Powering Up Organic Growth

Folio: The Magazine for Magazine Management, July 1, 1999 by Rolf Maurer

Ideas for expanding existing franchises or launching new ventures are vital to a company's growth. FOLIO: asked four publishing executives how each empowers managers to find new ways to build their company's business.

Frank Anton

President, Hanley-Wood

Every spring, we hold a meeting with senior management on the editorial and publishing sides of the company to propose new ideas with revenue-generating possibilities. Each person makes a fairly formal presentation, and within a few weeks we narrow down six ideas to two or three. Next, the proponents of the remaining projects fill out a five-page cost/benefits form--sort of a mini-business plan that details who would be responsible for the idea's execution, what new equipment, staff or outside partnering would be required, as well as how much revenue it will generate. This step determines whether the idea is a viable plan. We then reassemble the ideas and decide how much money can be allocated to each.

As to how quickly we expect a return on investment, it depends. We knew our trade shows were going to lose money in their first year, but we were convinced of their long-term value. But if we increase a magazine's frequency, we expect immediate benefits.

Barbara Newton

Vice president and publishing director Women's Health Magazine Division, Rodale

At Rodale, we start with an annual strategic planning session where we set the top priorities for our various brands for the next five years. We look for new ideas that support our long-term goals. While a minimum return for a new venture for us is in the neighborhood of $100,000, the amount of time it takes to reach that figure can vary. If a project is strategic to our five-year plan, we are prepared to wait as long as two years before expecting a profit--but it must also continue to show a profit and prove expandable.

Competition for funding comes into play if you must go beyond your brand to receive funds, such as with a magazine launch. The Rodale corporate board must then decide what to invest in.

Andreas Wiele

Executive vice president, COO, Gruner Jahr USA

We have three magazine groups--Women's Service, Parenthood & Shelter and Teen & Fitness--vying for money and resources for proposed projects. These ideas come from publishers, editors or others, usually during monthly departmental business reviews. General managers then implement profit and loss reports for formal consideration before the management board; the board decides whether an idea is approved. While the competition is friendly, it keeps people thinking about possible new avenues of growth all the time. This has resulted in a ratebase increase of two million for our women s magazines since we bought them from The New York Times Co. five years ago.

Our most-established brands, like Parents and Family Circle, are most suited for spin-offs, ranging from Web sites to CDs, books and special lifestyle titles. Other projects--such as the three-year-old biannual Family Circle's Computers Made Easy--we give more time to develop because they are usually addressing emerging markets.

Dick Hendricks

Senior vice president, group publisher Powersports Division, Ehlert Publishing

Upper management attends an annual off-site getaway where people present their ideas. The most compelling are turned into preliminary marketing plans by their originators. Those plans are then evaluated by Ehlert's senior leadership team, made up of the president, myself and various other group publishers and department leaders in circ, production, advertising and editorial. The next test is judging the personnel and resources needed versus revenue expectations.

We also run the ideas past potential advertisers and backers to see if they would be interested in supporting the projects. Such feedback is a great early measure of an extension's viability. Typically, we shoot for a 20 percent return for the first year of a new program's operation. If more than one idea has merit, there is no competition for limited funds, as we operate with sufficient lead time to support several ideas at once. Last year, we launched three magazines, ATV Sport, Cruising Rider and Powersports Business.