Banking On Newsstands: Bauer’s Counterintuitive Growth Strategy
A Q&A with group publisher Jeff Wellington on how the company connects with consumers at retail "better than anyone in publishing."
The idea of newsstand sales serving as a major revenue source might seem unrealistic to many magazine publishers, but for Jeff Wellington, EVP and group publisher at Bauer Media Group, retail sales are big business.
Woman’s World and First for Women are the two top-selling magazines on the newsstand on an issue-by-issue basis, and the strategy for staying at the top involves an abundance of color and cover lines, as well as limiting ads to appeal to their reader-first model.
In the past year, Wellington has been leveraging the brands’ retail success in order to maximize advertiser revenue, capitalizing on the active engagement that comes with newsstand consumers. Now, the combined titles garnered a 20-percent increase of ad pages YOY in Q1, selling out the available pages this year versus last.
We sat down with Wellington to learn more about Bauer’s strategy for connecting with readers at the newsstand and how that placement influences the brands’ subscription models and advertiser relationships.
Jeff Wellington: Woman’s World is number one overall, and First for Women is number two, issue-by-issue. If you added up the 17 or 18 issues that First for Women has at the beginning of the year, People would probably have more on a yearly basis, but on an issue-by-issue basis, First for Women is number two. It’s also every three weeks, and that’s really confusing, but it’s because we’re a consumer-first model.
I’ve been in publishing for over 31 years and as a publisher for 20 of those years. I’ve worked extensively at all of the publishing companies out there and when I got to Bauer, very quickly I realized that everything here is done very differently, extremely differently.
And there’s something that Bauer does better than anyone in publishing and that is connecting with consumers at retail, and I couldn’t figure out why. Why were we doing it so much better? And I’m not talking about one or two percentage points here. I’m talking about thousands of percentage points. Our two brands, Woman’s World and First for Women, on a yearly basis at newsstand outsold all the titles at Condé Nast and all of the titles at Hearst combined by a lot. That’s a huge statement.
Folio: So how did Bauer achieve this placement as the top two magazines at retail, especially when the competition at the newsstand is very much head-to-head?
Wellington: We embarked on a piece of research to really uncover what we do and what we uncovered is that our brands are literally spreading joy. We put some focus groups together—and, by the way, the study that we did was with 2,000-3,000 women so it was a sizable audience—and happiness emerged as the dominant emotion that women thought our brands made them feel. So that sparked several more questions, like, “What initiates this joy and happiness?” and “What do we do that elicits this happiness in our consumers?” But most importantly: Could we define it?
So we set out on this mission to deconstruct joy and we realized through our findings that color in abundance has a lot to do with joy. We realized that our brands and our titles, more so than any other titles in publishing today, are joyful welcoming signs on the newsstand with these very similar bright, happy, colorful characteristics that elicits emotions with consumers.
Ours is a consumer-first model, meaning the success of our company totally relies on consumer revenue. A consumer taking money out and putting it down on the counter every single day is very different than the majority of everyone else in publishing, where their model or their success as a company relies on advertising revenue. Therein lies a very big difference.
Folio: Where does newsstand revenue fit into the brands’ revenue breakdown?
Wellington: It’s certainly in the top. I’m not at liberty to talk about our internal rates and revenue, but it is at the very top of the list. You can do the math though. Right now, on average Woman’s World sells approximately 32.2 million copies at the newsstand every year. It sells for about $2, you know that’s $64.5 million right there at the newsstand. That’s a good amount of money.
[Editor’s note: First for Women sells approximately 14.7 million copies annually, according to the Alliance for Audited Media, at about $3 per issue, which equals roughly $44.1 million.]
Folio: How do subscriptions play into your print strategy? Are you even trying to convert newsstand purchases to subscriptions?
Wellington: I’ll tell you the truth, one of the things we’re trying to do is grow our subscription and grow our newsstand, and quite frankly grow everything. There is a need for diversity in your consumer marketing of course, so yes, we want to grow that too, but we want to grow it in the right way.
If you look right now at Woman’s World, there are 150,000-200,000 subscriptions [at the end of 2018, the magazine had 198,791 total verified subscriptions, according to the Alliance for Audited Media]. We certainly would like to see that grow if it grows in a profitable way. We don’t have any verified copies or public placed copies, and there are magazines that have 100,000s of those built into their rate base that they just drop into public places across the country and at the end of the day, for us and our model, that doesn’t work. For them, they get to charge advertising revenue for that but for us, it’s not profitable so we don’t do it. They’re free copies that are given out every month and it just doesn’t fit into our business model.
Wellington: I’m sure in the last three months you’ve talked to an editor or a publisher who said they were redesigning and adding more white space and fewer cover lines. You know, is that for the consumer? Or is that for the advertiser?
What we do is for the consumer and, I don’t want to generalize it, but virtually what everyone else does is they’re marketing and designing their magazine for the advertiser. Of course they want their consumers to like it, but it’s really designed for advertisers and it’s a very different dynamic. The reason that they’re doing that is because they might be 95 or 97 or 99 percent subscription based, so at this point, they’re like “No one is going to buy at the newsstand, so why market that?”
