Improving Your Magazine Publishing Profits

By Cheryl Woodard, Posted March 2002
www.publishingbiz.com

I recently taught a seminar called, How to Squeeze More Profits from Your Web Sites and Print Publications. I asked participants to answer a survey about the worst threats to their publication profits, and the greatest opportunities. About three dozen people completed the survey. I can't repeat all of the topics covered in the session itself (which was three hours long), but here is a report of the survey results. I hope you find it useful.

Nearly everyone who attended the seminar works for a small publication. Seventy five percent of respondents work at magazines with revenues below $10 million, and 65% work at magazines with revenues below $3 million. Their publications are generally niche business, niche consumer, or association publications with only 20 employees or less.

Respondents work mostly on the business side (sales, circulation, finance, operations), although about 25% were editors. I asked people to prioritize a list of profitability threats, and growth opportunities. Looking over the responses, I notice that small publications expressed different priorities than bigger ones. So I tabulated and analyzed the responses by company size. People from both big and small companies complain that they can't generate enough ad revenues. This was by far the most common threat to profits in all cases. But after the ad sales problem, responses varied significantly by company size. Let's look first at the smaller publications.

Small companies need cash, financial information, and skillful managers. Here are the top concerns among smaller publications in order of their priority:

• Can't generate enough ad revenue
• Not enough operating cash
• Not enough good budgeting and financial information
• Production costs are too high
• Managers are distracted by details, have no vision
• Spending too much on circulation marketing
• Team doesn't work together, too much conflict

The top opportunities reported by the smaller publications are:

• Strategic alliances
• Internet
• New circulation strategies
• Conferences, seminars, trade shows
• Strategic planning with our staff
• Books
• Newsletters
• Launching new magazines
• New production technologies

Help for Small Publications

Small organizations often struggle with cash problems, depend on intuitive information to make business decisions, and don't have skilled employees. These publishers need the most outside help, but they're the least able to pay consulting fees. I offer the following suggestions:

Get professional help with your financial information. Ask a publishing CPA firm to do an audit of your records, and help you set up an accounting system that will provide useful information. The audit may turn up ways to save money. And the upgraded information will help you stay on track.

Bring your team together once or twice per year to talk about the business. Bigger companies routinely do strategic planning, and you should try it, too. You'll be amazed at the good ideas people offer if you ask them to participate. My group (and other consultants like me) can run a full-day strategic planning meeting for about $4000, which includes our professional advice about what your strategies should be.

Bid out your key vendor contracts regularly. Technologies have been changing, costs are going down, and if you haven't put your printing up for bid lately, there's a good chance you are paying too much. Fulfillment services are expanding rapidly, too.

Ask vendors for help. Even if you don't bid out the printing, you are free to simply ask your printer, "Is there a different, cheaper way to print this magazine?" Check with every major vendor to see if they can help you lower your costs.

When you need to replace someone, or add new people, always recruit the most experienced person you can find, and then ask the experienced people to help you train everyone else.

Form strategic alliances with companies providing experience or resources you don't have. For example, find someone who is already doing a good job running conferences, and then hire them to run conferences for you instead of starting your own conferences business.

Bigger Companies Need to Grow

• Can't generate enough ad revenue
• Too hard to find and keep loyal readers
• Web site costs more than its worth
• Can't attract and retain skilled employees
• Production costs are too high
• Managers are distracted by details, have no vision
• Spending too much on circulation marketing

The top growth opportunities reported by the bigger publications are:

• Conferences, seminars, and trade shows
• Internet
• New circulation strategies
• Acquiring other businesses
• Books
• Newsletters
• Launching new magazines

Even though bigger companies have access to consultants and experienced professionals, I have some suggestions for them, too.

If you are not already holding regular strategic planning meetings with your staff, you should. This is a great way to capture good ideas and align your team behind a unified agenda.

Encourage individuals to develop their skills by attending Folio conferences, the Stanford Professional Publishing Course, and other training opportunities.

Encourage an entrepreneurial attitude. People will help you grow the business if you give them financial rewards for developing new products or improving on the old ones.

Publishers Offer Suggestions to Each Other

I offered participants the opportunity to share good ideas with each other, and here is a summary of their comments and suggestions.

A money-saving idea: "Instead of paying $25 or more for match prints, we bought a high end color printer and check color prints for $18 each."

Training: several people mentioned the Folio shows and said they are helpful. I can also recommend the Stanford Professional Publishing Course and we list other training opportunities on our Calendar Page: http://www.publishingbiz.com/html/calendar.html Someone else mentioned the EEI classes in Washington DC. but I don't know anything about them. Maybe you can find them on the Web.

Trade associations: Several people said these are helpful, including BMA, and ASME. We link to all the publishing associations from our Links Page: http://www.publishingbiz.com/html/links.html

Vendors: Several people said they've been helped by printers, mail houses and web hosting services who were able to provide training or support for an inexperienced staff. WEGO was one company mentioned by name.

Networking: Several people suggested that former colleagues and coworkers can be very helpful.

Consultants: "We hired consultants and paid $30,000, which was a lot of money, but the new ideas were worth it." "Consultants help us stay current." "We've had successful customized in-house training from editorial, design, and management consultants."

Publications: Folio was mentioned by several people. Also CFO magazine and Circulation Management (CM).

Questions?

These are exciting for most publications, no matter how big or small. But good people are hard to find, print ad revenues are falling, direct mail and circulation strategies are weak, and the Internet demands attention we may not have to give. In hard times, we have to run smarter. That's why I encourage publishers to seek advice and information from everyone. If you are working on a publication and you need specific advice, feel free to email Help@publishingbiz.com. We work with newsletter, magazine, web, and book publishers of every variety. The chances are good that we can help you, too.

Also read my book, Starting and Running a Successful Newsletter or Magazine if you haven't already done so. I update the book every couple of years, always adding new, prectical tips from experienced publishers. You can find the book in libararies or retail bookstores, or order it from Amazon.com.

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