Creating an online subscription strategy: Online affiliate marketing, value bundling and assorted customer retention tools can be fertile sources for building subscriptions

Folio: The Magazine for Magazine Management, Jan, 2002 by Ralph Monti

For decades, circulation directors have turned to alternate subscription sources to supplement their direct mall efforts. Now along comes the Web with an array of marketing technologies primed to be a new and fertile source for magazines--and many companies have passed on creating an aggressive online subscription strategy.

To be sure, many publishers still view the Net and an online commitment more as an expensive risk than an opportunity worth investing in. But like the alternate source programs of the past, online strategies can serve to offset the performance declines and costs of the more traditional sources--if planned properly.

New marketing developments continue to evolve on the Web, and they offer today's forward-thinking circulation director a toolbox full of online marketing goodies. Let's examine a few.

Online affiliate marketing: In its purest sense, online affiliate marketing is the process whereby your company places a subscription button, banner or other online ad on another Web site, most often without a fee. When the user clicks through the banner, reaches your site and subscribes to your magazine, the site that directed the user to your site receives a commission. These usually range from 10 to 20 percent of the total sale. In some cases, more often at highly trafficked sites, an affiliate site will receive a flat fee.

In markets where magazines serve high Web usership, online affiliate marketing programs can evolve into fertile sources for magazines. Creative alliances with advertisers, associations and even reader sites, if your magazine serves a vigorous niche market, can lay the foundation for an ongoing source of subscriptions.

Value bundling: While many in the e-community claim value bundling as their own, publishers have been doing it for years via the premium-with-subscription strategy. So how can magazines re-invent this strategy online? In the online world, value bundling is defined as a package of services and/or products that a site offers its users. Portals like Excite, for instance, offer value bundling through regional weather reports, movie times, local sports scores, or any other custom-content service a user can personalize on his home page.

Publishers can take advantage of any content-poor Web sites in their marketplaces by offering to syndicate their editorial to them. As part of the arrangement, the publisher can then negotiate a subscription page on their partner sites. It's a win-win for everybody: Your syndicated sites will have more content to offer their visitors, and in return you will get more presence in your marketplace--through your syndicated content and having an additional subscription page online.

Customer retention tools: There are a variety of customer retention tools available today: E-mail marketing, push newsletters and visitor forums are a few. And as the Web evolves, we will see more powerful marketing tools--for example, video e-mail and bots (pieces of software that roam the Web selling products and services for people and companies).

E-mail marketing and electronic newsletters as retention strategies have proven successful for many online companies, and are strategies perfect for the magazine publisher. They can be especially crucial if your magazine is suffering through declining renewals. And as bandwidth expands and technology improves, subscription promotions via video e-mail or strategic mining of potential readers through bots will be part of the Net experience.

MANAGEMENT'S INVESTMENT

The downside of developing online marketing programs is the management time required to create them. Contacting, soliciting and negotiating with affiliate sites or developing a successful customer retention program is indeed labor intensive. But once a program is in place, it's usually a matter of monitoring subscription activity, charting fee allowances or adding new dynamics to an existing program.

As you lay the groundwork for new subscription sources, you will also be increasing your magazine's presence on the Web--a critical necessity in today's media-intense marketplace.

Ralph Monti is president of Special Interest Media Inc., a magazine management consulting firm. He can be reached at ralphm@mediaconsults.com.