July 2008

Dylan Stableford — Tue, 01 Jul 2008 10:21:55 -0400

Cover Story

Your Next Generation Web Site
The explosion of the Internet and its availability on various types of devices has established a new reality in the magazine industry. In order to survive a rapidly changing media landscape, magazine publishers must recognize one critical difference between print and the Internet: The Web is a dynamic medium that fosters direct dialogue with an audience; print is a static monologue.
NOTE: CLICK HERE FOR THE PDF VERSION
In today’s marketplace, nearly all publishers have carved out an online presence for their print titles. In some cases, skillful use of the Internet has leveled the playing field, to a degree, between small and large titles. However, an ill-planned and executed online strategy can just as easily have disastrous results.
Given this new landscape, FOLIO: wanted to explore the myriad pitfalls and opportunities of digital publishing. So in April and May, we undertook a major research initiative, with both empirical and anecdotal reporting, to establish a baseline for where the industry is now with its e-media efforts, and where it expects to be in the next 12-to-18 months.
We covered everything: We asked about ad revenue, editorial, technology, staffing, outsourcing, and much more. We spoke with a number of CEOs, editors, publishers, owners and consultants from both large and small businesses. We interviewed 30 executives, asking about their experiences in transitioning from print to online. They ranged from small startups with limited budgets—such as Forensic, based in Amherst, New Hampshire—to large corporations with big plans and the wherewithal to make those dreams a reality, like ESPNtheMag.com.
At the same time, we conducted a two-part, 49-question survey that was sent to 9,479 magazine-industry professionals. We received 598 responses. Selected results are included throughout this report.
In the following pages, we will identify specific steps and technology options for executing a digital media business effectively. This report is intended to serve as a strategic primer for publishing executives looking to make the next-level investment into their interactive businesses. We assume that your brand has a Web site, we assume that you believe you need to do more with it. From that premise, we’ll cover everything you need to do next. That includes:

Section One: Setting Objectives
Section Two: Projecting the Revenue Opportunity
Section Three: Evaluating the Applications, Features and Software You Need
Section Four: Evaluating Staffing Needs and Whether to Hire Within or Outsource
Section Five: Setting a Budget
Section Six: Projecting ROI
Additional reporting by Eileen Davis and Dave Iannone

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Event Planning in a Tight Market
Soaring gas prices, airfare and hotel rates are now affecting one of the largest growth areas for publishers: magazine events. While American Business Media says events have eclipsed print as the largest revenue stream for its members, skyrocketing travel costs could dampen the party for both b-to-b and consumer publishers. According to the Society of Independent Show Organizers, 50 percent of respondents to a recent Travel Costs Survey say they expect a moderate impact on their events business while 39 percent said it will be a great impact. Forty-one percent of respondents say they expect to see a 10 percent drop in expo attendance over the next 12 months.
And with most event venues booked several years in advance, there’s little publishers can do. “Mostly I am downgrading my attendee revenue estimates,” says Scott Wolters, director of tradeshows and conferences at BNP Media. “If we are considering launching an event or holding an annual event again and it will not or has not met what we set as minimal profit levels, we will not move forward. On the other hand, our online events are going through the roof.”
To cut costs, BNP is doing less direct mail, less travel (including conducting more site inspections online) and less outsourcing.
Still, the reality is attendees are limiting their travel. “People are not going as deep into their organizations as they used to,” says Galen Poss, president of Hanley Wood’s Exhibitions Division. “They used to bring seven or eight people. Now they bring four or five. Instead of staying three or four days, they stay two days.” While the World of Concrete show was flat and the Surfaces show was down slightly in attendance, Hanley Wood’s event business grew double digits last year and will grow again this year, according to Poss.

More Bang For The Buck
Publishers should be leery about cuts that will affect the onsite experience. Hanley Wood has added “Live Action Clinics”—a series of training seminars for attendees—that take place on its exhibit floors to drive exhibitor traffic and give attendees something extra. “We’re trying to build a value proposition—if people are still spending the same amount at your show, you have to give them more for their money when things get slow,” says Poss.
The publisher will also co-locate some events, such as the Construct Show and DFM in 2009. “They will be held as a co-location so exhibitors and attendees get twice as much bang for the buck,” says Poss.

Smaller, More Local Events Are In
Consumer publishers often take their events to the audience via mobile tours. Gas surcharges, which event agencies include to cover gas price increases, can cost an average tour $3,000 to $5,000 quarterly, according to Folio: sister magazine Event Marketer.
Instead of cross-country tours, some publishers are turning to regional-specific events as well as one-day events. Make enjoyed better than 50 percent annual growth for the Maker Faire, which drew more than 65,000 attendees in May. “We’re trying to bring the Maker Faire to regional markets so that people can attend without having to get on an airplane and in many cases, even avoid hotel stays,” says associate publisher Dan Woods. “We are also beginning to host smaller one-day ‘Maker Square’ events.”
Working Mother Media, which produces 20 to 30 events per year, including the Multicultural Woman National Conference, is also considering smaller events. “We’re creating more customized and topic-specific events, including virtual events and smaller one-day or custom-built events,” says director of programming Janet Wigfield.
Still, events have proven resilient during past slumps. “The face-to-face sector is usually later to go into a downturn and, in many cases, can be fairly quick to come out of it,” says Poss. “Exhibitors may hold back their participation but they usually don’t pull out because it sends a very confusing and troubling message to the marketplace.”
From Editor to ‘Content Strategist’
At the FOLIO: Publishing Summit earlier this year, Meredith Publishing Group president Jack Griffin said, “We don’t hire editors anymore, we hire content strategists.” He was referring to Meredith seeking out editors who aren’t simply about putting words on page but driving a multimedia editorial strategy.
But does the term “content strategist” represent a fundamental shift in editorial approach or is it just repackaging what editors have always done under a spiffy “new media” name? FOLIO: polled a selection of editors from the consumer and b-to-b sides on what the term “content strategist” means to them and the ramifications for the mindset of editors in their day-to-day jobs.

Wyatt Kash | editor-in-chief | GC
One of the biggest differences is the need to think more holistically about the user experience online. Both roles require understanding who your readers are and anticipating what will keep them engaged. In print, that usually means looking for, developing and packaging stories that are relevant to your reader. But online, you need to anticipate how and why people come to your site, what they’re looking for and how easy you make it for them to do some of the things they expect. We did a reader survey that found more than 25 percent of readers were getting our e-mail newsletters via smart phone (mostly Blackberry and Treos). If they clicked the link in the newsletter to read more of the story, they ended up on a Web page that was nearly impossible to read. We opted to build a set of mobile-friendly Web templates and today we get more than 50,000 page views a month from mobile viewers.

Monika Bauerlein | editor-in-chief | Mother Jones
In our opinion, there is no huge difference between an editor worth his or her salt and a content strategist. Both need to think about what kinds of stories to tell; how best to get those stories to an audience; and how best to get a conversation going between the audience and the institution. The difference is that the Internet enables editors, or whatever we chose to call them, to take advantage of that two-way street in many more ways than used to be possible in the past. In our work as editors/content strategists, we’re always thinking about which medium is best for telling any given story and how to make the two formats reinforce each other rather than compete with each other. The best example that comes to mind is our Iraq War timeline, which worked very well in print as an in-depth project and then online as an interactive tool.

