Expanding your consumer franchise

Folio: The Magazine for Magazine Management, Annual, 1992 by Reed Phillips, Chris Fodor

Using what you've got

Consumer magazine publishers have a headstart in launching product extensions because many of the necessary resources are already in place. Your assets as a going publishing concern include the following:

* Your subscription list. A responsive list is an invaluable asset for start-ups that rely on the direct marketing. Like many other direct-mail giants, the National Geographic Society promotes primarily through mail campaigns to its house list. The 9.5 million Society members are typically offered some 10 new products each year, either in individual mailing or via catalogs. It therefore comes as no surprise that the Society's special Publications sell 350,000 to 400,000 copies per title.

* Magazine space. House ads are an inexpensive way to test product extension ideas. Playboy experiments with new ideas with one-third page ads and then increases the size to a full page if the response warrants it. Pat Corpora, president of the book division at Rodale Press, cautions, however, that house ads may not always produce the quantity of orders that direct mail can. Corpora says a cover wrap on almost three million copies of Prevention brought only 22,000 sales of The Doctor's Book of Home Remedies, just a small portion of the book's total sales of 750,000.

* Newsstand expertise. In general, newsstand buyers are considered good prospects for product extensions because they purchase the magazine at the cover price. Even magazines whose circulations are exclusively newsstand are still good launch pads for product extensions.

* Relationships with advertisers. Relationships forged with advertisers are of critical importance when starting spin-offs, one-shots, and wall media. According to Neal Vitale, vice president of consumer publishing at Cahners Publishing Company, when his company launched its Modern Bride spin-off, Your Prom, it had the advantage of Modern Bride's relationships with advertisers of bridal gowns, many of whom also sell prom dresses.

* A skilled staff. The talent on your magazine may be your most valuable resource because these people often supply the ideas and expertise for product extensions. They have direct marketing, editorial, production, and ad sales skills - many of which are transferable to product extensions.

What it costs

Some "perennial" products - say, books - need no more development than a brief description in a direct mail piece or a catalog. But if the product is unusual or your projected investment substantial, you may want to test with a prototype before you commit to the full-scale project. Regardless of the scale of the prototype development, both editorial and publishing staffs should contribute their thoughts at this point.

The prototype may be tested using traditional means, such as focus groups or direct mail tests. All the publishers whom we interviewed emphasized the importance of research and testing. Typical of this view was that of Pat Corpora: "Research can save you from costly errors."

Also important at this stage is making a profit-and-loss projection. You should be careful not to underestimate the investment required just because the new product is an extension of the magazine. As Thain points out, all new business - spinoffs or otherwise - need start-up capital. The range of investment varies as follows: