Ad sales must wise up about circulation - magazine publishing

Folio: The Magazine for Magazine Management, June 1, 1993 by Bruce Sheiman

Don't let stereotypes about circulation and its role in your business stop you from making the most of what it does best.

With the current emphasis on circulation revenue, circulators are becoming the new heroes of magazine publishing. And as a former circulation director, I applaud this long-overdue recognition. However, circulation still has quite a long way to go before it becomes the equal of advertising sales. The traditional view prevails that circulation, although growing in importance, remains a function subordinated to advertising.

Despite this, there is no question that circulation is gaining in importance, recognition and respect. To help set the stage for the continued ascendancy of circulation management, I want to address what many circulators over the years have identified as the misconceptions and faulty expectations that advertising people--and by extension, many publishers--have regarding circulation.

Circulation is not a faucet. Hard as it is to believe, many ad salespeople continually beseech their circulation counterparts to grow circulation to demonstrate their magazine's editorial vitality to the advertising community. True, being able to demonstrate circulation growth and leadership gives an ad salesperson a powerful competitive advantage. What they need to understand, however, is that a magazine's circulation cannot be increased indefinitely. There is such a thing as a "natural" circulation level. (See FOLIO:, May 15, 1993, page 33.) Some publishers, of course, have already come to this realization. Time, McCall's and Reader's Digest have all lowered their rate bases in the past several years.

If the circulation department is to be run more as a profit center, then serious consideration must be given to the cost of acquiring circulation. The days are over when escalating ad rates and increasing volume more than compensated for increased circulation expenses.

The circulation department can't significantly alter a magazine's demographic profile. Many magazine publishers and advertising directors wish their publications had different readership profiles. But this is like a person wanting a different eye color. Just as a person's eye color is genetically determined, a magazine's readership composition is editorially determined: It is almost entirely the result of the magazine's editorial content. Some magazines are destined to have older than desirable readerships (such as the women's service magazines), or predominantly female readerships (such as health magazines), despite an advertising director's wish to the contrary.

The circulation department can try to nudge readership in one direction or another by selecting different circulation sources or different direct-mail lists. But it is impossible to change a magazine's readership profile significantly without changing its editorial content--and, even then, the desired change could take several years.

Renewals are not an absolute. Every circulation manager dreads being asked about a magazine's renewal rate--an inquiry usually prompted by an advertiser. The reason, simply, is that there really is no such thing as a renewal rate. Every magazine has several renewal rates--conversions, first-time renewals, second-time renewals, renewals at birth, identified renewals and unidentified renewals, as well as rates for each distinct source of subscriptions.

More important, every magazine is characterized by such different market dynamics that making a generalization beyond the frame of reference for that particular magazine is difficult--if not hazardous. If I were to tell you, for example, that a particular title's conversion rate (i.e., the percentage of new subscribers who choose to subscribe for a second term) is 25 percent, you would probably quickly assume that the magazine is in serious trouble. But if I then told you that this is the figure for a bridal magazine to which people subscribe, quite naturally, for a short period, then 25 percent suddenly looks rather good.

Direct-mail agents are okay--really. One of the reasons that one cannot identify a magazine's agent-sold subscriptions on an ABC statement is that they are viewed by some advertisers--and, by extension, some ad salespeople--in a negative light. But the reality is that Publishers Clearing House and American Family Publishers subscriptions are essentially no different demographically or psychographically from a magazine's direct-to-publisher derived subscribers.

PCH and AFP mail to just about everyone with a mailbox. In a typical mailing, they offer more than 100 different magazines. And while the majority of sweepstakes promotions appeal to middle America, this is not exclusively the case. Everyone in America knows that PCH and AFP offer the best prices. And with more than 100 magazines to choose from, respondents select only those magazines that they are most interested in.

Customized subscription sources are frequently unproductive. Every circulation manager has a similar story. The publisher or ad director or even the editor has a bright idea to reach a magazine's purest, most on-target prospective readers. If it's a parenting magazine, they ask that subscription offers be distributed through daycare centers. If it's a business magazine, they suggest distribution of offers through corporations. If it's a health magazine, they recommend distribution of offers through hospitals. These are all good ideas. But, at best, these customized programs can be no more than supplementary sources of paid subscriptions. They should be pursued only after a circulation department has worked through the more traditional, ostensibly less targeted, sources--such as direct mail, insert cards, newsstand, and so on.