Arnie Weissmann | editor-in-chief | Travel Weekly
The ‘traditional editorial role’ hasn’t really existed for more than 20 years. We all became content strategists as soon as we became aware of CompuServe and the other early online services. We maintain the title ‘editor’ because ‘content strategist’ looks pretentious in the masthead. But what editor wouldn’t weigh how to exploit—and balance—every available distribution option? Travel Weekly had an aggressive Web strategy early but in reality we got ahead of ourselves. When we re-launched the Web site earlier this year, it not only had a new look, it had a completely new business plan. Editors today can’t just look at print and Web distribution in a vacuum. Our stories must provide more information—contextual information—to readers quickly or they’ll likely be disappointed.

Gayle Butler | editor-in-chief | Better Homes & Gardens
A content strategist must not only create great content but also understand how to make sure that content reaches the consumer when, how and where she wants it. Ten or 20 years ago, perhaps a magazine could just push out editorial and wait for the consumer to come to us. Now we have to know that consumer better, understand her needs more intimately and put her at the center of everything we do. It’s much bigger than just thinking of digital as an ‘extension’ of the magazine. When we announced plans to launch an extensive home line with Wal-Mart later this year, I found myself looking at and thinking about how the consumer will react to the Better Homes and Gardens brand name on products they will use.
Turn and Burn or Passing the Torch?
While no one wanted to admit that the market at the time was in a state of recession, the consensus among speakers and attendees at DeSilva + Phillips’ annual Dealmakers Summit earlier this year in New York was that the economy would get worse before it got better. They were right.
Since the conference in February, stocks have plummeted due in part to the slumping housing market and to skyrocketing crude oil prices. Possibly more telling (and more worrisome) are the dwindling workforces at financial powerhouses like Goldman Sachs Group and Morgan Stanley. The worst is ailing Bear Stearns, which reportedly reduced its workforce by about 66 percent (Stearns in March agreed to be bought by rival JP Morgan Chase & Co. for $240 million—or just $2 per share, a 90 percent loss to what the company was worth a week before the agreement).
“What we need to worry about are the credit markets,” says CCMP Capital Advisors managing director Michael Hannon. “If the credit markets shut down then magazine deals just won’t go through. There was a time when you’d get 8x leverage on a magazine deal. Now, it’s more like 5x. In fact, there was a point when creditors didn’t want to lend even at 5x. In the credit system, that’s the equivalent to a heart attack.”

A Changing Private Equity Landscape
As 2008 nears the fiscal halfway mark, eyes around the magazine publishing industry are looking toward the health of its private equity firms. Over the last couple of years, a number of groups—including Boston Ventures, the Wicks Group and Alta Partners—have seen dramatic changes in the make-up of their private partnerships, as their founding partners have departed and associates and principles have moved up to partners and managing partners. Do these shake-ups represent inner turmoil at these firms, or are the founding partners simply passing the torch?
“It is common that the composition of private equity partnerships change over time,” says VSS Secured Capital partner Hal Greenberg. “This was the case years ago at GTCR, Hallman & Friedman and Tommy Lee, and is the same today. If partnerships like Boston Ventures, Wicks or Alta Partners are now changing, it isn’t worrisome.”
Boston Ventures was founded in 1983 and today is headed by a team of four partners and principles but the firm’s senior partnership departed within the last couple of years.
“Boston Ventures had, all at once, some of their senior partners depart,” one knowledgeable source tells Folio:. “When you have institutions looking to invest their dollars, they still like to have grey hair at the table. They just do. It’s not necessarily a significant challenge for them since they raised their fund and will put it to work rapidly to produce returns that are attributable to the new partners.”
Some, however, see the changeover as reflective of poorly performing deals from Boston Venture’s previous fund. “Generally, there were some funds that were put to work in 1998, 1999 and 2000 that, frankly, because of 9/11 and the recession, didn’t turn out so great,” says another source. “In the case of Boston Ventures, the new fund that they have raised (about $400 million), which closed about six months ago, is about half the value of the previous fund due to that fund’s poor performance. When you have a smaller fund, you need to reduce the partnership proportionally.” One of Boston Ventures’ better deals was the sale of its minority stake in World Publications to the Bonnier Group in May 2006. In 2001, observers questioned its acquisition of Northstar Travel Media, which Boston Ventures put back on the block this spring.
The fact that private equity founders are looking to move on can sometimes be a positive thing, according to Oakstreet Media CEO and former VSS managing partner Tom Kemp. “Private equity is a relatively new business, having started 20 to 25 years ago,” he explains. “The guys who started some of the original groups like Boston Ventures were 45 years old or so at the time and now are 65, 70 years old. What’s happening with private equity partnerships right now is the natural progression and transition from one generation of partners to the next.”
Whether it’s because of poorly performing funds or personal decisions, some private equity groups falter and break up. New York City-based Seaport Capital is said to be breaking up as a partnership. Seaport invests in private companies with market capitalizations between $20 and $100 million and equity needs of $10 to $35 million. In February, Seaport sold Virgo Publishing to Arlington Capital Partners for an estimated $100 million.
“These things happen, especially to relatively small partnerships,” one source says. “For whatever reason, partners decide to go their separate ways and start their own funds and new companies.” Seaport Capital did not return requests for comment.
“Generally speaking, private equity founders are entrepreneurial by nature,” says Greenberg. “The fact that they move on after a successful run is common.”

Growth Prospects Will Drive Market
As private equity firms navigate their partnership transitions and begin managing smaller funds, industry players and observers are left wondering how magazine M&A will play out over the next year.
“These partnership changes will have a negligible impact on media M&A,” says Seth Rosenfield, a director at BMO Capital Markets. “What will drive the market for the PE investor is leverage and growth prospects. The media business has proven that you can invest in companies below $10 million of EBITDA, between $10 and $30 million EBITDA, and north of $30 million EBITDA. Whether they have big funds or small funds I don’t think it will have an impact.”
According to Kemp, private equity firms may start to hunker down, holding onto properties longer (at least in the short term) and manage their portfolios hoping that the cycle will change. “The basic business private equity model is still very attractive and returns overall have been good,” he says. “We’ll see lower- to mid-market funds continue to be most active. While you can finance a $100 million now, the real trouble is with the $1 billion deals. They’re just not happening.”

Face Up

Face Up: OnEarth
Issue: Summer
Frequency: Quarterly
Launched: 1979
Circ: 175,000
Editor: Douglas Barasch
Publishing Company: The Natural Resources Defense Council
Art Director: Gail Ghezzi
In building its covers each month, OnEarth, whose objective is to build awareness of ecological threats, has to be “extremely aware of not scaring away readers—and potential readers—with the latest grim news of the day,” says editor Douglas Barasch. The goal, he says, is to “invite readers in to difficult terrain without softening the message.”
The cover story topic for its summer issue is the sea level rise in Bangladesh and its potential consequences for the country and its people. To humanize the disaster and make it less abstract, the OnEarth team decided to represent the threat posed to millions of Bangladeshi through the image of one woman submerged under water. The team was inspired by the 1955 film “Night of the Hunter,” according to art director Gail Ghezzi, as it had “an eerily beautiful underwater scene of a drowned woman” that tempted viewers to “look at it over and over again, to freeze the frame.”
The team took pains to create a provocative yet not exploitative cover. In a model, they wanted someone who looked like a “real person” from the same part of the world the article described but not just because of her clothing. “We debated the idea of the model wearing a burka but realized the choice could potentially be offensive to Muslims,” says Barasch.
Logistically, the photo shoot itself—shot in a pool—was a challenge. “You don’t have much control when you are shooting under water,” says photo editor Monica Bradley. “We wanted to create a sense of urgency and discomfort but at the same time show the woman as powerful and potentially in control.”
Ghezzi says the model looked unnatural and uncomfortable in many of the frames but all they needed was one great shot and they found it. “Her eyes are intense. She is not helpless in her situation—she offers a warning,” Ghezzi adds.

