Pruning for Growth

Last year certainly did not end with a whimper. From cost-cutting moves at Time Inc. on down, three words seemed to be apt for the coming year: less is more. Still, while companies have to be quick to cut the fat, they can’t be afraid of growth, something that e-media doesn’t just call for—it demands. Publishing Executive spoke with presidents and CEOs of a handful of leading publishing companies to get a glimpse of what they believe will be most important to the industry this year, how their companies are dealing with the challenges afoot, and why their positions are more demanding than ever.Focused On E-MediaFirst, electronic media was a novelty, then it was supposed to be the “print killer,” and now it’s clear that it’s just one more aspect of successful publishing—though one that can make or break you. “In a lot of ways, we’re still trying to figure out electronic media for our audience,” says Frank Anton, CEO of Hanley Wood. “They now accept e-media as part of our business, but how much business should go from print to online migration still depends on how advertisers feel. I think they’re still a bit undecided. But you can’t wait on them, so we’re hiring more in every area of e-media—from editorial to sales to tech support. You can’t allow your company to be left behind.”Jonathan Simpson-Bint, president of Future US, which produces action sports and video game titles such as Official Xbox Magazine, agrees. His company was really a forerunner in multimedia publishing. “It feels like it’s always been a part of us,” he says, “because our magazine has been coming out with CD-ROMs and DVDs for years. For us, the biggest issue is not a shortage of ideas or content, but a shortage of available workers and time. All of our magazines are in deeply vertical areas, a specialized niche where we need a strong approach to content.” But unlike some companies that look to hire people who can do it all, from write to lay out to sometimes even serve as webmasters, Simpson-Bint believes you have to value each skill individually. “We can always use people with e-media technical skills, but can they write the subject matter? Can they convey it with passion? Those kinds of people are hard to find.”Dave Ramsey, co-owner of Hatton-Brown publishers, which focuses on the forestry industry, says heading up a firm with a smaller e-media budget has meant slower e-media growth: “We have Web sites to try and get readers to buy into our magazines, but we haven’t seen a dime from it,” he says. “We’ve offered online chat rooms and online versions of our publications where we don’t duplicate the stories from print, and we’ll continue to try it. One plus has been verifying our reader base electronically [rather] than through regular mail. Cuts down on verification costs significantly.” Michael Carr, president of Greenspun Media, which publishes Las Vegas Life and several other Las Vegas-related titles, says the data the Web reveals is invaluable. “We definitely know much more about our customers than we did 10 years ago, and I think the same will be true going forward.” The Search Is OnSearch engine optimization (SEO) used to be about casually buying words and a few meta tags. Now it’s a focused passion, even to the point where some companies are employing staff just for this purpose. Says Simpson-Bint: “For our Web sites, [SEO] is vital. We have a huge Web site in the games market called GamesRadar.com, and we spend 60 percent of its marketing budget on search optimization. At the same time, we’re not using that particular technology very much for our print product, at least not effectively—but I don’t know if many are doing well when it comes to that.” Anton has also increased his company’s emphasis on SEO, going from one full-time and one part-time person dedicated to search optimization to as many as five full-time. “We’re no longer just randomly throwing money at the problem,” he says. “You need to specifically go out and hire people with experience in that area. AOL, for example, is laying off a lot of people, so that’s one place where we find talent. You’ve got to design a better site so search engines will find you, and learning to do that effectively is a top priority.” Tad Smith, CEO of Reed Business Information, says publishing companies also need to use search optimization to customize experiences for each user based on their surfing and buying preferences: “It will become an expectation, not just a nice perk.”Going PostalWhile companies look favorably upon the anticipated increase in their e-media presence, the same can’t be said for the increase in postal rates. “The postal hikes have hurt,” says Smith, “but they’re also inevitable. The best way to deal with it is through improved productivity and better pricing. Whether it’s a postage increase or energy costs for mills for paper, you have to plan for them to keep going up.” Simpson-Bint believes one way to deal with it in the coming year is to take a more responsible approach to ratebases. “We need to get away from this wasteful model,” he says. “Ratebase has become about ‘mine’s bigger than yours’ and becomes all about numbers—this is meaningless and just throws away money. How many magazines get sent out to people who don’t request it and don’t know why they’re receiving it? Stop doing that, and already the postage hit isn’t felt as much,” says Simpson-Bint. For Anton, it still all comes back to e-media as a line of defense. “It’s the best form of resistance because then postage or print becomes a non-issue. Of course, e-media has its own costs, but those will go down over time.”Dealing With ChangeObviously, 2007 has its own set of challenges, so that might make you think heading a publishing company isn’t the energizing job it once was. Not so, according to these leaders. “A lot of people think it’s tough in magazines now, but I think it’s exciting to develop brands into multifaceted brand propositions, whether it’s a magazine, an event or a blog,” says Simpson-Bint. “Soon [a] magazine brand will only see 20 percent of its actual business come from the magazine itself, and I don’t think many people could have predicted that.” Nevertheless, Simpson-Bint says managing the process of change is also sometimes his least favorite part of his job. “I’m dealing with the doubts of other people and concerns of shareholders who don’t always understand a long-term strategy.” Ramsey says it’s not quite the job it once was, but still sees the upside: “I’m not Warren Buffett tap-dancing to work every day, but I look forward to it. We have a solid base of loyal employees, many who’ve been working for us for 25 years. The downside is I haven’t seen any great big growth areas since 2000—but we’re staying optimistic.” Eric Butterman is a New York-based writer and creator of the seminar “Better Business Writing: From E-mails To Everything That Makes You Money.” He can be contacted at EricButterman@Yahoo.com.

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Pruning for Growth

Eric Butterman

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