I wasn’t at the PPA Conference on Wednesday (at my age there’s only so much high-intensity excitement that I can take), so it might be that this description of Future’s T3 site’s ecommerce strategy is incorrect. “Nial Ferguson, group publishing director at Future, says T3 magazine is building an affiliate advertising model to take advantage of its tech-hungry audience’s buying habits.”
This sounds to me like T3 is going to add links off to third-party sites in its reviews of products so after a description of a particular piece of kit, opportunities to buy that product are put in front of the reader, and Future will make a percentage of the sale.
Well, it’s sort of fine in its way and it’s probably better than doing nothing, but if this is the strategy then it leaves quite a lot to be desired. (For one thing, the percentage that Future will make will be tiny – 3% perhaps, may be 5% from a generous seller, and the click-throughs on this sort of activity are pretty puny.)
And it doesn’t solve the biggest problem of traditional publishers, and that’s the competition. I don’t mean T3‘s battle with Stuff, I mean the fact that ecommerce companies are now switched on to content. Publishers have always prided themselves on being in “the content business” and love to shout ”content is king”, as if that in itself means anything, but they’ve never really managed to get content to make money, except as a wrapper for adverts. Publishers ought to be very afraid of ecommerce companies moving into this territory.
Because, let’s face it, you can buy content. That’s what publishers do – we hire writers, photographers, designers and editors and they go off any produce stuff for us. But the barriers to entry aren’t that significant, and there’s a lot of talent out there. Basically, it’s significantly easier for an ecommerce firm - with its bigger budgets, its ready-made audience, its data on its customers – to get good at content than it is for a content firm to gain traction as an ecommerce business. ASOS magazine anyone?
This time though all I’m asking for is a donation of £5. (You can donate here)
Last year many people were very generous and over £1100 was raised, but this year all I want from you is £5 – a fiver, five quid. The price of two cups of milky coffee, or a pint and half of bitter, or a return ticket to East Finchley (I’ve been to East Finchley – I’m doing you a favour by taking your tube fare).
The idea is to get more people to sponsor and to pass the message on. I’d like to get sponsorships from friends of friends of friends and see how far out the ripples stretch.
Of course this might all fall flat on its face and only a puny amount gets raised – but I’d like to see whether this spreads beyond my immediate circle.
So put down your five quid (I’m happy to take cash, so if you bump into me give me your £5 and I’ll pay it in online myself). I’ve paid all the costs of doing the ride so every penny donated goes to the charities.
And tweet, Facebook, email and share this link as far and as wide as you can – and let’s see what happens.
Here’s the link to the donation page – think of it as the new home for that £5 note in your pocket.
An interesting piece by Willard Foxton in the Telegraph about how retailers use loyalty cards – and how they’re much more useful for tracking disloyal customers than rewarding the most loyal.
Foxton has a Starbucks’ example – you’re more likely to receive vouchers offering you freebies if you’re buy there irregularly than you are if you go in every day – but the same is true of most major retailers who run these schemes; the data allow segmentation of customer bases and targeting of promotions. And why bother giving the best deals to people who are going to buy from you anyway?
Subscription marketers have done this sort of thing for years of course. We do ridiculously cheap trial offers to lure in new customers, offer better renewal prices to first-time renewers than we do to our most longstanding subscribers and, if you should allow your subscription to lapse, you’ll get discounted offers galore thrown at you.
And of course it seems to make sense; loyal customers (repeat renewers) will pay more, so why shouldn’t a publisher exploit this fact to raise the subs yield and boost the lifetime value? It subsidises the acquisition efforts and helps attract new subscribers. The subs director’s happy, the finance director’s happy, the new subscriber is happy. The only person being stiffed is the long term subscriber.
This is becoming less and less sustainable. In olden days (say 10 years ago) you could keep the best subs offers more or less hidden – insert cards in newsstand copies only, say, or harsh dedupe rules to make sure your direct mail didn’t go near existing subscribers – but that’s not the case online. If I shop around for the best renewal quote for my house insurance, why wouldn’t I do the same when the magazine subscription renewal arrives in my inbox?
And once I do this there’s a chance you’ll lose me through your direct renewal channel; I’ll see a better deal on your main website, or visit a third party vendor, or go through a cash back site.
Or, because I think you’re ripping me off by trying to charge me a higher price than everyone else, the loyalty I feel to your magazine will disappear and I won’t bother renewing at all.
What are your renewal rates by age of sub? What’s your subs churn? How many ‘new’ subscribers are really existing ones coming through different channels? How have these figures changed over the past few years?
And the most important question: what are you going to do about it?
One of the few areas of publishing that seems to be displaying optimism is the so-called independent magazine sector. These are titles produced with the emphasis on individual design, left-field writing and high production values that are done in small runs, often infrequently and often unprofitably.
Of course some of these ‘independents’ are as slickly professional as the mega-publishing corporations (one thinks of the Church of London for example, who are building a collection of strong brands, or Port magazine with their high-quality quarterly), but all share that independent spirit of making the product as good as it can be and letting the money follow (or hoping it will. Or not giving a damn whether it does or not.)