DESIGNERS' COMMENTS
“The logo is clean, clear, strong, and impactful. The use of color/transparency instead of a word space is effective here and creates emphasis on the most important word. Powerful photograph, and the yellow/gold color of her garment brings the eye right in. As for the typography, this is the weak link of this cover. The random vertical alignment of the type below the logo greatly reduces readability and asks the reader to work too hard to get through it. In addition, the ‘trendy’ and overused technique of bouncing point sizes is visually busy and reduces the readability even more.”

Ilene Strizver | TheType Studio

“I think it’s a solid cover. The color contrast in the photo is great. It’s a striking image that quickly communicates its horrifying point. The typography is clean and modern, though I’m not sure the type that begins with ‘millions of...’ actually benefits from being staggered. However, it does read clearly and communicates the information which is the key to good design.”
Jamie Stark | Stark Designs

“I really like the bold yellow color structure against the sea blues, but the cover as a whole lacks interest. There’s really no depth from one layer to another to distinguish text vs. image vs. logo, other than the transparency in the flag text at the top. I would have liked to have seen the all-white headline, subhead and byline have more presence. Overall, it gets the message across, but doesn’t jump out at the reader.”
Anthony Ficke | Creative Director | AB Communications

Best Practices

The One-Man (or Woman) Art Department
If you’re the whole of a one-person art department—or even just part of a very small team—you know what it’s like: you’re busy laying out every department and feature while arranging photo shoots; sourcing clip art; hiring illustrators; balancing the budget; working on collateral, supplements, newsletters, maybe the Web site—all the while staying creative and fresh, producing high-quality work that pleases everyone on the magazine team.
For smaller publications, a one-man (or woman) art department is the rule rather than the exception. So how are these tiny teams making it work?
Justin Heister, solo art team for skateboarding culture magazine Focus, says, “Besides just keeping everything organized and templates made where possible, there really isn’t anything I’ve found to dramatically streamline work.”
In particular, he says, interns aren’t the answer. “We find more time goes into giving them direction than what would have been spent just doing the work ourselves in the first place.”

Coping with the Challenges
When Primedia’s Sail downsized its art department in January from three to two people, “the transition was painful to say the least,” says design director Paul Lee. “It took us about three months to restructure and settle on a new workflow.” The magazine decided to stop accepting films and slides and now only accepts digital files. The team also created an extensive, keyword-searchable database of images—the magazine publishes more than a hundred images per issue and receives more than 1,000 for consideration each month—doing away with “many old filing cabinets and the time consuming work of creating and printing contact sheets,” Lee says.
Another key is developing strong relationships with photographers, illustrators, freelance designers and editors. “There have been times when I would call an illustrator for an assignment with a one-day turnaround, or with virtually no budget,” he says. “Be good to your contacts and your edit team. There’s no room for attitude or for gaining respect by fear.”
Sometimes, this means developing “tough skin,” says Adana Jimenez, art director for Scholastic Marketing Partners. “You need to learn how to voice your needs as an art director, working with people who may not be as visual as you.”
For Marco Turelli, art director at Wine Enthusiast, the key is having “the newest, biggest, baddest Mac” on the market with updated design and production software. Also crucial, says Turelli (who is responsible—along with one assistant—for cover to cover design, minus ads, plus promotional material and all collateral for the up to 172-page magazine), is the ability to turn to stock image resources like Getty, Shutterstock or Corbis.
“From the time we receive copy to the final drop dead date, there should be a month to a month and a half to read and plan for the creative,” Turelli says. “That doesn’t ever happen.” Often, he says, stories need to be turned around in a day, especially when writers don’t stick to the initially-planned concepts. That’s when creative needs to be done “on the fly,” he says, and sourcing photos quickly—and cost effectively—becomes essential.
Jimenez is partial to Veer which, she says, has all the benefits of Getty and Corbis and is competitive in price but allows art directors to download high resolution images to test before committing to buy.

What Gives?
Being a one-person art department has an upside, too. “You have full creative control, and having that sort of freedom is great for productivity most of the time, and morale,” says Heister. Also, “it’s great for continuity across the board.”
On the other hand, “this can easily turn into a frustration when you are struggling to break out of your creative box,” Heister adds. “Things start to look too similar for you to be satisfied with them, which is good because it helps you put out the best possible product, but it can also be mentally frustrating, which consequently becomes overly time consuming.”
So what gives, then? According to Heister, nothing. “I never really feel like anything is compromised because I make sure I put in the time necessary...if you put in that extra time to get the results you want, it shows.”

Can They Compete?
So can magazines with tiny art budgets and staffs compete with magazines like Esquire, GQ and Wired? “It can be hard but not impossible to compete and win,” says Lee. “If the director at the helm is a true talent then it will drastically increase the chance that your publication can measure up to the big players.”
For Turelli, competing with Wine Spectator—which appeals to a more discerning wine drinker—means differentiating. “We’re appealing to the mass market consumer looking to have fun. We don’t need the big budgets to try to get celebrity photo shoots.”
For Lee, no matter what, there is a compromise. “Design without compromise is what I consider design for design sake. In the publishing world, we are all faced with different limitations ranging from art budget to our target audience. A good art director needs to know how to work well with the edit team and, more importantly, needs to be in tune with the target audience.”

M & A Scorecard

M&A Scorecard | July 2008
Despite the continued soft economy and questionable credit market, recent weeks have been sprinkled with a number of smaller, more niche-market deals. The bigger news was that Texas-based Austin Partners was said to be the majority buyer of Entrepreneur Media and that Cygnus Business Media is “exploring” its options, which could mean a potential sale.

June 2
Buyer: Interweave
Seller: Four arts magazines (Nielsen Business Media)
Sale Price: N/A
Multiple: est. 4x to 6x

The deal behind the deal: Interweave—a unit of Loveland, Colorado-based Aspire Media—acquired four arts-related magazines from Nielsen Business Media. Terms of the transaction were not disclosed.
The deal included Nielsen’s American Artist, Drawing, Watercolor and Workshop. American Artist, a monthly, was launched in 1937 and has a 41,000 circulation. The other three magazines are quarterlies.
According to Aspire CEO Clay Hall, the magazines and their franchises are a “great expansion” on Interweave’s portfolio. “American Artist and its related publications fit like a glove with our mission and business strategy,” he said.
Interweave Press Publishing group includes 18 subscription magazines as well several special-interest newsstand titles and craft enthusiast events.

Our panel says: “Nielsen was a willing seller and wanted to get the deal done. This is a very strategic deal for Aspire and a good home for these assets.”

