An Ounce of Prevention: Why a Major Magazine Will Stop Selling Ads

Heresy! There was much scratching and shaking of heads in Magazine Land last week at Rodale’s announcement that Prevention magazine would no longer carry ads. “Why are they walking away from all that revenue?” was the typical response among fellow publishers. Rodale didn’t really explain the change, only stating that it will coincide with the launch of “a bold new editorial vision for the world’s most established and original healthy lifestyle brand.” But the company left a trail of clues about the change in Prevention’s strategy. Publishers, pay attention, because Rodale may be on to something. The conventional wisdom in magazine publishing says that, even at heavily discounted rates, ad pages are profitable. But publishing ads can increase magazines’ costs in many ways beyond the relatively small expense of printing more pages. Consider that Prevention’s U.S. circulation was nearly 3 million in 2012. Prevention is a fine magazine, but there’s no way that its “natural audience” -- the number of people actually willing to let go of a few bucks to receive a copy -- is anywhere close to 3 million. Such a high circulation numbers smells like something created in the glory days of magazines, when a flood of advertising money could cover all manner of expensive circulation-boosting schemes like cheap subscriptions, negative-remit subscriptions (where subscription agents get commissions that exceed 100%), direct-mail campaigns, newsstand promotions, giveaways, etc. But there’s hell to pay when the ad money dries up. Rodale clearly has been trying to right-size Prevention’s circulation for a while, nearly halving its ratebase (circulation guarantee to advertisers) in the past three years, from 2.8 million to 1.5 million. (As explained in “Why Has Magazine Circulation Declined? Blame Advertising,” such precipitous circulation decreases occur when publishers jettison unprofitable circulation. But it’s hard to go back to your advertisers year after year to explain the declining circulation. If you tell the truth -- “We’re getting rid of junk circulation to focus on the most engaged readers” -- the advertisers will ask, “How much of the circulation that we paid for last year was junk?” It’s probably especially difficult for Rodale when it’s talking to many of those same advertisers about its hot titles like Men’s Health and Rodale’s Organic Life. In its announcement, Rodale also said it will hike Prevention’s cover price from $3.95 to $4.95 and increase subscription rates as well. Such price increases are easier to pull off when you’re only focused on whether each copy sold is profitable and not on meeting a circulation guarantee regardless of the cost. [caption id="attachment_16658" align="alignright" width="250"] Maria Rodale, CEO, Rodale Inc. Photo Credit: Cedric Angeles[/caption] Without referring specifically to Prevention, Maria Rodale, the company’s CEO, made two comments last week that seem to explain the philosophy behind the magazine’s new stripped-down business model. In a sort of manifesto published by Inc. magazine, she bemoaned the “free content-driven business model” that has taken over the publishing business. “When the ‘free for all’ hangover is waning and we wake up and ask ourselves where do we go from here? -- the answer lies in having to value ourselves and our work. We need to provide solutions and answer needs that people have -- modern real people -- whether it's the need to be in the know, the need to escape, or the need to figure out how to live a healthier, happier life. And then we need to have the courage to charge for it.” The other comment was made in front of the American Magazine Media Conference, where Ms. Rodale lamented that "Facebook now owns our customer. Amazon owns our customer. Google owns our customer. And that's what we have to get back, is that ownership of that customer so that we can sell them all of the other things that are part of our portfolios." Decades before magazines became “magazine media,” Rodale invested heavily in building a multimedia portfolio of “other things” it sold to its fans. Rodale’s savvy direct-mail marketing, for example, enabled it to create a major book-publishing operation. (Aside: The hot topic in book publishing these days is “D2C” -- selling books directly to actual consumers rather than the traditional practice of selling just to retailers. Rodale is one of the industry’s poster children for successful B2C selling.) A recent Prevention-branded bookazine (it publishes more than 20 annually) provides a peak at the magazine’s future: It has no paid ads but devotes more than six pages of prime real estate to promotions for Rodale products -- a book, event, DVD, online course, e-commerce site, and magazine subscriptions. But here’s a prediction, sort of: Don’t be surprised if, a few years from now, you see paid ads start creeping back into Prevention. The ads, however, will be carefully screened (no more come-ons like “Eliminate Belly Fat with Vinegar!”), will compete for space with Rodale’s own promotions, and will be distributed to no more than 1 million people.

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An Ounce of Prevention: Why a Major Magazine Will Stop Selling Ads

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