What Are They Doing Right?

We’re at the midpoint of 2008, and thus far, it’s been a tumultuous year for many publishers. Many, but not all. Publishing Executive spoke with the leaders of five publishing properties about the mounting challenges posed by the rising costs of paper and postage, and the prospects of recasting their organizations as players in the ever-evolving e-media environment. All five of these organizations, as it turns out, are prospering in spite of the challenges. In fact, several of them are significantly growing their businesses—and, in doing so, are bucking what many would consider the conventional wisdom of “riding out” these difficult times by instead investing heavily in staffing, technology, editorial products and other assets.TIM ANDREWS, President and CEO, Advertising Specialty InstituteThe Advertising Specialty Institute (ASI) has served the advertising specialty and promotional products industry for more than 50 years. Headquartered in Trevose, Pa., ASI publishes print and online business magazines, product catalogs, Web sites and informational directories. Tim Andrews joined ASI in 2003 after serving as CEO of Primedia Business Magazines, the second-largest magazine publisher in the United States at the time.JASON BINN, Founder and CEO, Niche MediaNew York-based Niche Media was founded by Jason Binn in 1998 and now is a subsidiary of Greenspun Media Group. The company publishes nearly 20 luxury city/regional magazines for high-wealth, controlled-circulation audiences, including Aspen Peak, Gotham, Hamptons and Los Angeles Confidential. The company recently relaunched Trump and Philadelphia Style and will be launching Michigan Avenue in September.KERRY GUMAS, President and CEO, Questex Media GroupQuestex Media Group, located in Newton, Mass., was founded in 2005 when Advanstar Communications sold off dozens of its business-to-business magazines, Web sites and conferences. Today, Questex publishes more than 100 print and digital publications and hosts nearly 50 conferences, trade shows and events each year. Gumas has more than 28 years of b-to-b media experience. He joined Questex in 2005 after leading Advanstar’s Technology Group.CHRISTOPHER KIMBALL, Founder and Editor, Cook’s Illustrated and Cook’s CountryCook’s Illustrated and Cook’s Country are published by Boston Common Press and were founded by Christopher Kimball. Kimball serves as publisher and editor, and has led Cook’s Illustrated to significant increases in both print subscribers (up from 600,000 in 2004 to 1 million in 2007) and paid online subscribers (more than 200,000). He launched Cook’s Country in 2004. Kimball also hosts the syndicated PBS cooking show “America’s Test Kitchen.”WILL SCHENCK, Publisher, Men’s JournalMen’s Journal, a men’s lifestyle magazine published by Wenner Media and focused on outdoor recreation, saw a 21-percent increase in ad pages in the first quarter of 2008 over the same period last year. Headquartered in New York, the magazine was founded by Jann Wenner in 1992.What are your organization’s top priorities in 2008?Tim Andrews: Our first priority for 2008 is to continue to do what we’ve been doing. Our readers are distributors [resellers] of promotional products—think logoed mugs, hats, pens, floor mats, any of 750,000 products that can be imprinted with a logo—and our advertisers are the suppliers [manufacturers]. We have set records in 2007 and so far in 2008 in the number of distributors and suppliers [who are members of] the ASI [Advertising Specialty Institute] Network. In our industry, ASI is the No. 1 player in print, online and in live events. For 2008, we are exploring additional live events, possibly ones themed around a specific selling season or product category, [and] the second year of a “power summit” for the most influential 200 people in the industry.In addition, we’re extending our print brands beyond traditional online and e-newsletter offerings into ASI TV, which [features] several video segments per week [on ASICentral.com], and plan to launch ASI Radio [on the Web site] with a 30-minute morning talk show format. Finally, industry education is a priority. We traditionally have conducted full-day educational sessions at each of our five ASI shows [in Orlando, Dallas, Las Vegas, Chicago and New York]. This fall, we’ll have substantial educational content offerings available online, so ASI customers can learn anytime, from anywhere.Jason Binn: We’ve been launching a magazine now pretty much every year for the last 15 years. Our goal is to constantly expand our network to complement what we do. We don’t challenge our advertisers or challenge our business model; we complement it. So we want to go into more major cities and resort communities like we’ve done to expand our network.Kerry Gumas: We are focused on continuing our strategy of growing the company by delivering a fully integrated media and information model to our markets [that incorporates] print, digital, events, research/data, custom content, learning and training. We’ve just come off a record year both in terms of our core business and the eight acquisitions we completed. This year, we are focused on extending and improving