June 9
Buyer: Big Earth Publishing
Seller: Telluride
Sale Price: N/A
Multiple: N/A

The deal behind the deal: Neenah, Wisconsin-based Big Earth Publishing expanded its newly-created magazine division with its acquisition of Telluride and its accompanying Telluride Visitor’s Guide.
Featuring health, environmental and sports content about its namesake Colorado mountain town, Telluride is the flagship of Telluride Publishing, which also produces several custom products.
The 25-year-old, twice-yearly has an annual circulation of 70,000. Big Earth publishes books in the culinary, history, environmental, biography and children’s categories, as well as enthusiast titles on fishing and gardening.
M.C. Alcamo & Co. represented Telluride in the deal. Terms of the transaction were not disclosed.

Our panel says: “While this is a small deal, it’s nice to see Big Earth, which is otherwise known for publishing books, continue to expand into the magazine market. Earlier this year it acquired its first magazine, Women’s Adventure.”

June 10
Buyer: Haymarket Media
Seller: Compliance Week (Financial Media Holdings Group)
Sale Price: N/A
Multiple: N/A

The deal behind the deal: British media company Haymarket Media, the 50-year-old publisher of some 100 specialty titles, agreed to acquire Boston-based Financial Media Holdings Group’s Compliance Week e-newsletter. Terms of the deal were not disclosed.
A paid e-newsletter with a $999 annual subscription price, Compliance Week was founded in 2002 by Scott Cohen and Frank Hertz—two of the creators of Boston.com, the online home of the Boston Globe newspaper. In addition to the newsletter, the pair produces a paid monthly print magazine, live events including an annual conference, and a paid access Web site.
The deal is similar to the Financial Times’ acquisition of global money management industry online newsletter producer Money-Media earlier this year.
The Jordan, Edmiston Group represented Financial Media Holdings Group in the transaction. Haymarket’s publications include Management Today and FinanceAsia.
Our panel says: “This is a solid, small tuck-in deal for Haymarket. The deal fits its strategy of owning weekly media assets serving horizontal (i.e. PR, DM News) and vertical (Horticulture Week) served markets.”

June 12
Buyer: ESPN
Seller: Student Sports Inc.
Sale Price: N/A
Multiple: N/A
The deal behind the deal: In its continued effort to ramp up its high school sports product portfolio, ESPN has acquired Student Sports Inc., a high school-focused digital media and event production company. Terms of the deal were not disclosed.
Late last year, ESPN acquired a high school sports and lifestyle group with a similar name, School Sports Inc., which published Rise. Last month, ESPN rebranded it as ESPN Rise and formed the ESPN Rise group, which also includes School Sports’ 300,000-circulation Girl and 100,000-circ Hardwood and Gridiron.
Assets included in the most recent deal are StudentSports.com, DyeStat.com and more than 160 events, like the Nike Combines/Nike SPARQ mini camps.

Our panel says: “This deal is pretty straightforward. It’s a small firm being gobbled up by a big guy with an obvious fit. This one was done by a ‘strategic’ which still has access to financing in this tough economy.”

Columns

Social Networking: Here to Stay
If you publish a magazine, there’s little doubt that you’ve developed a digital strategy. At first, publishers just loaded up the print magazine on the Web and mistakenly thought that they had one. More recently, publishers have learned to incorporate at least some of the attributes of Web 2.0, such as chat, forums, webinars, blogs But where should “social networks” fit in a publishing strategy?
Facebook, the social networking site started by Harvard drop-out Mark Zuckerberg, has grown from 3 million users, when it was limited to college students a few years ago, to more than 70 million users today. Can you imagine the circulation of any magazine growing at that kind of rate, without direct advertising, just by word of mouth? It’s beyond astounding.
And social networking is not just something for young people—the fastest growing demographic on Facebook is the over-40 crowd. LinkedIn and Plaxo, two professional social networking sites, are also showing significant growth.
I opened a Facebook account a year ago when I started teaching a graduate class at the USC Annenberg School of Communication on the impact of the Internet on the traditional media business model. I figured I needed to personally understand what the excitement was all about. And I’m not alone. My “friends” on Facebook include Don Graham, CEO of the Washington Post Company, David Nussbaum, CEO of F+W Publications, and Laurel Touby, founder of Mediabistro.com.
Why do people use Facebook? For students, it is often the center of their lives—they communicate within the Facebook email system, or by posting messages on each other’s sites, they send digital gifts to each other, invite people to parties, or upload thousands of pictures, which are then “tagged” with the names of all their friends. It is a great way to keep in touch with distant friends, scope out the special interests of new acquaintances, join an online support group, or share pictures. To its rabid fans, it is a critical part of their lives.

But Will It Last?
And is it a sustainable business model? Will students who spend two hours a day on Facebook continue to use it as much ten years from now? Do traditional banner ads work on a site like this? Or will the new models of marketing Facebook is experimenting with make a difference?

And Why Does All This Matter To Publishers?
I don’t pretend to have all the answers. But if you are running a media business, you’d better be asking these questions. And you should be trying to experiment with social networking in some way on your own sites. At a minimum, you can create a product Facebook page for your magazine. If you are more ambitious, consider incorporating social networking functions for all your web users.
Businesses, blogs, even politicians, can create their own page on Facebook. Sen. Barack Obama’s page has nearly a million “supporters”, while FOLIO:, a recent addition, has 294 “fans”, and posts video interviews from its own Web site [Edit: FOLIO: offers its own social network at mediapro.foliomag.com with more than 1,700 members]. Even the TV show “The Office” has a page with 52,000 fans. There is no reason why almost every publishing Web site shouldn’t use Facebook for such grass roots promotional purposes.
Social networking is probably most important to publishers because it represents real, albeit indirect, competition for readers and for the dollars of our advertisers. If you can’t fight it, you should join in.
Advertisers are looking for new ways to attract customers. They are using product placements, Facebook applications, and their own Web sites to attract, retain, and engage customers.
And just recently, Facebook, MySpace and Google have opened up their closed network sites to allow users to take their profiles, favorite applications, and networking capacity to other Web sites. “I believe (we) will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to ‘be social,”’ explained Forrester Research analyst Charlene Li, in her own blog.
Your Web developers and operators should be thinking about how to expand this new “social” function on your own Web sites, to enhance your own communities. After all, the most successful publishers are really communication enablers for communities.

Jeffrey S. Klein is Chairman of 1105 Media Inc., a B2B publisher.
Covert Charges
A few seasons back, while doing research for a magazine story on the literary establishment in Boston, I hooked up a recorder to my phone line and called George V. Higgins. “Do you have a few minutes to talk?” I asked the late, great novelist. “And is it all right if I record this conversation?”
Higgins laughed. We knew each other from numerous lunch encounters over the years. “Of course,” he said comfortably.
“I don’t want to miss anything,” I explained. “I want to listen to our conversation again.”
“And you don’t want to break the law,” he said with another laugh.
The law? “Secret recording is a felony in Massachusetts, you know,” Higgins said. “I wrote the law.”
I turned on my recorder as Higgins explained that before he became a best-selling author of The Friends of Eddie Coyle and other books on the criminal life, he was a prosecutor in the attorney general’s office. There, as part of an Electronics Surveillance Act (which enabled law officers to do wiretaps with search warrants in pursuit of crooks), Higgins wrote the law prohibiting secret recordings. “And many an angry spouse has discovered to her or his dismay that they cannot use the recordings they made on their own phones,” he chortled.

