Start a Magazine or Internet Publication that Will Last
by Cheryl Woodard, Posted March 2000
From a reader's viewpoint, the relationship with a good magazine
or website is a little like dining at a successful restaurant
chain because you know what to expect each time you visit. If
the experience is a good one, you can repeat it often. Similarly,
magazines and newsletters strive to establish a pleasant, comfortable
relationship with readers based on familiarity. For example,
the "Talk of the Town" section of the New Yorker Magazine
is always located in the same place and written in the same slightly
irreverent tongue-in-cheek style readers have come to expect.
The first step for publishers, then, is to create a bond with
readers, a relationship based on trust and predictability. Once
this essential reader bond is firmly in place, many other profitable
business opportunities become feasible for the publisher smart
enough to efficiently exploit them.
Unfortunately, most new newsletters and magazines perish quickly
because their publishers fail to build a healthy and profitable
reader relationship. Sometimes the expected audience doesn't
exist in the first place. Sometimes it's there, but the publisher
misunderstands its needs or wants. Surprisingly often, the publication
itself is put together poorly. Occasionally, the publisher identifies
a great audience and publishes a dynamite periodical to meet
its needs, but the business is disorganized and inefficient.
In short, establishing and profiting from a strong reader relationship
is a trickier enterprise than most new publishers appreciate.
The secret to launching a publication that will last is to focus
on building long-term relationships with your customers. Think
of each new reader or advertiser as a lifetime contact, not just
a one-time sale. There are six steps to creating a long-lived
business: finding an audience, creating a product, building a
viable publishing operation, converting casual readers into regulars,
establishing advertiser relationships, and finally creating highly
profitable add-on or spin-off products.
Step One: finding the right audience
To find an audience, you have to understand what a group of
potential readers want, figure out how to locate them at a reasonable
cost and determine how much they will pay to get your publication.
Depending on the scope and type of publication, carrying out
these tasks can be quite different. Mass market publications,
for example, must appeal to and locate lots of people ­
as many people as possible. By contrast, niche products need
a much smaller number of customers, but must develop a very loyal
following within their target group.
Most new publications today are designed to address a very targeted
audience, at least in part because it's easier and cheaper to
understand their needs than it is to reach a mass audience. Also,
many niche customers spend more money per capita than the general
reading population, and so they have the potential to support
a much more profitable publishing business. Finally, many advertisers
like to reach readers who match a specific demographic profile
(accountants, librarians or swimmers, for example), so niche
publishers can usually charge higher per reader advertising rates
than can their mass market counterparts. For example, Architectural
Digest has a more affluent audience than Good Housekeeping, so
they charge much more for their ads.
Having identified an audience you understand, and one that can
support your business, you must next figure out how to efficiently
reach it. Traditionally, magazines and newsletters find readers
by using direct mail. Some also put copies onto newsstands or
in other retail outlets. Many are now testing different forms
of electronic distribution, from commercial on-line services
like America Online to the Internet. All of these different circulation
strategies are designed to locate good prospects at an affordable
Step Two: creating a good product that suits your audience
All successful periodical publishers need to know what their
audience wants to read, and how to package it appropriately and
consistently so that readers will keep reading, issue after issue.
Knowing your competition is also essential when you're designing
a new publication. The trick is usually to study your competitors
carefully and then design around them. For example, offer features
that your readers want, but that your competitors have ignored.
As you begin to design your product, you'll probably find yourself
wishing you had endless resources to produce the publication
of your dreams. No question, it's tough to create an appealing
product that you can afford to produce on a regular basis, since
the final package has to meet reader needs and your own bottom
line at the same time. Success will require both a creative hand
(usually the editor's) and a sound business head (commonly the
publisher's) working together.
Step Three: building a viable publishing business
Short-lived relationships are rarely profitable. So even if
a new publisher can find a good audience and create a product
that grabs their attention, there is still a critical problem
to solve: how to build a publishing business that will prosper
well into the future. The trick is to build upon your initial
successes until you have created solid, enduring relationships
within your market.
