The New Pressures On CDs

Circulation Management, August 1, 2004

Byline: KRISTINA JOUKHADAR

What are you doing today as a circ director that you weren't doing ten years ago?

That question was posed to panelists by Tom Masterson, vice president and worldwide circulation director for Business Week during the Circulation Management Conference & Exposition.

"I think there's more pressure on circulators - more than ever - on coming up with new sources and new ways to get consumers. You need to be an idea generator," answered Brian Wolfe, president, Time Consumer Marketing, Inc. "You weren't really pressured to do that 10 years ago, even 5 years ago. Those skills are very important now."

"You've got to be able to talk about numbers and how to analyze them and how to monitor," added veteran circulator Kitty Colbert. "All those skills have really helped me. Not only do you have to be good on your feet, you have to have sharpened skills and be able to act on anything as quickly as possible."

David Lecky, vice president-circulation for Hachette Filipacchi Media U.S., had a different view.

"The biggest aspect of the job that my mentor did not have is that I am more ad sales oriented," he said. "I think the best ad sales people are circulators - they understand the product and our audience. That's a real big part of my job now."

How do you grow circ revenue?

"Advertising has been down the last couple years and there's a real push to grow the consumer marketing part of the business," said Masterson. "Magazine consumption has declined...the average sub price in the 2nd half of last year was basically flat. How do you grow circulation revenue?"

"I think the rate base is part of the problem," said Wolfe. "If you are stretching to meet your rate base, that is going to put pressure on your pricing. I think you need the right rate base, and that's just the starting point. To build on that, it's all about the edit product, and how good it is. It will come back to you selling your product - what it is about your magazine that sets it apart. And if you have that, I think you can charge a good amount for your magazine."

"At a non-profit, what they care about is how much can circ bring to the bottom line when advertising is declining," said Colbert. "One of the challenges here is a natural circ level - that's a really hard thing to get around."

"Some of you have direct mail successes that you want the company to invest in," Colbert continued. "But how do you deliver an increasing net margin contribution on the circ level? The challenges of rate bases are not driven by advertising, but by what is profitable for publishers overall."

Wolfe asked: "What is the optimal rate base when you are balancing the marginal contributions of circulation against how much advertising you will get if you grow the rate base another 10 percent? There has to be a balance."