Circulation strategies for Start-ups: In an environment where circulation is under siege at even the most entrenched titles, a sound plan is critical for new entrants

Folio: The Magazine for Magazine Management, Jan, 2002 by Geoff Van Dyke

When Real Simple hit newsstands for the first time, it had every conceivable advantage: a promising publishing team, a unique concept, plus the unprecedented use of all of Time Warner's properties to market the magazine. And yet it stumbled. Advertisers called the magazine cold and plain; top editor Susan Wyland was encouraged to resign after just three issues; and media critics predicted an early demise.

Real Simple has since undergone some not-so-simple changes and is now living up to Time Inc. expectations. But throughout its makeovers and management shake-ups, at least one aspect of the launch plan held true. "The circulation was set from the start--that didn't change when Carrie Tuhy [the title's new editor] came on," says Steve Sachs, Real Simple's consumer marketing director.

The circulation strategy helped rescue the title, anchoring it during the shaky start-up days. "It's Consumer Products 101--it all starts with the consumer and consumer need," says Sachs. Then it's a matter of getting your product into the hands of your target audience. Naturally, Time Warner's marketing muscle made the job of promotion much easier. But the Real Simple circ team also went into the launch with a well-researched, mapped-out game plan. For instance, Sachs says the title's newsstand numbers were strong all along, "and part of the reason is we focused on getting high-quality display."

The Real Simple scenario exemplifies how critical circulation marketing has become. These days, a circulation strategy can make or break a new magazine regardless of who its parents are. Sure, funding is essential and if the title doesn't serve a market need, then nothing can save it. But circulation economics have changed so drastically in the last few years that circulation plans for start-ups must be scrutinized like never before. Here's a look at how conditions have changed.

PLUMMETING NUMBERS

A general summary of the circulation environment in 2001 is simple:

* Newsstand sales are down 30 percent and wholesaler consolidation has tightened up rack space, making it more difficult and more expensive than ever to get a new magazine on display.

* Sweepstakes stampsheets--once a fountain of new subscriptions-have slowed to a mere trickle, and may dry up completely for some.

* Direct-mail response rates are down 30 percent, while volume is up 15 percent and costs are up about 20 percent.

Those statistics are not good news for smaller start-ups that are charting out a circ strategy on a shoestring budget. "It's very hard not to be really well backed by a big company to launch anything of scale," says Chris Butler, vice president, group circulation director, Hearst magazines. "It's a very difficult environment unless you've got some prior credentials."

The current environment favors an established track record, big names and big bucks. "Four or five years ago, pretty much anybody could get a newsstand test out there," says Dan Capell, editor of Capell's Circulation Report. "That's just not going to happen anymore.

Getting a magazine on the newsstand has become one of the most difficult aspects of a launch's circulation strategy. "The newsstand was a wonderful place to test," says Michael Rooney, ESPN The Magazine's senior vice president and general manager, who worked on the launch of Men's Health at Rodale in the mid '80s. "But that was before the consolidation of the wholesalers and the pressure for efficiency from retailers. Today it's not as easy or as logical a place to test a new idea as it was."

Testing is still the cornerstone of a successful circulation strategy, though. According to Capell, circulators must first know how many copies are selling on the newsstands, and at what efficiency those copies are selling, to test the viability of a publication. "But probably equally important," he says, "depending on whether you are going to be a newsstand magazine or a subscription magazine, is the response to the bind-in insert cards and the blow-in cards in that newsstand issue. In other words, how many people had the magazine in their hands and decided to subscribe."

THE COST OF ENTRY

Finding a dedicated national distributor and wholesaler is essential to creating a healthy newsstand presence. And despite the consolidation, wholesalers say they still welcome new magazines, but the cost of entry has risen. Wholesalers are much more selective about which titles they'll make room for on retail shelves.

"I was out at Charles Levy," says Sachs, "and they said that they're looking for new magazines that connect with the consumer. And I think that's the key. If you have a very well thought-out consumer-driven proposition that is likely to be very well received by your reader, then wholesalers will embrace it."

When it comes to wholesalers, cooperation and a mutual understanding of goals that will give a magazine adequate display time are a must. "It's got to get out there, and it's got to stay out there for a while," says Butler. "That's going to mean an investment in retail programs, and it's going to mean that you have some kind of understanding specific to your magazine with the wholesale community."