What’s An Interviewer To Do?
Where does this leave reporters and writers? In a dilemma. I think we all know someone who records sources without asking permission in order to listen to a conversation again (and again) and quote accurately, or check back if an answer is unclear. Lurking beneath this noble goal is another motive: If this guy says “I was misquoted!” or “I never said that!”—Gotcha!
But if secret recordings are used to rebut a source who says, “I was quoted out of context,” or any of the other standard rebuttals, the courts are likely to find the recordings inadmissible and say gotcha to the writer. First of all, secret recordings are illegal in interstate commerce—that is, calls from one state to another. In some states, only one person has to know that a recording is being made (a truly dumb law, when you think on it). In other states, secret recording is a misdemeanor; in others, both parties must be aware that a recording is being made, or it is a felony.
Apart from the law, however, there is another consideration: Is secret recording ethical? Of course not. The best approach is to play straight with the source and get permission in advance to record the interview. If you think a subject may balk at the idea, here are four ways to make your request a win/win situation:

1. Let’s get this over with. Point out the key advantage of the tool—it saves time. “I’d like to record our conversation so that I don’t have to slow you down for note-taking,” you can say. “This whole thing will be over in twenty minutes.”

2. Our aim is accuracy. “I’m using a recorder so that I can be 110 percent accurate.”

3. Just us. Subjects often wonder what happens to recordings after the interview is over. Will they end up on the Internet? “I’m the only one who will ever hear this,” you can say to neutralize this anxiety.

4. Copy available on request. If the subject is still wary, offer to provide a dupe of the recording. “I’ll e-mail you a copy for your own files.”

If the answer is yes, record the acknowledgment before you start your interview. If the answer is still no, get ready to write. Have note-taking materials on hand. For a phone interview, you can speed the process by taking notes on your keyboard.
Don’t delete interview files until you are certain you won’t need them for future reference. In Massachusetts, for instance, the statute of limitations for filing libel charges against a publication is three years after publication of the offending story. Thus, if a source says “I was misquoted” after the story has appeared, you may have to dig out that old recording and listen to it again. But at least you’ll be listening to a recording that wasn’t done surreptitiously—and the judge is bound to view that favorably.

John Brady is visiting professional at the Scripps School of Journalism, Ohio University. He is a partner at Brady & Paul Communications, a publishing consultancy, and conducts editorial workshops for professionals. For information on his Interviewer’s Handbook: A Guerrilla Guide for Reporters and Writers, his Web site is johnbrady.info, or you can e-mail him at Bradybrady@aol.com.

Features

2008 Regional Magazine Survey
Spurred by a low barrier to entry—including low-cost self-publishing systems and, in many cases, door-to-door distribution—the city and regional magazine category continues to grow, with not just cities but even regions and small towns supporting multiple titles vying for the same readership and often the same ad dollars. Even when one title stumbles, another is there to pop up and take its place. Regional titles are even starting to develop franchise programs, as evidenced by the success of the Edibles franchise, which enables entrepreneurs to buy into a program that produces local food titles around the country in markets ranging from Boston and San Francisco to Shasta Butte. Folio:’s third annual City and Regional Publishing Survey finds a group that continues to flourish—from large urban markets to suburbs and small towns—even as competition grows rapidly and even though they are largely focused on print. However, there is increasing concern that city and regional publishers aren’t doing enough to go beyond their traditional print role.
Sizing The Market
The city and regional market has enjoyed explosive growth over the last five years. The majority of city and regional publishers remain single-title publishers, with 38 percent of respondents saying they publish one magazine, down slightly from 45 percent in 2007. While 21 percent say they offer two titles (down from 23 percent in 2007), 12 percent say they publish three titles, up from 8 percent in 2007 [Table 1].
Circulation varies widely but remains small compared to mass market and even many enthusiast publications. The majority, in this case 30 percent, say their organization’s smallest title has a circulation of between 20,000 and 39,999. Given that the majority of city and regional publishers are still one-title publishers, 28 percent of respondents also said their largest title has circulation of 20,000 to 39,999. Twenty-two percent say their smallest title’s circulation is between 10,000 and 19,999 and 17 percent say it’s between 40,000 and 59,999.
Paid circulation (including newsstand sales) still accounts for the majority of city and regional circulation (36 percent) while the number of “controlled, not requested” titles (21 percent) exceeds the number of “controlled, requested” copies (11 percent).

Revenue Mix
While print titles at large remain flat in terms of revenue growth, 53 percent of city and regional publishers say they expect their revenue to increase compared to what it was three years ago, with 26 percent saying it should be up between 10 percent and 29 percent while 11 percent say revenue will be up by 50 percent or more this year compared to 2005 [Table 4]. Fourteen percent of respondents say they expect 2008 revenue to be about the same as it was in 2005, while 11 percent say revenue will actually drop in 2008 compared to 2005, and a significant 6 percent of those respondents say it will fall by 10 percent or more.
The majority of respondents, in this case 27 percent, said they expect their 2008 revenue to fall into the $1 million to $2.9 million range [Table 5]. However, the next largest group at 11 percent say they expect their revenue to be less than $250,000 this year. Ten percent say they expect revenue to be between $3 million and $4.9 million while another 10 percent say revenue will be in the $10 million to $24.9 million range. Print will account for the majority of revenue.
But even as most city and regional publishers are focused on one title, others are turning to spin-offs and ancillary publications to grow. “Almost all city and regional magazine publishers are now looking to expand,” says Chris Schulz, formerly vice president and publisher at Freedom Specialty Media, which publishes Coast and other titles. “With the core product, your growth is going to slow. Your only chance to grow is to provide new products. In the old days, that could be as simple as a special section—if that was successful, you could spin it off into its own publication. The challenge is with how to staff it and sell it. If it’s a publication with annual or quarterly frequency, you can’t afford a separate staff—the economics don’t add up. You end up having the same staff stretched a little thinner and that pressures all aspects of the business—editorial, advertising, circulation, etc.”
The majority of city and regional spin-offs remain focused on the Shelter category [Table 6]. Thirteen percent of respondents were focused on Tourism/Travel, while 11 percent produced spin-offs for Arts/Entertainment (Renaissance Publishing launched a magazine called On Stage, which covers performing arts in the New Orleans area). Berkshire Living has launched two spin-off titles in BBQ: Berkshire Business Quarterly and Berkshire Home & Garden. “We’re selling an idea that you’re buying a demographic with Berkshire Living and you can achieve that through multiple levels of platforms,” says publisher Michael Zivyak.
Just 6 percent of respondents say they’ve launched spin-offs focused on business for the local market, while 5 percent say they offer spin-offs for the bridal market.