One of the most passionate advocates of these titles has been Jeremy Leslie and his magCulture blog. Although his site features his selection of great editorial design from wherever it appears – from the obscurest irregular publication to some of the world’s biggest magazine brands – there’s naturally been a focus on the independents as these are often the magazines pushing the boundaries of design and content.
This is also an area that iSUBSCRiBE have been interested in getting into, partly so we can continue our mission to provide the broadest possible range of magazine subscriptions to customers, and partly so we can give a new way to market to publishers who are finding the traditional routes difficult.
So it made sense to get together – which is what we’ve done with the new magCulture shop. Jeremy makes the selection of titles to display and iSUBSCRiBE powers the back end of the site, taking the orders and processing payments.
We’re starting off small, but the intention is to develop this over the next few months, adding more single copies for sale, building up back issues of notable titles, signing up more titles who want to offer subscriptions both to this market and via the main iSUBSCRiBE, WHSmith and other sites that we run.
Go visit the store if you’re after something a little bit different to the usual newsstand fare. And if you’re a publisher that wants your magazine available to more people, drop me a line and I’ll tell you how it all works.
Doing the recent analysis of subscriptions from the ABC report I was a bit puzzled that some very big brands had lost subs over the last year.
It’s easy to see reasons for Reader’s Digest’s losses – this is a business in very major transition after all – but why should Good Housekeeping, Good Food, National Geographic and others all suffer quite big falls? These are titles that have invested heavily in subs over the past few years and are good at getting them, and good at renewing them.
But these are also all titles that have done well from the Tesco Clubcard scheme where you swap your Tesco points for magazine subscriptions. For many people this is almost the equivalent of getting free magazines as the transaction doesn’t involve any actual cash. And the titles were very cheap (e.g. a year of Heat for £30 of vouchers).
Tesco were doing hundreds of thousands of these subs at their peak, but perhaps the fall in the subs of the big brands is a straw in the wind. There are a couple of explanations:
- These subs didn’t generate much revenue for publishers (no one has ever accused Tesco of being generous) and terms were renegotiated (in Tesco’s favour, naturally) a year or so back. It’s also known that renewal rates on these subs are really very, very low. So explanation one is that publishers are weening themselves off what was a very low margin, high volume circulation boost. If yield/cash/profit is more important than ABC, then publishers are taking a short term circulation hit for longer term profits.
- The second explanation is that the Tesco scheme isn’t delivering the volume that it used to, which means that the circulation rug is being pulled from under publishers’ feet.
Any publishers out there who want to give a bit more background?
I’ve spent the last few days cloistered with spreadsheets, digging down into the data of last week’s ABC report. What we’ve been trying to do is pull out information about magazine subs specifically, and that has resulted in our first iSUBSCRiBE Subscriptions Report, which you can download here for free.
The analysis shows that paid subs are an increasingly important part of magazines’ sales and now represent 24.2% of the total of actively purchased magazines. This is up from 23% for the comparable period in 2011 and from around 18% in 2007, and shows that the dependability of subscription sales is helping to offset pressures on the newsstand. Of the 503 titles in the ABC Report (which, of course, includes customer magazines and titles that use a free distribution model), there are 239 whose single copy subs represent more than 25% of their active purchased copies, and 88 titles where subs are more than half. In last year’s return those numbers were 219 and 73, again demonstrating that for many titles, paid subscriptions are becoming a much more significant part of the circulation mix. 15 companies now have over 100,000 subscribers on file, led by Immediate Media with 990,497, Hearst with 815,949 and IPC with 752,892.
136 magazines reported year on year subscription increases, star performers being Focus and Private Eye which each increased subs be over 10,000.
Details of the full contents, and a free download of the whole report, can be found here.
An interesting chat yesterday with a big online retailer who is interested in having a white label site to sell magazine subscriptions. It would open up significant new markets for publishers and the retailer is very keen to add subs to their offering.
But there was one thing that they just couldn’t get their heads round:
“You mean it can take eight weeks for the customer to receive their first magazine?”
- Generally six to eight weeks from ordering, a couple of publishers are pushing ten weeks at the moment because of Christmas.
“Do the publishers keep the customers informed? Do they send out letters to say how long the order will take to be fulfilled.”
- Some do, some don’t. Some say they do, and don’t. Some think they do, but their bureau doesn’t bother.
“Do you tell customers what the order status is?”
- We tell them that a sub can take eight weeks to set up. We’d like to tell them exactly which issue their sub will start with and when they can expect to get the first issue, but we can’t, because we don’t get that information from the publisher.
- I don’t know.
I’ve banged on about this before and I’ll continue to do so, but the way we as an industry treat new customers is lamentable and anachronistic. To survive as an online retailer means delivering beyond the customer’s expectations, not making them fit your outdated pattern of service.
