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Issue for July 2020

Hearst Staff Unionizes

Posted on Friday, July 31, 2020 at 3:49 AM

In the news: Staffers throughout the Hearst organization have voted, by a landslide, to unionize.

This week, Hearst staffers voted to unionize. Kerry Flynn of CNN Business reports that the motion won handily in a 241-83 vote. Flynn writes: “Hearst Magazines’ union drive was a massive effort, encompassing 28 digital and print brands, including Cosmopolitan, Delish and Esquire, and it has about 500 members. It's one of the largest unions in the media industry.”

The move comes at a critical time for Hearst, just one week after magazine division president Troy Young resigned after the New York Times reported on his alleged bullying and sexual harassment of colleagues. Read more here.

Also Notable

Programmatic Revenues on the Rise

The Covid-19 pandemic is creating turmoil across the publishing industry, but the news isn’t all bleak. Max Willens of Digiday.com reports that programmatic revenues have increased for some publishers. For instance, he writes, “through the first 23 days of July, Salon’s programmatic revenues are up 25% year over year over the same period,” according to Salon’s chief revenue officer. But publishers should remain cautious because “the recent good times may not last forever: some of the spending is coming in from sources such as NBC Universal ... and sell-side sources worry that lawmakers’ failure to approve a new economic relief package to replace the one that expired this week could undo a lot of the progress the economy has made.” Read the full article here.

O Print Magazine’s Uncertain Future

This week, there were reports that Hearst would shutter O magazine’s print edition at the end of the year. But Jonathan Berr of Forbes.com is now reporting that this isn’t entirely the case: “According to the title’s publisher Hearst Magazines, O's 'print expression' will continue although the company is 'evaluating what that will look like beyond the December 2020 issue.'” Some are speculating that the print edition will go quarterly, but nothing concrete has been announced. The move comes with reports that although the print magazine had as many as two million readers, the O website attracts upwards of 8 million readers per month -- a number that has climbed steeply this year. Read more here.

Print Declining at Hearst

O magazine isn’t the only title at Hearst whose print identity is changing. Kathryn Hopkins of WWD.com discusses how other Hearst magazines -- including Harper’s Bazaar, Good Housekeeping, and Women’s Health are printing fewer issues -- given significant ad declines during the Covid-19 era. Read more here.

Magazine Newsletter Strategies

“‘The inbox is the new doorstep,’” says New Yorker newsletter editor Jessie Li in a recent Foliomag.com piece. Some magazines are trying to capitalize on this concept, says Greg Dool of Folio:. “Offering publishers direct relationships with their readers, on their own terms, email newsletters remain as vital as ever in the platform age,” he says. “Publishers are increasingly viewing email as more than just an engine for driving traffic to their sites.” Some are doing headline-and-summary newsletters, while others are experimenting with narrative formats. Read more here.

Global Decline in 2020 Ad Revenues

The advertising picture is pretty bleak for the rest of the year. This week, Mike Vorhaus of Forbes.com reported on the worldwide slide in advertising since the Covid-19 pandemic hit earlier this year. Citing numbers from a recent Zenith report, he says that “total global advertising expenditures will decline just over 9% for all of 2020. In the U.S. they see the 2020 decline as being down 7%.” However, those losses will be offset somewhat in 2021 by the rescheduled Tokyo Olympics, he says. Read the full article here.

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Five Internal Obstacles to Covid-Slump Recovery

Posted on Friday, July 31, 2020 at 3:48 AM

Are you steering your publication toward post-Covid success, or are you standing in your own way?

By William Dunkerley

Today's pandemic has hit different magazines to different degrees. Some publications have actually done well in holding their own. They are the lucky ones. Typically they serve a market segment that doesn't involve people congregating.

Other publishers may be feeling that their luck has run out. Some have seen drops in ad revenue of 70 percent or more. At the same time, magazines that enjoy audience revenue may have seen some increases there. It seems that homebound people have turned to reading more.

Prospects for Ad Revenue Recovery?