Startup Investment Remains Low
City and regional publishers are often launching products on the cheap by leveraging existing staff and limiting frequency. Seven percent of respondents say they dedicated between $50,000 and $99,999 to their launch, while another 7 percent say they spent less than $10,000 on their launch [Table 7]. However, 6 percent say they put between $100,000 and $249,999 toward their launch, while 3 percent spent a whopping $1 million or more on a launch.
Larger publishers are more likely to launch a spin-off [Table 9]. Forty-eight percent of city and regional publishers with annual revenue of more than $5 million say they have launched a spin-off, while 74 percent of respondents that generate less than $5 million in annual revenue say they have not launched a spin-off.
Most spin-offs seem to get off to a slow start. Twenty-percent of respondents say their spin-off generates between $50,000 and $99,999 in revenue while 18 percent say spin-offs net them between $100,000 and $249,000 [Table 10]. The small numbers reflect the large number of one-off ancillaries the city and regional market produces (7 percent say their spin-off generates less than $25,000).
However, 10 percent say their spin-off generates $1 million or more, while 7 percent say they see between $500,000 and $749,999 from spin-offs and 5 percent say they see between $750,000 and $999,999.
Competition continues to grow rapidly. While 21 percent of respondents say they saw no competitors enter their market within the last five years, 24 percent say they have seen between three and five competitors emerge, 20 percent have seen two, 21 percent have seen 1 and 10 percent have seen six or more [Table 8].

Digital Revenue Lags
City and regional publishers remain solidly print-driven, and there seems to be little disparity between both larger publishers and smaller publishers when it comes to sources of revenue (compared to the broader consumer publishing market, where larger publishers are far outstripping smaller publishers when it comes to online revenue growth). Print accounts for 86.6 percent of revenue on average for publishers with less than $5 million in annual revenue, and 79.1 percent for publishers with more than $5 million in revenue [Table 11].
City and regional publishers trail the broader publishing market when it comes to embracing digital and events. Events account for just 2.8 percent of revenue for larger publishers (and 2.6 percent for smaller publishers) while e-media accounts for 2.7 percent of total revenue for larger publishers and just 1.3 percent of smaller publishers. DLG Media, former publisher of Philadelphia Style, was a leader in e-media among regional titles, before selling to Niche Media in February. Now Philadelphia Style has been repositioned as a regional luxe title, boasting a 62 percent increase in ad sales for the May/June relaunch but Web initiatives are again secondary.

Methodology
The survey sample of 906 was selected from Folio: subscribers who classified their company’s primary focus as city/regional publishing. Readex Research collected data from February 28 to April 10, 2007. The survey closed for tabulation with 246 usable responses—a 33% response rate. The margin of error is ±5.3% at the 95% confidence level.
Case Studies in Custom Publishing
Defining the mission is always critical for a custom publishing project. Is the project about brand exposure? Customer conversions? Maybe even sales?
As custom projects take on more of a multimedia flavor, the overall mission of the project typically stays the same but now there is potential for much more involvement from the client side and much more direct feedback from the target audience.
The case studies presented in this feature reflect how three custom projects evolved from standalone print efforts to a new mission and a new target audience for the client. Rodale’s custom unit talks about how it enabled Little Brown Book—a magazine for the 175,000 high-spending Bloomingdale’s credit card holders—to break through the clutter for a heavily-targeted audience with award-winning design. On the b-to-b side, Everything Channel and Ingram Micro discuss how they’ve gone beyond the typical publisher-client relationship to become true partners in a multimedia, revenue-generating project. And Hammock Inc. repositions a 116-year-old brand for perhaps the biggest challenge for a consumer magazine right now—the newsstand.
PROJECT: Little Brown Book
PROJECT: Channel Advisor
PROJECT: American Spirit

SIDEBARS
Custom Matchmaking Site Hits Initial Goal
Custom content matchmaking site Junta42 Match reached its initial goal of 100 publishing members in early June, roughly three months after it beta launched in mid-March, and is set to open its doors to marketers by the time this issue goes to press.
The service—which, according to founder Joe Pulizzi, is based on a LinkedIn-style platform custom-built by Junta42—requires member publishers to complete profiles that list their areas of expertise and experience, including specific client and project history information. The profiles are audited by Junta42 Match via Web verification and, when necessary, phone calls. Marketers, who can access the site for free, will be able to search the profiles according to their needs and specifications.
The service costs publishers $400 per month or $4,000 per year and is designed, according to Pulizzi, to replace the lengthy and laborious RFP process which takes “anywhere from a couple days” to “a couple months,” and “boil it down to 15 minutes.”

McMurry To Launch Luxury Title
New magazine, called 6, will be advertising-supported.
As one of the largest custom publishers, McMurry is used to generating magazines for someone else. Now, the company is launching a magazine for itself. 6 (the name refers to six “passion points” of the readership: wealth, style, travel, design and body and health), debuts with a November/December issue and is a high-end luxury magazine targeting 100,000 select households with average net worth of $25 million.
With no shortage of luxury magazines in the marketplace, McMurry says it needed to make sure its reader base really represented the affluent, rather than the aspirational readers it says many of its luxury competitors cater to. The publisher began building its target audience by accumulating lists through a variety of different data sources around purchasing behavior that was indicative of affluence—such as real estate transactions or yacht and plane sales—and applied some real world thinking to that. “The definition of a yacht is any sea-going vessel that’s 50-feet larger or longer,” says Tom Garrett, vice president of client services. “But the person who has a 50-foot yacht and the person who has a 100-foot yacht are in two different economic spectrums.” McMurry also gathered exclusive proprietary data investment from private wealth management institutions. The publisher ended up with a list of 300,000 names, which it pared down to get down to a target list of 100,000.
The 6 package will also feature an experiential component offering unique outings—including a trip to the Macallan Scotch distillery for $75,000 per person.

Publishing Technology

The Back-End of the Web
These days everyone is looking for back-end technology that handles all aspects of the business, from ad insertions to billing, with the look and feel of the most popular social media. If not a one-system-does-all solution, then something pretty close. Enterprise content management has grown to be a big business. In fact, it is now a $4 billion industry overall with more than 95 percent of all industries using some form of it, according to John Newton, chief technology officer for Alfresco Software, a leading open source alternative for enterprise content management, and founder of Documentum.
The industry at large is migrating toward Web-based platforms, either via open-source software or proprietary software that works through a Web browser. “Taking the Web and making it available for back-end functions was a big paradigm shift,” says Mark McCormick, president of The Magazine Manager, a browser-based CRM solution by Mirabel Technologies. “Most publishers had some kind of system, from a Rolodex or spreadsheet to more advanced desktop-based systems. Then it transitioned to Web-based. The benefits are becoming clear and all major software providers are heading to Web-based platforms.”
Publishers are looking for ways to consolidate and supercharge their databases, which can run from five databases up to 50 for a large publisher. The goal is to get everyone on the same page, literally and figuratively, with a relational database that integrates publishers’ entire workflows. Previous desktop systems didn’t allow for sharing and therefore were rife with redundancies of information. The classic example is a sales person interrupting the production staff to check on the status of an ad. But today’s systems work as a kind of broadband technology with applicability up and down the entire value chain of a company. In essence, these streamlined database systems work like a shared drive with more accessibility and much more functionality. The Magazine Manager estimates that it saves the typical client between $25,000 and $30,000 a year.
Tiger Oak Publications, a Minneapolis-based publisher of 16 regional magazine titles and a sizable custom publishing outfit, uses The Magazine Manager from soup to nuts. “A number of our magazines are in remote locations and so it made a lot of sense to have a system that could be accessed over the Web, by sales people and editors,” says CFO Marcel Gyswyt. “We use [The Magazine Manager] to manage all of our ad sales, our prospecting, CRM, setting up our appointments and so forth. From an operational standpoint, we’ve kept the same number of people in accounting, accounts receivable, ad traffic, some production areas and it allows us to be very efficient that way.” He adds that the system also has reduced Tiger Oak’s training expenses. If a new sales person comes aboard, anyone in the organization could help them do an insertion order since everyone knows the system, he says. While Gyswyt couldn’t put an exact dollar on the overall savings derived from the system, he says it’s “significant.”