those gains with additional top-line growth from our event and digital media businesses, in particular, and a strong focus on profitability. Christopher Kimball: I think what’s happened in magazine publishing in the last five or 10 years is sort of like when VCRs came around back in 1980. Everyone was concerned it was going to eat into [box office] ticket sales. … And it turns out it was just another revenue source. And now, for some movies, DVDs are 40 percent of their revenue.So in our business [cooking], I think what has happened is all these revenue streams have shown up, whether it’s paid, online access, whether it’s different ways of taking recipes and reorganizing them for people, pre-rolls and video content, etc. … We’ve found that every year there’s another line extension in terms of how to present your content to the public. So our first priority is to think through that and consider all the other ways we can [make money] off this.Will Schenck: … We are going to continue to explore ways in which we can realize the full potential of the Men’s Journal reader’s lifestyle. … What we’re trying to do from a business perspective is realize all of the opportunities there. We’re the one magazine in the men’s competitive arena in which you will see backpacks and flashlights and Cartier watches and Porsches. There’s no other magazine that has the breadth of categories that we have. … Whether it’s developing new digital initiatives, TV initiatives, event sponsorships … they’re all intended to realize the full scope of our business.The other answer, which is more of a conceptual answer, is that we are a sales organization. We sell something, much as all of our customers sell something. And so a big part of our effort right now is going into the marketplace and speaking to our clients about what their problems are to try to solve those problems. And not just because they have a [marketing] budget. … A lot of our customers are going through tough times, and I think it’s implicit upon us to not be fair-weather friends. …Where are you getting the most “bang for your buck” in reducing your cost structure, in a time when traditional costs like paper and postage are posing huge challenges for publishers? Andrews: We’re certainly being more careful all around—tighter circulation, making sure every copy is delivered to a qualified reader; closer management of the ad-edit ratio and folio; and using innovative mailing approaches to minimize costs.But we are continuing to invest in differentiated editorial content—content that matters and that helps readers make more money by being better informed, earlier. While many publishers are shifting to lower-cost forms of editorial, we’re spending more this year than we did last year, and more last year than we did the year before. Our editorial costs are up 30 percent from five years ago, and it’s helping us generate revenue and reader commitment.Binn: I think you’re always looking at your expenses and always trying to be responsible. But on the other hand, we’re a thriving company [that is] moving into a 60,000-foot facility in the next few months. We’ve recently launched in Philadelphia [Philadelphia Style], and we’re launching in Chicago—Michigan Avenue magazine—in September. There are businesses whose growth is slowing, and there are business that are growing fast, and that’s the kind of business we are. We’re actually putting more money into our business to expand it. And we haven’t compromised the product at all [by deciding to trim folio size or cut paper weight].Gumas: We continue to [improve] in the economics of print publishing from a strong focus on production and distribution efficiencies. We are achieving savings from better print and paper buying, co-palletization, very close management of ad/edit ratios, folios, paper grades and sizes across all of our properties. We have also re-engineered our circulation management with a much stronger online focus to boost performance and lower cost in that area. That said, many of the savings we are achieving from these initiatives are being used to expand and improve our content, and develop digital media applications to deliver it to our audience.Kimball: We’ve actually been hiring and growing as a company. [Rising costs] are a problem, but we have not cut paper weight or quality. We’ve worked very hard on distribution, so that both in our direct-mail marketing and with our magazines, we’re maximizing that part. It’s almost today that it’s not a printer that has mailing facilities, it’s a mailer that has printing facilities. So the whole back end of the business is becoming increasingly important with the postal rates.We’ve spent a tremendous amount of time working with different companies to get more inline services and combining different ZIP-code runs, making us more efficient …. So I think it’s the back end of the business where we’ve really focused, rather than just worrying about paper weight. Schenck: We made a decision not too long ago to reduce the trim size of our magazine, and take the cost savings from that and invest it in the magazine by increasing the paper quality and the number of editorial pages. We tipped the mix more