When will ad revenue return to normal? There is no pat answer. The cold hard fact is that it may not be in time to rescue your publication. Recovery times will vary depending on which segment of the economy your publication serves.

McKinsey Global Institute and Oxford Economics produced a model that shows how various industries are expected to recover. It addresses the respective contributions to GDP, not ad spending. But it does give clues that can inform the expectations of publishers in the corresponding industries. Here's a graphic presentation of the results:


Estimated times for contribution to GDP to rebound to 2019 levels, shown by industry.

The white circles show the point of return to 2019 levels of contribution to GDP given a virus-contained scenario. The black circles show haw far the rebound may take in a muted-recovery scenario.

Consider this as one input as you gauge expectations for recovery in your ad market. The graph hints at external obstacles you may face, but there are internal obstacles as well.

The Five Internal Obstacles

1. The Death Spiral. Group M concisely articulated this one. It focused on print media, including publications with associated digital content. Here's the scenario: "Print publications in most markets are likely to go through a vicious cycle of [1] disinvestment in content due to an absence of advertiser support that [2] will then lead to disengaged consumers and advertisers who are, in turn, [3] further disengaged themselves." That's a pretty bleak and dangerous series of events. We concur that this scenario may very well be the fate of some publications.

2. The Broken-Down Business Model. The business plans of some magazines are just not geared toward doing business effectively. Presenting advertisers with an audience poised to buy is a key business objective for any magazine that depends on ad revenue. All too often, though, magazines are doing a poor job at that. There is a mismatch between the sellers and the buyers; audiences have not been developed with sufficient emphasis on finding buyers for the advertisers. In good economic conditions this mismatch may not be a paramount problem -- magazines can skate by doing an inefficient job. But when an economic downturn occurs, these magazines find themselves in trouble. Advertisers seeing weak results from their advertising drop books that are poor performers.

3. The Inadequate Prospect List. Many magazine ad sales efforts are almost entirely focused on servicing existing accounts. That may be an adequate approach when times are good, but it leaves you with nowhere to go when those accounts start cutting back or canceling schedules. How up to date is your prospect list? Indeed, do you even have one worth mentioning? A good prospect list is one that is constantly being added to and constantly worked for picking up new accounts. A deficient prospect list can be a killer in times like these.

4. The Sales Force Stuck in a Rut. Magazines that live by servicing existing accounts tend to have salespeople that spend their time working those accounts. Some of them are little more than order takers. They may not be up to the challenge of aggressive selling. Indeed, they may lack the skills for that. They are in a rut. Sometimes magazine management accidentally incentivizes maladaptive behaviors. If financial rewards are too heavily focused on total sales, it's an invitation for salespeople to avoid building the prospect list and making cold calls. Actually, some of the list building can be done by an advertising assistant working under the guidance of a salesperson. An assistant can also help in qualifying the prospects. That needs to be done with care, however, so as not to dampen the new prospect's receptivity to a future sales call. We'll have more on this in a future issue.

5. The Lack of Business Agility. A rigid organization will be in great danger in the face of changing circumstances. We're seeing changing circumstances right now. Publishers must be willing to depart from past procedures and strategies. Now is the time to match what you are doing to today's reality. What's more, you need to roll with emerging change since Covid-induced economic effects are still unfolding and will continue to do so for some time. Free yourself to experiment and develop new strategies. Use positive leadership techniques to bring your staff along in this. It will be important for them to see and share your vision. Be patient, though. Change is never easy for a lot of people. Some will see it as a threat instead of an opportunity. It will be up to you to show them the difference, and how adapting to economic and market changes will be in their own personal interests.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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Free Assistance and Recovery Help

Posted on Friday, July 31, 2020 at 3:48 AM

During this time of crisis, we stand ready to answer any specific questions our readers may have, time permitting. You can contact us at:

crisis-help@stratnewsletter.com

When the national health crisis subsides, publishers unfortunately should not expect to easily resume business as usual. Economists are predicting tough times ahead. In addition, the impact of the crisis may well result in different expectations of us on the part of our audiences. STRAT will provide a series of articles to help you all through the period of recovery and readjustment.

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