You are the director of a B2B publishing company. Advertising revenue has dropped and page yields are low. Profitability would be increased if you converted free readers to paid-for subscribers. However, you are unable to convert your readers because you donâ€™t have the money for that kind of marketing.
This inextricable situation has happened because of the advertising downturn. You certainly canâ€™t be blamed for the vagaries of advertising budgets. Or can you?
The fact is, if you are the person in charge, the whole situation is probably your fault. To find out why this is, letâ€™s look at some typical attitudes:
The three stages of denial:
1. Just before launch:
â€œWe need to convince advertisers we cover the whole market. We canâ€™t do that if we sell just a few subscriptions. Anyway, thereâ€™s no time. Weâ€™re launching in two months.â€
2. When advertisement revenue is strong:
â€œWe donâ€™t need to invest in building subscribers because there is no need. The magazine is making plenty of money. Why divert profits to marketing?â€
3. When the magazine is losing money:
â€œWe donâ€™t have the budget to bring in subscribers. We have to cut costs.â€
I have helped various publications successfully convert readers from free to paid-for and they all have one thing in common: a committed managing director. The average publisher is not usually responsive to the arguments set out in this article because he or she is focused on advertising revenue or just isnâ€™t confident about the procedure. .
Clearing that â€˜mental blockâ€™
Most publishers are trapped and afraid to take even the first step. In this article I attempt to explain why this is. And if I sometimes use psychological terms, itâ€™s because the main reason for a publisher holding back from increasing profits in this way is a â€˜mental block.â€™
Converting readers to a free publication into paid-for subscribers has always been the Holy Grail for business publishers. And the idea has never been more attractive than now. Advertisement revenue has been low, causing many managing directors of B2B magazines to take drastic action.
Cut, close, cancel and sell up
When advertisers cut their budgets and decide to promote their services and goods through direct sales rather than through the pages of a business magazine, itâ€™s time for the publisher to act. Here are ten common examples of what they do:
1. Replace creative publishers with cost-cutting administrators
2. Cancel all marketing
3. Cancel all investment
4. Make advertisement sales people redundant and reduce commissions for the rest
5. Abolish staff recruitment and training
6. Reduce editorial staff
7. Sack senior staff and replace with juniors
8. Donâ€™t replace company cars until theyâ€™ve recorded 80,000 â€“ 100,000 miles
9. Fold low-performing titles
10. Sell the B2B division in order to â€˜focus on core productsâ€™
This is hardly a list of innovative solutions and many of us have experienced these painful and drastic steps. But then we should accept that life becomes harsh when there is an advertising downturn and revenue dives. Or should we?
Most of the above measures are unnecessary. Youâ€™ll notice that â€˜Sell more subscriptionsâ€™ does not appear anywhere on the list. Thatâ€™s because itâ€™s rarely even considered as a solution because most companies cut all marketing immediately a downturn arrives.
Whereâ€™s the creative planning?
Creativity doesnâ€™t exist in the mind of a â€˜cost-cutting administratorâ€™ and things become worse and worse for everyone the deeper the cuts go. But these measures are often a consequence of poor planning.
Things have been looking bad for many trade publishers for a while, but itâ€™s not actually as bad as it could be. During the last major recession at the beginning of the 90â€™s, even the banks suffered. Profits were diving, no one was lending money and publishing businesses were struggling to pay salaries.
This time itâ€™s different. Although advertising revenue has dropped, the readers of both consumer and business magazines are generally very well off. They are buying houses everywhere and happily paying high amounts for their subscriptions and not questioning regular rises in the rates they pay.
The wonderful opportunities this situation offers have, however, escaped the notice of the publishing fraternity. Although they may now see the attraction in bringing in lots of subscription revenue, publishers have omitted to set aside a realistic business model for subscription building and are not ready or able to fund any real marketing activity.
Overlooking or ignoring potential subscribers as a source of revenue during the good times is the reason so many business magazines have been struggling. Itâ€™s clear they have little or no financial stability.
In part 2 of this article, I look at the steps to take to convert your title.
Click here for part 2
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