Just what the doctor ordered: a stronger business prescription has turned 'house organ' Arthritis Today from liability to profit center

Folio: The Magazine for Magazine Management, Nov 1, 1991 by Susan Hovey

Associations, Bill Otto concedes, are not entrepreneurial by nature. That's all the more reason why he believes association magazines should operate as profit centers.

Otto is publisher of Arthritis Today, the five-year-old title of the Atlanta-based Arthritis Foundation. Since joining the bimonthly as publisher three years ago, he has orchestrated a number of changes designed to turn "a mediocre house organ into a consumer health title for the senior market." (The audience is 68 percent female, with an average age of 62.)

The magazine's underlying purpose is to bolster public awareness of the 460,000-member foundation, a $70 million nonprofit agency that supports research to find a cure for the disease.

That's where the magazine's potential value comes in. Last year alone, the title generated $2 million in bequests as a direct result of blow-in card appeals. As for recognition, more than a dozen awards over the past year and a half--including the prize for "most improved" at this year's annual conference of the Society of National Association Publications (SNAP)--would seem to indicate that Arthritis Today is moving in the right direction.

"Every time we enter a competition, win or lose, we are making an imprint on somebody, somewhere," Otto says. "Hopefully, that will have a rippe effect on the organization."

Awards are nice, but it's Otto's business plan that's really beginning to make a splash. Since coming on board from Cope (a Denver-based title for physicians working with cancer patients) in November 1988, Otto has sought to shore up the circulation of Arthritis Today while changing media buyer attitudes about the title's supposedly off-putting image.

In the past, anyone who contributed $15 or more to the Foundation automatically received a subscription. The money was then shared between a local chapter and the national office, which received about 27 percent. (In addition to the fund-raising on the local level, the Arthritis Foundation has a separate direct-response marketing department.) Since last January, however, Arthritis Today now goes only to those donors who contribute $20 or more and request a subscription. More important, $4 of that is earmarked for the magazine, while the national office still continues to receive 27 percent of the remaining donation.

"The cost of the magazine was going up but there was no offsetting revenue," Otto explains, adding that while circulation has dropped from a high of 720,000 to 500,000, it is now more profitable. (Part of that circulation includes free distribution to the approximately 45,000 doctors who are the biggest prescribers of arthritis medication in the country.)

At the same time, according to Otto, advertising revenues have steadily increased from $300,000 in 1988, to $585,000 in 1989, to $705,000 last year. Otto says he expects to come near the 1990 total again this year.

"It became apparent that if we were going to grow significantly, we needed to take a more targeted approach to selling," Otto recalls. "The magazine is handicapped to a certain degree by its title. People associate it with disease and being crippled. If you as an advertiser have a product that's not endemic to arthritis, you probably won't gravitate to this magazine--even if it's a product that readers want."

During this first year and a half with Arthritis Today, Otto worked with the national ad rep firm already in place. But he eventually concluded that the magazine needed a more personalized selling approach.

"We made a [revenue] jump in the first 12 months," Otto says. "But it became clear that we weren't going to get past that point. We weren't spending the time and energy to develop the longer-term business. Anytime you are working with reps, you are competing with other magazines for their time and attention."

So Otto switched to smaller, separate rep firms in New York City, Atlanta, Miami, Chicago, Dallas and Los Angeles--firms that deal with only three to five other titles, instead of the dozens handled by the national rep. "Now we're in a situation where we have the people who have the time to sell on a one-to-one basis."

The magazine has set its sights on major consumer and packaged goods companies--with more and more products promoting a healthy lifestyle--and is relying less on the kind of direct-response advertising that comes in from issue to issue.

Travel is another category that offers promise. "Our audience tends to be very active," Otto notes.

And then there's the huge potential for prescription drug advertising. "In the past, it's been taboo for pharmaceutical companies to advertise directly to consumers. But that's changing. I think we'll see a much different attitude in the nineties."

Beginning in 1992, Arthritis Today will take the novel step of listing added-value benefits--the title will provide multi-frequency full-page advertisers with 500 promo copies per insertion order--directly on the rate card.

Toning the editorial muscle

The more aggressive advertising approach has no doubt benefited from the editorial redesign introduced in January 1990. "The look is more contemporary and professional," observes Ruth Thaler-Carter, a freelance writer/editor who specializes in association publications. Carter served on the judges' panel at the SNAP Awards. "The magazine now looks like something you would be tempted to pick up on the newstand."