Dollars and Sense
The new Web-based solutions are a lot easier on publishers’ purses. A system that once cost between $50,000 and $100,000, now may run about $15,000 per year. Alfresco uses java-based open-source software, meaning it can be downloaded from the Web at a fraction of the cost of a proprietary solution. Alfresco charges its customers on a cost-per-unit basis. Newton says that cuts down on hidden costs. “The notion of charging per user means that you may not be able to anticipate the ultimate costs if you don’t know how many users are using the system,” he adds. Another area that can cause cost creep is operating systems. If a solution does not support a publisher’s operating systems and various types of models of developments, there can be a huge cost in compatible technology.
Another benefit of open-source solutions is the collaborative environment of the tech community. Users are constantly trouble-shooting and enhancing, and the results are shared with the community.
The Magazine Manager uses a different approach. The proprietary system is based on Microsoft SQL, one of the most common database programs around. The cost is based on the number of users, or number of seat licenses, and therefore is scalable to the size of the operation. The initial one-time start-up cost could run as low as $1,000. The software is in place so getting started simply requires migrating existing data and some Excel files into the system, McCormick says. There’s minimal initial training to get the client self-sufficient.
After start-up, The Magazine Manager could run as low as $144 per month per user in the system. With 10 users in the system, the cost would grow to about $500 a month and so forth. Systems like these also take away a piece of the IT department’s function, because it backs up data and cuts out some of the soft IT costs. “If every publishing company got a bill for every IT cost and soft cost it would be a huge bill, probably $40,000 to $50,000 for every million dollars of sales,” McCormick adds.

Beyond the Drive
Tiger Oak uses The Magazine Manager for all of its sales features, from setting up the prospects with advertisers down to generating the billings and managing the receivables and cash. When a salesperson puts in an insertion order or contract, it automatically generates a job jacket, which can be trafficked by the traffic person in production, Gyswyt says. Before, that was a separate process. “Even small things like the 90 seconds it takes to set up the job jacket or production folder are now captured electronically,” he adds. “That can save significant money.”
Alfresco works more like a shared drive. A user doesn’t need to load on any software, just put stuff into the s drive and it goes into a repository. But in the background, the Alfresco system is doing intelligent things like extracting information and sending messages that certain documents must be approved. Or it can put a contract in the contracts folder and someone can set up a rule that says all contracts in the folder need approval and a specified manager would receive an e-mail alerting them to their next step. For Web publishing, it converts text in the designated Web site folder into html after approval, so editors no longer have to worry about coding.

Taking a Page from Facebook
The next generation of these solutions will enhance usability with features like drag-and-drop capabilities. The providers are also looking to build their interfaces like iGoogle or Facebook so the Web-based views are relevant to the customers with some of those additional networking tools.
“There’s a perceived increase in efficiency based on how many times an individual has to touch the same document,” says Terry Barbounis, chief technology officer at Alfresco user The Christian Science Monitor. “You may have had the same piece of content go back to the same person multiple times before it went out the door. Now, you can have different editors and different content providers work on different parts in parallel and have it all come together without the content coming back around multiple times.

Systems At-A-Glance
Here’s a quick comparison of the specs and functionalities of two Web-based enterprise content management solutions: The Magazine Manager and Alfresco.
Product: Alfresco

Technology: java-based Open Source

Price*: Typical cost runs about $15,000 per year. Cost is based on CPU (cost per unit)

Functionality: Alfresco works like a shared drive that intelligently categorizes information and assigns tasks, such as sending a message to a manager when a contract needs to be approved. The enterprise-wide system can manage documents, records, Web pages, images and rich media.

Testimonial: “This solution has proven its value over and over again because of the combination of software and Alfresco’s willingness to look at what we’re doing. What’s huge for us is you can have different editors and different content providers work on different parts in parallel and have it all come together without the content coming back around multiple times.” – Terry Barbounis, chief technology officer, The Christian Science Monitor.
Product: The Magazine Manager

Technology: proprietary software based on Microsoft SQL

Price*: Based on cost per user and is a scalable solution. The typical price for one user starts at $144 per month and goes up from there as more users are added.

Functionality: The Web-based magazine management software integrates and streamlines contact management, ad/order entry, production management, and circulation management accessible from anywhere via the Internet. Reports are flexible and tailored to each client’s individual needs.

Testimonial: “It’s very significant and the savings have been significant. It’s allowed us to grow without having to add the overhead.” – Marcel Gyswyt, CFO, Tiger Oak Publications.

*Note: Set-up fees and training may vary.

Reality Check

Are User-Generated Issues Worth It?
For its 10th anniversary issue in June, Budget Travel solicited some 2,800 pitches from readers, using them to generate all of the text and photography to create a 100 percent user-generated issue of the magazine.
The same month, This Old House became the first Time Inc. title to publish a 100 percent user-generated issue, with a “Your Old House” logo overlay on the cover.
BusinessWeek plans to publish a double issue in August filled with user-generated content focused on workplace challenges. Topics include “work-life balance, staying entrepreneurial, toxic bosses, time-management, negotiating bureaucracy, and generational tension.”
While user-generated content gets the buzz online, most editors have largely been reluctant to turn over pages from their shrinking print folios to readers.
And with shrinking—in some cases, frozen—editorial budgets, the idea of employing user-generated content, rather than paying freelancers, is tempting. But if you’re thinking you’ll save money on a user-generated issue, be forewarned: editing users isn’t easy, and may actually cost you more in the long run.
Budget Travel picked up 324 contributors for the issue. A piece called “50 Reasons You Love New York” elicited 500 submissions alone.“Let’s be perfectly clear,” Budget Travel editor Erik Torkells wrote in a recent blog post for FOLIOmag.com. “Making this issue was neither cheap nor easy.”
The magazine paid “normal fees” (about $1 a word) to its contributors, Torkells says, as well as travel expenses for companions—“something we don’t do for professional writers.” (Sending a family of four to Hong Kong, Torkells says, blew out the magazine’s travel budget, no pun intended.)
But without an “extraordinary amount” of “deft editing,” the issue “would’ve been a mess,” he says. “Editing non-professional writers is never easy, especially when you’re asking them to write long.”
Not Cheap
This Old House had a similar experience in producing their user-gen issue. Executive editor Kathryn Keller says the magazine received thousands of e-mails, letters, photos and projects since editor Scott Omelianuk’s first call for submissions in his December editor’s letter.
In addition to the letter, the magazine created a dedicated microsite for readers to upload materials and then called for submissions at the end of magazine stories, in e-mail blasts and during the credits of the This Old House television show.
Although ad pages were up 3 percent over the same issue last year (which was created by the in-house staff), publisher Matt Turck says that the magazine “actually had to invest a little more than usual” to create it, due in part to the costs associated with building and managing the microsite. However, he says, “it was an advertiser success and early signs show a consumer success—we plan to do it again.”

