Has Covid-19 Infected Your Business?
Posted on Wednesday, April 29, 2020 at 11:21 PM
Our business environment is changing. Some publishers are coping
better than others.
By William Dunkerley
"Covid-19
Represents the Biggest Challenge to Media Advertising Expenditures Ever"
is the headline of an April 27 Forbes magazine article.
The
article explains: "Advertising expenditures are being canceled, delayed,
and in some limited cases increased, all in reaction to Covid-19 and the
stay-at-home orders issued across most of the nation."
Prospects
on the subscription side of our businesses may be different, however.
Magazine publishing giant Meredith points out: "Given recent lifestyle
changes, our content is particularly relevant now as more Americans are
spending time at home and are demonstrating expanded interest in DIY,
food and entertainment, as well as local news programming." The company
is silent, however, about whatever financial benefits it may have reaped
from those lifestyle changes.
But Meredith goes on: "At the same
time, the Covid-19 crisis has created an extremely challenging business
environment, including significant advertising campaign cancellations
and delays. While our financial position is strong, given the impact on
advertising -- which represents approximately half of our revenue mix --
we are proactively taking aggressive actions to strengthen our liquidity
and enhance our financial flexibility in the near-term to effectively
navigate the current environment.
"Those actions include pausing
the company's common stock dividends, reductions in board of director
fees and officer, executive and exempt employee salaries; and even
tighter control over production costs and variable expenses."
According
to ChiefMarketer.com, "Marketers are managing their expenses in this new
coronavirus-impacted economy, and that has translated to a decline in
advertising spend. The Interactive Advertising Bureau recently reported
that 24 percent of brands paused their advertising spend for the first
and second quarters of this year, and 46 percent are at least adjusting
it. Overall, digital ad spend is down 33 percent and traditional media
is down 39 percent."
A survey conducted by our sister
publication, Editors Only, shows that the impact on advertising
sales is highly dependent upon specific markets and also upon the
resourcefulness of the respective publications.
A Tale of Two
Magazines
With due respect to Dickens, the Covid-19 crisis
won't allow us to say that "it was the best of times, it was the worst
of times...." But we can contrast the reactions of two different
magazine publishers as the best of responses and the worst of responses.
The
prize for the best of responses goes to Scrap magazine, published
by the Institute of Scrap Recycling Industries. The association was
about to hold its annual convention and exposition, typically a
highlight of the year. The editors had put together a special issue, 50
percent larger than a regular one. Substantial content pertained to the
upcoming event. The advertising department had been hard at work, too.
They brought in a good collection of ads, some timed to coincide with
the upcoming event.
Then crisis hit. The association saw no
alternative but to cancel the event in light of the Covid-19 pandemic.
That
threw the magazine staff into crisis management mode. The editors
removed from the upcoming issue all the convention-related content. Many
of the ads had to go, too. The editors rewrote and re-edited whatever
content was left that made reference to the convention. They added new
content about the coronavirus and described resources the association
would provide members to help them address the crisis.
In the
end, the magazine staff produced a smaller issue, one with less
advertising. That loss was mitigated, however, because the magazine will
save money on printing and distribution.
That's one impressive
effort in crisis management at deadline, I think.
In contrast, I
offer the response of AAA World, published by the well-known
automobile association. Its May–June issue is a theme issue on the topic
of road trips.
Members received the issue at a time when in many,
if not most, places nonessential travel was banned. Of course, it was
reasonable to presume that the travel bans would be lifted at some
point. But that would still leave travelers with a host of Covid-related
precautions they would have to contend with on any trip. The road trip
issue could have given prospective travelers some very useful advice in
that regard.
But AAA World missed that opportunity to be
helpful to readers.
Advertisers were disserved, too. They lost
the opportunity to tell readers that their facilities and events would
be compliant with required safety precautions, or to remove their ads if
they weren't.
Instead, a message from the editor appears next to
the table of contents. It says, "As we went to press, AAA members across
the US were being told to stay home."
The message explains,
"We made the decision to proceed with printing our planned road-trip
issue with the vague hope that we might be able to travel by the time
the magazine reaches your homes and the certain hope that in the
not-too-distant future, we will all be packing up the family car and
hitting the road."
I'm sure we all share that hope for the
undefined "not-to-distant future." But practically no one could
reasonably share the hope for that to be realized in mid-April when AAA
World arrived in the hands of its readers.
In this case the
publishers didn't even make an attempt at productive crisis management.
They just printed a non-sequiturial excuse for doing nothing.
Turning
Lemons into Lemonade
In future issues, STRAT will
discuss new strategies that magazine publishers can use to cope with the
still unfolding crisis and to prepare for life in its aftermath. Believe
it or not, we can reasonably expect to see new opportunities on the
horizon. We'll help you to identify them and exploit them to your
advantage.
William Dunkerley is principal of William Dunkerley
Publishing Consultants, www.publishinghelp.com.
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