Splitting hairsA bright spot for print media amid the recession |
Wanted shows the way for niche magazines.
EAST LONDON - 2009 was such a horrendous year for print media, up against the wall because of the fall in advertising revenue and a decline in circulation, that I was surprised and cheered to stumble across a publication that actually succeeded in growing ad revenue.
Unless you're a Business Day subscriber, you wouldn't have come across Wanted, which was started five and a half years ago and is modelled on How to Spend It, the magazine put out by the Financial Times. Just like How to Spend It, it's a glossy high-end monthly magazine and its advertisers are luxury brands such as Pernod Ricard, Vendome and Montblanc.
Advertising doesn't come cheap in Wanted and even though the luxury-goods companies were hit by the recession last year, Wanted still exceeded its ad targets. In the 2008/09 financial year (till the end of March) the magazine exceeded its target by 140%, says Antoinette van Wyk, who oversees Wanted's advertising. At the moment, with about two months to go before the end of the 2009/10 financial year, they've hit the 140% mark.
Wanted's editor, Gary Cotterell, says he knew that luxury-goods companies would be affected by the recession last year and was pleasantly surprised that the magazine maintained its growth. Most months last year, the magazine was over 60 pages and even got up to 138 pages. (Advertising determines the amount of pages you print in newspapers and magazines.)
In a year when many magazines shut up shop in South Africa, this is really remarkable.
Part of Wanted's success can be attributed to it being one of the very few South African magazines to play in the luxury space. There are a couple of others such as Prestige but, really, Wanted is in a class of its own as it's packed with original content. Prestige always seems a tad press-release driven.
So it seems then that even though luxury-goods companies cut marketing spend last year, Wanted remained the vehicle of choice to reach wealthy readers.
There is also a lesson to be learned in how much Wanted does with so few people. Most magazines have small teams (maybe a team of five to seven fulltime staff) to keep costs down. Wanted only has two fulltime staff members, who work from Business Day's newsroom, and Cotterell is a veritable one-man band as he does everything from story origination, commissioning and guiding of writers to designing the magazine, art direction and overseeing photo shoots - and still gets out and about all over the country to help maintain relationships with advertisers.
It's an incredibly tight ship and Cotterell says the biggest costs are the printing and the photo shoots. It took a while to get to profitability (about three years), he says, and its biggest weakness is that because it goes only to Business Day subscribers, the brand is not well known beyond them. But then, would Wanted have succeeded if it had tried to sell itself as a stand-alone product? Possibly not. The 30 000 Business Day subscribers (albeit the bulk of which are corporates) guaranteed the magazine the perfect target audience from the start.
So could this possibly be a way forward for magazines, which are always going to be much more of a discretionary spend for consumers than newspapers? Should more magazines be looking to tie up with newspapers to reach subscribers (or readers) rather than battling it out on the shelves of retailers?
Maybe so though it wouldn't work for general-interest magazines. If a newspaper subscription got you a free decor or travel magazine, for instance, some people might go for it and, Lord knows, this recession has demonstrated the need for media to think out of their boxes.
I suspect such a tie-up would have more value to the newspaper than to the magazine. All around the world, newspapers are searching for ways to diversify their revenue streams. The best example is the Washington Post Company, which makes more money out of its educational services provider, Kaplan, than its titles that include Newsweek.
Even though Wanted brings in profit for Business Day newspaper, the main strategic aim for it and two newer magazine - a monthly investment title and a sports one which are outsourced (Business Day takes a revenue cut) and they go into the full run of the paper - is to enable it to sell for a higher cover price.
Simply put, the idea is to offer more so that you can sell it for more. The Sunday Times has long been on this road. The Lifestyle and Travel & Food supplements and The Times newspaper have all been to this end.
At R9.50, Business Day is the most expensive daily paper in the country and the paper's editor, Peter Bruce, says his mission has always been to free the title from an unhealthy dependence on advertising revenue. Most daily broadsheets in this country sell for between R4 and R5.
The tyranny and vagaries of ad revenue is something that plagues all newspapers in this country, and Bruce estimates that advertising makes up an average 80% of the South African papers' revenue.
Business Day has tried many different value-add products such as various supplements, some of which have failed as they were reliant on sponsorship rather than advertising. You can only go so far with sponsorship, says Bruce. If they pull out, you're really in a jam.
"The challenge with all of these things is to keep your costs down so your margins improve... (Magazines) are an expensive business. If you set up a fashion shoot with a model, you're into costs areas that Business Day has never heard of before so it is a challenge for us," says Bruce. "But Wanted is very profitable and that's largely because of the genius of Gary Cotterell."
As for the year ahead for Business Day, Bruce has this to say: "We going to continue to add value... but there's no tricks... I don't think there's any magical way out. For any newspaper or radio or TV station, you want to hold on to your audience, find out what they want, how they want to get it and try do that for them."
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