In the very short term, most publications lose money, especially
in their early years while they are working to find an audience
and win their trust. Their initial losses can range from a few
thousand to many millions of dollars, depending on the kind of
Publishers start to make money only when they begin to transform
their early connections in a market into lasting relationships
by turning casual readers into regular customers, creating predictable
relationships with advertisers, and developing new products that
they can sell to their loyal customers. Along the way, publishers
have to assemble the people, vendors and resources they need
to continually provide top-notched products to their loyal customers.
Step Four: converting casual readers into regular customers
Casual readers include people who buy your publication at a
newsstand or who accept a "come and try it" direct
mail offer. Sometimes casual readers get the publication for
free, at trade shows and other venues. Whether or not they pay
for their copy, publishers rarely profit much from casual readers.
To make a profit, publishers "convert" as many casual
readers as possible into full-fledged subscribers who will pay
a full fare over an extended period. This is doubly true for
publishers of newsletters, who depend almost exclusively on readers
for income. There is a lot of work involved in finding readers
and then converting them into loyal customers. You need a good
marketing plan for subscription sales, and a budget that will
help you understand subscription profits. The essential trick
is to think about readers as lifetime customers and plan ahead
for the relationship that you want to have with them.
Step Five: establishing profitable, long-term relationships
with key advertisers
Advertisers want to reach your readers. That is, once you've
found an audience, you can usually find advertisers eager to
reach the same people. Publishing a magazine or a newsletter
is a little like hosting a business conference. You set the agenda,
create a congenial atmosphere, and invite all the most appropriate
people. If your niche is broad or deep enough, advertisers who
sell relevant products and services want to use your ability
to gather lots of potential customers in one place to their advantage.
In many situations, advertisers add to the publisher's relationship with
readers, just as they are welcome participants at many conferences, since
your readers will be actively shopping for products or services and may
buy your periodical to see the ads.
In other situations, advertisers' presence is more challenging,
and the publisher has to limit or control them to some degree.
For instance, when the readers are young children or people with
serious medical problems, publishers may try to protect readers
from overly aggressive advertising by regulating it. For example,
Sesame Street Magazine, which is written for pre-schoolers excludes
ads. But the magazine is bundled together with another one that
is written for parents, and the parents' magazine is chock full
Occasionally, running ads in a publication would seriously compromise
it or diminish it's very purpose. Consumer Reports offers one
example of an editorial mission that is incompatible with advertising.
It takes a lot of work to win the loyalty of most advertisers.
Enduring advertiser relationships are more profitable for a publisher
than short-lived ones. As with subscriptions, you need a long-range
marketing plan for advertising sales, and a budget that will
help you understand which advertising relationships contribute
to your profits and which ones don't.
Step Six: developing profitable new products and services for your loyal
readers and advertisers
Once your readers are converted into loyal subscribers, and
the advertisers are on board, you can increase your profits by
selling ancillary products or services to the same customers.
It's a similar idea to a popular lunch restaurant adding breakfast
to its menu. Because new products and services should grow out
of the original publishing business, they will usually cost less
to develop and promote, with the result that they have a high
potential to be profitable. Books, trade shows and spin-off publications
are common examples of ancillary products. On-line databases,
compact disks and computer bulletin boards are newer versions
of the same idea &style; delivering your publication's contents,
in a familiar style but a newer form, to a closely overlapping
audience. Look at any well-established magazine or newsletter
and you're likely to find dozens of examples of good products
you can create to cement your reader and advertiser relationships.
Starting and Running A Successful Newsletter or Magazine,
by Cheryl Woodard is available in bookstores or from Amazon.com.
If you are working on a publication and you need specific advice,
feel free to email Help@publishingbiz.com. We work with newsletter,
magazine, and book publishers of every variety. The chances are
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