Here you have someone who is so keen on your product that they buy it, and their first experience is a six week wait for the first issue to arrive. Remember: your customers don’t give a stuff about the problems you have with your systems, nor do they care that “this is the way it’s always been”.
The competition you face isn’t (just) from other magazines or other publishers, it’s from iPlayer, YouTube and Angry Birds; it’s competition for a finite amount of customers’ time and a decreasing amount of their disposable income. And you’re losing.
And the levels of service your customers expect aren’t being set by Hearst or Conde Nast, but by Amazon, John Lewis and Next, where you can order today and have it in your hands tomorrow.
The online retailer is going to consult with her bosses and get back to me, but if they go ahead they will want the delivery and communication SLAs that they have with their other suppliers. At present there are no publishers and no bureaus that could come close to meeting those.
That is a terrible indictment of our industry and the levels of service that we think are acceptable. If you want me to solve it for you, give me a call.
Bugger, I’ve done something stupid. Again.
This particular dumbness sees me in a bit of a Twitstorm. Obviously my normal reaction would be to hide under the desk until it goes away, but I thought it might be an interesting case study, so at the risk of throwing petrol on the flames…
Last week I happened to check our Twitter account. I’m not primarily responsible for our social media, but I tweet on the account occasionally and I take an interest in what happens. We get the odd customer service query, one or two a month, so if I see them first I kick them across to the CS team to sort out.
Anyway, last week a tweet popped up: “Don’t buy a magazine subscription through @iSubscribeUK. You won’t receive it!” It seemed to me a rather sweeping attack on our business by someone who identified himself as the email marketing manager for a specific company.
We’re a small team and I care about what we do and how we do it. The tweet seemed to need a response.
And the first response was to find out what the problem was and to resolve it. Which we did; tweets, emails and phone calls went back and forth, and the problem was sorted out. It shouldn’t have happened in the first place, but with 100,000+ orders a year and over 600 individual publishers to deal with, sometimes things don’t go as they should.
The second response was a great deal of irritation. Why should someone make what (I felt) was an unwarranted condemnation of our entire business? So I sent an email to the MD of the company that appeared in the tweeter’s bio:
We’re trying to sort out [name] problem, but I do feel it is rather bad form for someone who is identifying themselves as being from your company to be posting such a sweeping generalisation about our company on a public forum like Twitter: https://twitter.com/dangrech/status/275560529618153472
Was it the right thing to do? Almost certainly not. Should I have done it? Of course not. Would I do it again? I doubt it, but in nearly 30 years of working I’ve done some pretty dumb things and will almost certainly do some equally dumb things in the future. Mea culpa, most definitely. (“My bad” for you youngsters.)
But there is also, I would contend, responsibility on those of us who tweet. One can’t just say whatever one wants without being aware that this can have consequences; one’s quick jibe can have real impact on real people. And if you say you’re from a particular company, then your actions reflect on that company; if someone in my team abused someone else in public I would call them out about it.
In just the same way, of course, as my actions detailed above reflect on the business. I’ve always been a fan of irony.
So again, mea culpa.
I’ll leave our customer service responses to cooler heads than mine in future. In the mean time, I need to find my tin hat and get back under the desk.
At iSUBSCRiBE we spend a lot of money on PPC advertising. Over the years, as publishers have got more adept at using this source themselves, the keywords that we can bid on have been reduced.
Some publishers don’t let us bid on their brand terms at all. The smarter marketers allow us to bid, but set a maximum cpc. This means that they stay number one in the rankings and that their costs are not affected, but they benefit from the extra work and resource we put in. This means that the overall number of subscriptions they generate goes up.
But in over five years, no publisher has ever asked about our affiliate policy. Given that all the big publishers have their own affiliate activity, this is a huge, and potentially hugely costly, omission.
Are we, and other third party sites, driving up the amounts you are paying to affiliates? Are you losing orders that could be coming direct to you?
Get any group of publishers together in a room and you can guarantee that within five minutes they’ll be moaning about their subscription bureau. But as Chris Gadsby said at the iSUBSCRiBE round table last week, it’s probably our fault we have problems.
The subscription bureau’s role is a pretty thankless one. It’s a low margin business that can only make an operating profit by having large volumes go through without much variation. That’s why the bureaus all charge for every little thing out of the ordinary, including – the publishers’ big bugbear – bits of IT development.
Note I said ‘operating profit’. If a bureau needs major investment in its systems then the costs can be immense. And nearly all the major bureaus have done, are doing, or should be doing major system upgrades.
The other major problem they face is over-capacity in the market, which keeps down the rate that any bureau can charge, so their revenue stream is always lower than it needs to be.
And this is where some of the faults of the bureaus can be laid at the door of publishers, because subscription services tend to be bought like a commodity – at the lowest possible cost; we don’t want to pay any more than we can get away with. And we certainly don’t want to fund the long term investment that will be necessary to cope with digital access and bundled subscriptions.
It strikes me that the current situation is unsustainable and one of three things might happen. Read more…