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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