toward editorial with these cost savings. We used to be an oversized magazine and, frankly, it was sort of an inconvenient thing for us. From a postage and a newsstand-placement standpoint, it didn’t help our circulation.Our circulation is actually up now, I think in part because of that investment in the magazine. We’re in a position where we were thinking far enough ahead that when the difficult times came, we had already made the appropriate provisions.How are you re-casting your organization to be a player in the new e-media environment? Andrews: In just four years, our revenue has shifted from 65-percent print (magazines, directories, books, print reference materials) to 35-percent print. We’ve aggressively moved delivery to digital channels from print, but kept print where the usability and portability make sense. Basically, we’ve looked at every product we offer and asked, “Would this be better online, or in video, or in audio, or in person?” If the answer is yes to any of those, we’ve made the move.Binn: We are, like every magazine company, looking at creative ways to build our Web presence. I think magazines are still—as much as we realize the importance of [having an online strategy]—trying to figure out ways to be successful financially [online], because there are hard costs that are involved. So right now, most of what we’re working on is in developmental stages.Gumas: Digital media is our fastest growing business line at over 40 percent last year. All of our groups have significant ongoing digital media initiatives, as this is a major pillar of our overall integrated media and information strategy.Kimball: It used to be 10 years ago [that] when you had a magazine, you’d have subscription sales, advertising sales and newsstand sales. And you’d sell a few hats and books. But today, if you looked at our business, there probably would be 15 different income sources. The book business has changed, the magazine business has changed, the online business has shown up, and every year there’s one or two more lines [that present] opportunities if you take advantage of them. So we are constantly evaluating how best to leverage all of these opportunities.Can you share any success stories of how you’ve generated new streams of revenue with your online/e-media efforts?Andrews: [First,] our advertisers, generally suppliers of imprinted products, started to use e-mail as an effective way to market their products—new products, sale items and the like. But there are 3,600 suppliers and each potentially managing their own database of names. And there are 23,000 distributor firms in North America, so that’s quite a challenge. So we launched ASI Email Express—an HTML e-mail delivery service that allows suppliers to send their messages conveniently to our list of 70,000 distributor e-mails, and we handle all of the opt-outs, updating and other headaches.[Second,] we have five major trade shows every year, with total attendance at those five events totaling about 20,000 people. But there are at least 130,000 buyers in our industry—the sales force of the distributor firms in our network—and so there’s still [100,000+] people who aren’t at one of our shows. To help those … people see what’s happening at the shows, we launched ASI TV and feature dozens of videos throughout the year with interviews of top suppliers talking about their new products, new shows with our editorial team talking about innovative products they’ve spotted on the show floor, and then sponsored videos with content that is completely the responsibility of suppliers, but we’re paid to create the video, host it and promote it.Many of the videos are getting hundreds or thousands of views, and we’re excited about the long-term value this video vault creates for ASI TV and for other ASI products that might incorporate these videos in the future.Gumas: We have a very successful e-learning resource that we deliver to the travel-agent community through a multimedia learning portal called Travel Agent University. Over 40,000 travel agents register and complete courses on specific destinations annually, and this has been a source of tremendous interest both to agents and suppliers. Another great example of our success is a custom-publishing and content-distribution portal for the office-dealer market called Evolved Office. This allows registered office dealers to create and distribute their own branded e-newsletters to their customer base and prospects using our content in a convenient application environment. Kimball: The Cook’s Illust ated Web site has well over 200,000 paid members. That’s a huge business for us. We grow [the business] about 30 to 35 percent a year.Schenck: We measure all of our programs, and we think that’s one thing that the Internet is great for—providing metrics for success. One of our best recent campaigns was the Jeep Hookup, which was a program where people formed tribes, competed in various activities and won various prizes. It was very viral … and ended up being massively successful, and Jeep really loved it.

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What Are They Doing Right?

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