I look at a brand like Woman’s World and on any given month, it sells anywhere from 2.6 to 2.7 million copies per month. I’m picking another great title, only because it’s in the competitive set and it’s the biggest one: Better Homes & Gardens. BH&G sells 84,000. That’s a 3,000 percent better performance at the newsstand each month, so our formulas are very different. Most people are pulling away from the newsstand because it’s hard, it’s not easy. It took Bauer 20 years to hone this down to being the best and it shows. Because it’s so challenging, it’s worthy of advertisers to come take a look and see the value that they get that they’re just not getting from other titles with that highly engaged consumer.
Folio: Tell us more about your covers then. What’s the purpose of having that many cover lines?
Wellington: It’s all selected purposefully. If you look at our cover lines and our trim, they’re all designed to do something very specific in that very busy, crowded well-lit retail store. You see in these marketing statistics that marketers are fighting for that and it was reported that the average consumer is bombarded by 5,000 marketing messages per day and of that, maybe 12 break through to make any kind of lasting impression.
Because of that, our cover treatments are designed to do just that. If you’re looking at our magazine, you’ll see across the front, there is a big bar of large letters—”Fastest Keto” and “Fall Just Falls”—that’s our “hero line.” I was talking to [Carol Brooks, editorial director for Woman’s World and First for Women] and she was telling me about why things are the way they are, and she said that those cover lines are actually there for a purpose. They’re designed to be seen in that busy, crowded retail shopping center from 50 yards away at at least a 45-degree angle because we need her to be able to read that as she’s approaching. By the time it takes her to get to the magazine, she really could be off to do something else if she can’t [read it].
Folio: Do you find that your brands ever compete with each other on the newsstand?
Wellington: No, and that’s one of the things we talk about when we talk to advertisers. The duplication between the two is less than 20 percent as a newsstand generated book, because it generates a different audience every issue. Unlike, Family Circle and Better Homes & Gardens, which are both Meredith titles, I’m sure their duplication is probably high because their subscription base is the same.
Both of our titles are in the women’s service category and they serve that women-service content that you would imagine: wellness, food, fashion, travel and beauty. But it’s their DNA that sets them apart. Woman’s World is more emotionally driven and their focus is to make their consumers happy in the heart. First for Women on the other hand is more practical in nature.
Folio: Tell us more about your print advertising strategy. You implied that advertisers are drawn to that strong retail presence, right?
Wellington: Woman’s World only accepts eight ad spots. And the reason for that is because several years ago they tested six, they tested 10, they tested 12 and this is the number that came out to be an ideal number. That’s not necessarily a full page either, so if someone wants a half-page ad, that counts as one of our spots. But I do try to limit fractionals because of that.
When I started here, not realizing this, I said to myself, “Wow only eight ads? I’m going to make it 10 and be up 20 percent in the first year. This is going to be the easiest job I’ve ever had!” So I went to the editor-in-chief [who was Stephanie Saible at the time] and said, ‘Listen, would you consider changing this to 10 ads.” And this is exactly what she said to me: “I will fight you to the death.” She said that she would hear from her consumers because they know the magazine, they know the title and they know this is what works.
And although we don’t limit First for Women, the ad ratio is somewhat limited at 20:80—which, on average, is between 20 and 25 per issue. It’s very different from anybody in the competitive set because at a minimum, if you look at their ad ratio, it’s 50:50 and in some cases the ad-content ratio will even be 52:48. We went the other way and that goes back to our business model of reader-first and that’s why they’re buying us.
This is the model that is sustainable. I hate to even say it out loud but if there weren’t ads in the magazine, I certainly wouldn’t have a job, but the magazine would still be profitable relying on consumers. It’s a model that works.
Folio: How does being retail-based then help your advertisers? What are your advertisers getting out of those relationships with readers who buy one-off copies?
Wellington: MRI starch data shows that virtually every advertiser, or in virtually every category that we looked at, our titles out-performed the competitive titles by a significant margin for engagement because when they go to the newsstand every week and they put down their money, this is more dynamic than when you get it through a sub. Have you ever gotten a subscription to a magazine where you were like, I don’t remember how I subscribed to it?
It’s like when you’re on your way to work and you stop at a store and buy a $5 cup of coffee. More than likely, you’re going to drink that cup of coffee, compared to if you go into your office and go into the kitchen and pour yourself a cup and it goes cold. You’ll probably go into the kitchen, spill it out and start again. That’s kind of the dynamic. [Consumers] engage with it, they read it, and that’s great for us because they keep coming back and buy our magazine week after week, but it really transcends to your advertisers because if I can get a consumer to reach just a little bit more with each advertising page, I’ve done a good job for them. There is a lot to be said for the level of engagement with our readers that our advertisers see.
Folio: Are you selective with your advertisers then? Do they have to align with your brands’ values and mission?
Wellington: In an ideal scenario, yes. But it’s more about helping them connect and providing that service. If asked, we’ll help design an advertorial for them and when we do that, we help them connect to that joy and happiness.
As an example, we have something April 3, Bauer Media’s Inspiring Joy Day, and we have a whole advertising section connected to that to incorporate joy and happiness.There have been a few advertisers who have come to us and asked us our opinion. Creative is an interesting thing—it’s personal and it takes a lot of time. We offer when asked and if you look at some of the highest performing ads that ran in our book in 2018, you can see the majority of them take on the same characteristics that I’m talking about.
Folio: Beyond newsstand, what other growth opportunities are you eyeing?
Wellington: Obviously digital, but looking at our core strengths, our core competencies are connecting with and engaging with women aged 45+. So yes, we are in acquisition mode, we are in expanding mode and we’re looking at anything that connects and engages and fits with women 45+.