When Rodale created a new role for overseeing sales and consumer marketing, the publisher of health and fitness titles like Men’s Health and Prevention adopted an organizational structure unusual to the industry.
What made the move even more noteworthy was that the executive chosen to lead the new model didn’t have the sales background common to top publishing execs. Gregg Michaelson, who gained the title of president of Integrated Marketing and Sales and CMO last December, started at Rodale in 2001, running its book division before taking on circulation and then the company’s Web sites.
But as Michaelson explained, “While advertising is critical to our success, you have to have an integration between the two. Publishing companies are now realizing [that] a strong consumer base can drive revenue.”
The changes didn’t end there. It used to be the goal for Rodale’s publishers to hit an ad revenue target. Michaelson said he realized ad and circ people can sometimes work at cross-purposes—even at a company like Rodale that gets fully half its revenue from consumers, above the industry average.
He changed that, giving publishers full P&L responsibility with oversight for their title’s circulation directors. The idea was to get publishers and circulators working together to find subscribers who would be likely to spend a lot of money on Rodale’s products long term, while keeping an eye on costs.
“Before, publishers just worked on advertising margin, and the circ team worked on circ margin,” he said. “While they should not work against each other, sometimes they would.”
For instance, the publisher might have wanted the title to reach younger readers, but circulation had difficulty doing so within its financial parameters. “Now, there’s one P&L under me, and if it means we have to invest more in a younger file, we would do it,” he said.
Rodale’s strategy isn’t only to charge the highest price possible for its magazines but also to sell subscribers multiple products from its array of health and fitness offerings, like books, workout videos and iPad apps. In so doing, the company gets what it calls highly engaged consumers it believes advertisers want to be associated with.
“We know the stronger the consumer, the better off we are with advertisers as well,” he said. “If a consumer group is engaged, I’d want my brand associated with it.”