Thinking Small

Brandweek, Sept 18, 2000 by Keith Dunnavant

By catering to an elite audience, National Journal Group's influence and profits are rising

In politics, information is power and access is the ultimate currency. John Fox Sullivan, the president and publisher of National Journal Group, has managed to fuse these two ideas to craft an unusual business success story, exploiting both old and new media.

Ideological journals such as The Nation and The Weekly Standard certainly help set the agenda in Washington, but as businesses, most are money-losing propositions, saddled with tiny circulations and limited advertising prospects. Even George, the glossy political-culture magazine founded by the late John F. Kennedy Jr., has struggled to justify its existence.

For the better part of three decades, National Journal was a financial drain for Times Mirror, which finally unloaded it to a group headed by David Bradley in 1997. But thanks to a more aggressive marketing strategy--and beefed-up editorial content--the flagship magazine and its sister publications are proving that you can make money by peddling political information.

"We're really not in the same business as many other political magazines," points out Sullivan, who spent five years on the publishing side at Newsweek. "We're a trade publisher. Our trade is government and politics, the highest-stakes game in the world."

Revenue has doubled in the last three years, to more than $30 million, and the company--which also owns the Web sites CongressDaily, The Hotline and Greenwire, as well as The Almanac of American Politics--is solidly in the black for the first time in its history.

National Journal's strategy is two-pronged: By offering the most comprehensive coverage of politics, government and public policy--without taking sides--the weekly has become required reading for a small but powerful group, including members of Congress and administration officials. Its journalists--including analyst Charlie Cook, considered a brand name in Washington--have earned a reputation for even-handedness and depth, contrasting sharply with the ideologically driven political magazines. Although some bulk-purchase deals are cut, the open rate for a subscription is a whopping $1,197 per year. Because that elite group of about 10,000 subscribers is so elusive, a relatively small but growing list of corporations and lobbying organizations who want to influence the political debate are knocking on Sullivan's door--and paying CPMs that sound more like Zip codes.

"We give them the pure audience they want to reach," Sullivan says.

An even more select group--about 1,000, including institutional subscribers such as The New York Times--pays $4,800 per year to access The Hotline, a daily Web digest of political news culled from newspapers, magazines and online services. "We're food for the most serious political junkies," says editor in chief Craig Crawford, who adds that his mandate is to complete his postings by noon, because his subscribers "need to be smart by lunchtime."

In 1996, the first presidential-election year of the Internet age, NJG partnered with ABC News and The Washington Post to produce the PoliticsNow Web site, and even though the network and the newspaper pushed traffic, the parties couldn't figure out how to turn a profit from all those ordinary eyeballs.

Then Sullivan decided to think small. "By closing the door ... creating a very small, elite community, we actually enhanced [the site's] value," he says. Advertising revenues will surpass $1 million this year, nearly double the 1999 figure.

The company has even succeeded with old-fashioned newsprint. During this year's political conventions, National Journal produced a daily tabloid newspaper--distributed free to delegates, media and other attendees--filled with a combination of breaking news and features on the candidates and the parties. With more than 200 pages of advertising--at an average rate of $8,500--those two weeks generated more than $2 million in revenue, which reinforces one of the most fundamental lessons in publishing: It's the audience, stupid.