Not New
The concept of a user-generated magazine is not new. In fact, it’s already been done in the travel category. 8020 Publishing’s Everywhere magazine—comprised entirely of user-generated content on travel—was launched in 2007 after 8020’s successful launch JPG, a magazine is comprised entirely of submitted photography.
It’s a nod, Torkells says, to one of the major changes to have affected the travel industry in the past 10 years—namely, that consumers are turning to each other as much as to so-called experts for planning their trips. “You still need editors,” Torkells says of Everywhere, adding that there’s a “broad, service element” to Budget Travel’s issue that Everywhere doesn’t have.
Larger magazines have dabbled in user-gen, too. Wired has experimented with user-generated content in the magazine and on special covers; Dennis Publishing recently announced that its Bizarre magazine in the U.K. would relaunch with a direct focus on user-generated content; and magazines such as Time and Esquire have devoted feedback-style sections to content generated on their Web sites.
Torkells says he plans to do another user-generated Budget Travel issue in 2009. “In the future,” Torkells says, “love it or hate it, an editor’s role will be to lead a conversation, not deliver a monologue.”

Circ Xtra

Working With Online Subscription Agencies
With the Cost of acquiring and re-qualifying subscriptions continually rising, publishers need to generate business from new, reasonably priced sources. Increasingly, that means online subscription agencies. “Online subscription-generation Web sites are absolutely a new source for us,” says Terri Smith, director of circulation at Branch Smith Publishing. “As a colleague mentioned to me not long ago: ‘Why push when you can pull?’”
Branch Smith publishes four b-to-b titles targeting various segments of the horticulture industry. All four magazines are now marketed through two online agencies, both of which are bringing in significant numbers of subscriptions—approaching, in fact, the number generated by the publisher’s own Web site (about 50 per month). Branch Smith’s most popular magazine—Garden Center—receives between 100 and 200 subscriptions each month from online subscription agents. “I have set a cap to keep control of the volume for budgeting purposes,” says Smith.
Branch Smith launched Garden Center on an online agency site in February 2007. Smith scanned the titles offered on various online agency sites and selected one with titles that were complementary to Garden Center but not competitive. “I wanted to make sure that we had the best opportunity for results,” she explains. Then, she worked out the processes with the agency—in particular, the site filters that would pre-qualify the subscribers—and also with her own quality control people to weed out bogus subscriptions that might make it through the filters.
Online Testing
Testing is vital to validate that online subscription agencies will deliver the quality and volume that they claim they’ll provide. Initially, Smith was most concerned about subscriber quality. When subscriptions began to come in, she actually eyeballed the cards and, when something didn’t look quite right, she personally validated company names, phone numbers, and/or addresses online. “I have a responsibility to our advertisers to make sure our readers are qualified,” she explains. Things went well for six months, so she added a second online agency site in August 2007 and is planning on adding a third site soon.
Only about 10 percent of the Branch Smith subscribers from the online agent sources have been bad names. The publisher receives a credit on the invoice for names that are not good.
As with all sources, publishers code the agency-sourced names to track results versus other sources. The monthly invoice credits provide feedback to the agency.

Avoid Paying Too Much
Many agencies don’t require setup or update fees, just a flat fee per qualified subscription. For a small-circulation b-to-b publication, $4 to $6 per new sub is a reasonable ballpark estimate—perhaps $3 for larger volume publications. Requals should be less than $2 per sub. Smith accepted the flat rate offered by her first two agencies. The third one, which she is currently researching, has undercut that price by $1.
The first requals for Garden Center have started to come in and Smith is pleased to say that they are already showing a “spike.” Smith has also checked the bouncebacks and expires for the online agent source over the last year, and the figure of about three percent is in line with the publisher’s other sources.
“These online agent subs are about one-third the cost of a sub that results from our double-postcard mailing,” says Smith. “And I haven’t experienced any bad reader feedback from advertisers wondering where this or that lead came from. I definitely have confidence in this source.”

SIDEBAR
Tips for Working With Online Subscription Agencies
• Pay close attention to quality control. Make sure that the filters you’ve set up verify and that the coding works—and double-check everything.
• Subscribe yourself. Seed the program regularly to make sure that the filters are working properly.
• Understand the credit policies of the online agency and the timing (e.g., 30 days) to report bad names. Don’t pay for subscriber names that you deem to be non-qualified.
• Online agencies generally send files to the publisher once a month but can pull them in a day, if necessary (e.g., during an audit period).
• Make sure the online agency offers different fees for new subscriptions and for requalifications, which should be lower.

Sales

“My Ad Didn’t Work, You Suck”
Second to hearing nothing at all, the last thing you want to hear from your client, as an ad sales person, is something along the line of “my ad didn’t work, you suck.” If you’re hearing this from your customers, then you need a new strategy fast.
At that point, you need to pinpoint what broke down. “Post-launch, if there is a response issue, establish if it is on the customer side or yours,” says Marion Delaney, associate publisher/ad sales director for IEEE Media. “If it’s a performance issue on your end, consider changing the mix, timing, flow or target marketing of the package. If it’s on the customer side, is it due to no ‘call to action?’ The quality of the content? There are so many moving parts to an integrated sale that it just may be the fine tuning that makes it work.”

Building a Package that Works
When putting together a program, “innovative ad executions are key,” says Daniel Morris, general manager of Future US’ PC Gamer and Playstation: The Official Magazine. His company recently sold Burger King and Universal Pictures into an ad program on its recently-launched digital program called Qore, which is distributed on Playstation3. The program integrates high-definition rich-media ads like movie trailers and interstitials into each “episode,” which consists of game previews, demos, strategies and interviews.
“You have to look at every possible way to get the brand in front of the target audience,” says Laurel Didier, vice president and group publisher of Vance Publishing’s Interiors Media group whose products include four Web sites, four tradeshows, three publications, e-databases, lead retrieval, videos and so on. “Today, you just have to help your customers solve their problems. If it has to do with media, we will do it.”
But slapping together a slew of products isn’t the answer either if they’re not the right fit. For example, in a small, niche market or for high-end products, intimate solutions like live events and Webinars often work better than print.
“You really have to build a package with tangible results in mind to have one leg up on the competition,” Didier says. “If you sell custom solutions, they can’t be shopped out. It’s time-consuming and certainly harder for the sales rep but it will ensure return business.”
To encourage her staff to create longer-term, more comprehensive packages, Didier reminds them of the time saved from monthly calling. Also helpful are the compensatory benefits—every product is priced individually, which of course leads to a higher commission. In addition, her group works continuously with a sales trainer, an outside consultant, “to be a little more aggressive, to build programs that are going to deliver results, and also in managing expectations.”

Stopping Trouble Before It Starts
One of the most important things to do before firming up an ad program for launch is to manage clients’ expectations. “Until you know how they measure results, you can’t really deliver,” says Didier.
Her approach is to speak in person or over the phone with the client in order to ask a series of questions and follow-ups. “If someone says they want to see tangible leads, I ask, ‘How do you see those leads? What action needs to be taken?’” Once goals are set, a way for publisher and client to measure the results—whether via tear-out cards, dedicated phone numbers or URLs, research panels, etc.—needs to be established.

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