers because of intimidation," he says. "It was tough."

Once, the magazine sought expansion money from the local Economic Development Corporation. "They kept begging us to see our financial statements but wouldn't tell us what government loans or grants we were qualified for," says Loncharic. "Months later I was sitting in a meeting with a local businessman who out of the blue asked me, ‘So I heard the Economic Development Corporation wanted to see your books.' I said, ‘How did you know that?' and he said ‘Because the publisher of the Erie-Times News sits on one of their boards and was dying to know what your books looked like. I confronted the EDC about it later and they claimed she wasn't on that board and they are a pillar of confidentiality."

As of this posting, Erie-Times News hadn't returned repeated requests for comment. However, Joe LaRocca, a journalist and author of the blog Erie CounterNewsMedia (whose mission is to "countercheck the Erie news media for inaccuracy, errors of commission or omission, bias, incompetence, arrogance, chutzpah, excessive hubris, and other sins against ethical and professional journalism") says Erie Life's claims don't surprise him.

"Coincidentally, the inaugural edition of a new magazine put out by Marnie Mead Oberle, an heir of the Mead family which owns the Times Publishing Co., made its first appearance in last Sunday's edition of the Times-News," says LaRocca. "It deals with roughly the same subject matter as Erie Life, except that it has more the feel of an advertising supplement. Undoubtedly the Times is trying to force out Erie Life so that its magazine, which currently has the free circulation advantage of the 77,000 Sunday paper's circulation, may take over the field unchallenged. The Times' failure to respond is typical. As a newspaper monopoly, they answer to no one."

More...
Matt Kinsman

'In 2010, the Migration Becomes a Stampede'

Matt Kinsman Consumer - 05/05/2010-14:05 PM

Last week, Peter Sprague, CEO of enthusiast publisher Premier Guitar, offered predictions and analysis of the magazine market in 2010, particularly around the digital push during a FOLIO: Webinar called "State of the Art in Digital Magazines." Sprague's comments ranged from critiquing the surge in electronic devices used by publishers to criticism of current multi-media audit efforts.

Why should you care? At a time when many publications are hanging on by their fingertips, Premier Guitar posted a 35 percent increase in ad revenue in 2009 and is up 40 percent to date in 2010. They must be doing something right.

Below, are several of Sprague's more notable observations:

"We find advertisers and agencies utterly befuddled by the conflicting claims between channels-print versus Internet versus broadcast etc. We've integrated it, so one signature gives exposure across all platforms."

"ABC and BPA have served the industry well but think they've been beholden to print-centric members and they will become increasingly passé if they don't learn how to do multimedia auditing. Third party verification tools are phenomenal. We pay for Google's Urchin—we pay a lot of money for it because it allows you to do such a deep dive into metrics. We have a theory of transparency—customers see the same reports we see."

"We can go in and see the ISPs of who's reading our newsletters and digital editions. If we send out newsletters and see 15 people from Guitar Center ISPs, the manufacturers respond quickly."

"We're selling sponsorships against our iApp--"Free download brought to you by..." For our learning network, Guitar Edge, we offer manufacturers a way to sponsor song downloads in our digital editions. We offer 50,000 copies of licensed content and it's usually gone in 72 hours. Soon we will be monetizing song content on the iPad as well."

"We're seeing session length of 13 minutes with our mobile apps, which we use to send daily content and videos. Yes, you can read our magazine in its entirety on the apps but the greatest application is in real time dissemination of news."

"We've done research against 119,000 people as a sample and the iPhone wins over the Droid in terms of hardware but the AT&T system is such that the Droid has a tremendous opportunity."

"I'm not convinced that digital single issues will succeed. We will test it but I don't think it will live up to the hype."

"We will see more publishers start offering free/paid content distinctions on their sites. Most will fail (if newspapers have shown us anything)."

"We accept the digital exchange of analog dollars for digital quarters-it's worth looking at the dissemination issue, the benefits of real time access and being able to demonstrate how readers are interacting with advertisers beyond archaic bingo cards."

"The death of print is grossly exaggerated. Despite all our content being freely accessible online, our print circulation is going up. Meanwhile, our demographic reader profile is going down-we're seeing younger readers starting to buy print. It seems paradoxial but the numbers are compelling. Still, our digital audience today exceeds print by a factor of 20."

 "We never rent names, we never lease names, and we poll [readers] constantly on what products interest them, and then sell them those products. We're becoming a multimedia retailer."

More...
Matt Kinsman

Setting the Ground Rules for Lead Generation

Matt Kinsman emedia and Technology - 04/22/2010-07:44 AM

Lead generation has dominated much of the b-to-b conversation for the last year, offering hope, revenue and not just a little frustration on the part of publishers, many of whom quickly find out the lead gen business can be more than they bargained for.

"We've been able to re-build our properties not from larger, share-of-market accounts, but with smaller companies who want to see lead generation from e-products," says one b-to-b publisher who wishes to remain anonymous. "Even some of our larger accounts are not buying based on the number of unique visitors or page views or any of the other site metrics. They want to see direct ROI in terms of clicks on their ads."

The publisher' traffic continues to skyrocket but because a follower on Twitter may not necessarily be the right fit for the advertisers, the click-through actually goes down and the publisher can't leverage the traffic itself because that's not a key buying point for many of its customers. "I feel caught between keeping up and wanting to tap into the benefits of these social mechanisms but I've got limited resources and still need to attend to the basics of getting print products out the door on time, developing new e-newsletters and improving our Web sites," he says.

More publishers have to take a stand with advertisers over lead generation. While Haymarket's SC Magazine has used the success it's had generating leads with its SC World Congress virtual show to switch from a flat fee to cost-per-lead model, PennWell's FDIC Online virtual shows will retain a flat $4,500 sponsorship fee that includes leads, according to Eric Schlett, vice president, publisher/executive director of Fire Engineering Magazine.

"We don't want to get into the discussion with the exhibitor of, ‘OK, we had 800 folks come to our booth, but a lot of these guys wanted free t-shirts, how do you qualify them?'" Schlett says. "We don't want to start discounting because of it. Someone like Pierce Fire Truck Co. knows how to follow through on a lead. Another company will say, ‘It didn't turn into a sale.' I don't want to coach their sales staff on how they should follow up. That's not my job."

Sophistication at the client level is all over the map. "We have extremely sophisticated clients who can measure through to sales, to clients who can say, 'I'll give you $20 per lead, take it or leave it,'" says EE Times CEO Paul Miller. "That's not a business we want to be in-it's commoditized."

If advertisers are expecting publishers to deliver prospects right through to the sale, publishers should get a cut of that sale, according to Miller. "If you can track through the sales, why not give us a share of the sales we helped create?" he adds. "That's where client says, ‘That's crazy, the process can't be that sophisticated.' At end of day, it has to be that sophisticated."

More...



CONNECT WITH FOLIO: NOW
         


CAREER CENTER dots icon