Magazines have discovered their Web sites build brand and business
When first the Internet dawned over the traditional print landscape, publishers shuddered, gnashed their teeth and decried the medium as a monster. It would eat up advertising, crush the need for print products and put a stranglehold on their business in general.
Slowly but surely the fear and loathing have lifted, replaced by a realization that the Web is a friend, not a foe. Where once they dreaded to tread, publishers now see potential gold mines instead of landmines.
The challenge now is to make the best use of this complementary medium to build the brand and business. To varying degrees, publishers are beginning to discover the strengths of the Web and to experiment with formulas that will help them attract and retain customers, keep costs down and, ultimately, make money.
“Magazines are still in the early stages” of mining the electronic universe, says Greg Zorthinian, a member of the Magazine Publishers of America’s Internet Task Force and senior vice president of Business Week Online. “Some may be adept at selling subscriptions online, while others are beginning to see different opportunities” in everything from e-mail newsletters and branded product sales, to partnering and other affiliations.
At the very least, publications are increasingly using their content-rich electronic counterparts to sell subscriptions and provide a full range of customer service options.
Leading the pack in online subscriptions is Ziff-Davis’ Yahoo! Internet Life. The monthly service and lifestyle guide to the Web, which is raising its rate base to 1 million this September, reaps about 85% to 90% of its new subscriptions electronically. Its Web subscription model offers visitors to the Yahoo! site a free trial issue, along with a letter offering 12 issues for $20. “This is a self-selecting audience,” says YIL publisher Andrew Kramer. “They are already on the Web.”
But you don’t have to be a publication about the Internet to garner respectable results.
Popular Mechanics’ five-year-old “PM Zone” site, for example, introduced its customer care area about 18 months ago, which allows users to subscribe, renew, check account status, send gift subscriptions and change addresses, and also links to sub offers for Hearst Corp.’s 18 other titles. Currently, says PM associate publisher Bill Congdon, the site is generating between 700 and 1,000 PM orders per month. In 1999, 8% of total revenue came from online subscriptions. He estimates that figure will rise to 12% by year end, and reach 15% in 2001.
“One of the great things about the Web is the ability to test,” Congdon enthuses. “In June, we offered a Father’s Day gift subscription on the Web. All we did was run a promotional button on the home page of the PM Zone for five days before the holiday, and we generated 150 gift subscriptions at virtually no acquisition expense.” Using the Web for basic service and circulation functions is “just good business,” he observes. “The last thing you want to do is turn customers off to the site or the magazine. It’s hard to acquire them. Once you do, you want to keep them.”
As part of an overall push to become more interactive, Time Inc.’s Time.com also began a proactive campaign for online subs and customer service about six months ago. (Last fall, Time Inc. dismantled Pathfinder, an umbrella site for all titles, giving control back to the individual magazines.)
Time.com’s customer service area lets users renew and suspend subscriptions, report missing or damaged issues, and obtain reprints and permissions. Time has “worked very hard to create an interface that gives customers control,” notes Kelly Leach, manager of business development and research for Time.com. One feature is that the customer’s transaction is confirmed both via e-mail and in real time on the screen.
The service is promoted “at every opportunity,” Leach remarks, including in a space ad in the publication, through a recording on the toll-free number, and in print invoices and direct mails. Although Leach claims it’s too early to cite figures, she says the numbers “are growing all the time.” She is confident the service fosters retention and new customers, and is a cost-saver. Every transaction, she notes, cuts down on the cost of postage, paper or an 800-number call.
When it comes to contests and sweepstakes, publishers are generally won over. Most view it as a low-cost way to engage and retain existing viewers, as well as to capture new ones and provide added value to marketers.
In November, Menshealth.com will launch the first interactive contest in conjunction with Men’s Health’s Guide to Technology issue. Called Techfinder, the eight-week contest requires visitors to answer a question about advertisers’ products. The visitor clicks on a product icon, which takes them to the product site, where they must ferret out the correct answer. With every click on an icon, the player accrues entries, which become valid once the question is answered. “People love games,” says Tom Bair, associate publisher of Men’s Health. “It helps drive traffic to our site and to manufacturers’ sites.”
Some are moving cautiously, given the ongoing legal battles facing sweepstakes giants American Family Publishers and Publishers Clearing House, which have been sued by attorneys general over their sweepstakes practices. “We don’t want to eliminate the idea,” says Time.com’s Leach, “but given the situation surrounding sweeps, we wanted to watch what’s going on and pursue it at the right time to make sure it’s consistent with what applies offline.”
Though his sites have run a number of contests, Chris Orr, director of Cygnus Business Media’s interactive division, is concerned that if done too frequently, sweeps can cheapen the brand and sidetrack users. “You can generate revenue and drive traffic through contests, but they can create a mentality and expectation of winning if you spend too much time giving things away.”
Publishers see e-newsletters as a key way to communicate and drive traffic to the Web. “E-mail newsletters have a huge value. It’s a mechanism to bring people back to your site,” says Orr. “But not if it’s just advertising and links or vague abstracts.” For example, Firehouse.com, the Web site for Cygnus’ Firehouse magazine, sends out its “NewsDay” e-newsletter to 12,000 subscribers whenever there’s a “significant newsworthy event,” says Orr. It’s also an opportunity to collect e-mail addresses and other demographic info.
For Menshealth.com, its newsletter is an effective way to publicize free premiums and market special offers. Every week, 81,000 subscribers receive e-mail with exclusive commerce links to customer service, subscriptions, branded products and advertiser offers. Ann Marie MacDougall, Internet marketing manager of Men’s Health, recalls one successful offer for a free shirt from Fredrick Menstyle Shirts that generated a 30% clickthrough response.
Men’s Health books, too, have garnered up to 29% response for a $30 book, she says. The worst response was for a last-minute holiday gift subscription offer, which generated a response rate of less than 1%. MacDougall attributes the dismal response to giving an offline method of ordering through an 800 number, in addition to an online venue. “You need to point people in one direction,” she theorizes.
Yahoo! Internet Life produces three newsletters: Y-Life Daily, Y-Life Weekly and Yahoo Internet Music Online. The three-year-old daily and weekly versions reach between 150,000 and 200,000 subscribers. The six-month-old music newsletter goes to about 2,000 subscribers. “We don’t use the newsletters to prospect,” Kramer points out. “We use them to generate interest in the magazine through subscription offerings.”
Publishers are also looking at upgrading their product offerings. PopularMechanics .com is refining and expanding its PM store, which accounted for 3% of total revenues last year, and is projected to hit 10% by the end of 2001.
Last year, advertising accounted for 89% of total online sales. Congdon sees that dropping to 83% this year, and hopes to see it decrease to 75% in 2001, as online subscription and product sales rise. “We want to see a better financial mix,” he remarks. Thus far the store has offered only PM-branded goods such as CD-ROMs, books and videotapes. As of last month, customers were able to order online, using credit cards.
In September, the online store will begin selling a range of other manufacturers’ items. One useful feature, says Congdon, will be a link between a product and editorial that describes or reviews the product.
PM also sees licensed content as a revenue stream. Many industries – such as automotive and home improvement – have sites that are “desperate” for quality content. “We would provide do-it-yourself edit,” Congdon explains. “Right now we’re leveraging content in return for traffic building and promotion. We have buttons and links that drive people to our site.”
Firehouse.com is starting up an “industry exchange” or vertical auction on its two-year-old Firehouse.com site. Essentially, the auction will offer used equipment, liquidation items and collectibles. The company will receive a percentage of each sale.
Time’s e-commerce, says Leach, has been limited to Time-branded products – mainly books – but there are plans to add “contextual merchandising,” whereby the magazine will suggest non-branded reading material at the end of stories in the magazine, and direct readers to, say, Amazon.com or Barnesandnoble.com.
Menshealth.com has done well selling its own books. The bulk of its projected revenues comes from the sale of brand, but making the leap to selling non-brand merchandise, says Leslie Gesser, special projects director of Men’s Health, presents some formidable hurdles.
Spurred on by the success of Stylefinder – an interactive companion to a special Style issue launched in March on the MH site that generated 90,000 unique visits over a three-month period – there was talk of having e-commerce capabilities and sending out merchandise orders to advertisers in order to track purchases. “We had two concerns,” Gesser recalls. “Not being set up for customer service, and we didn’t want to compete with advertisers.”
But the idea is not dead, just “on hold” until 2001, as the logistics are ironed out.
Cygnus’ Orr, similarly, is pondering how to incorporate sales of new and used trucks. “If we took a percentage of the sales, it could be huge,” says Orr. “But there are huge issues. It’s more than just a purchase order. You need fulfillment, distribution channels and customer service.”
If publishers are learning anything, it’s that one size doesn’t fit all in creating a complementary relationship between magazines and their Web sites. “You have to find out what’s right for you,” says Leach.
And success on the Internet is unlikely to come from “revolutionary” technological bells and whistles. What it comes down to is often traditional methodologies. “Sometimes,” says Congdon, “you have to do a basic marketing program.”
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