From the Editor: Taking Some Eggs Out of the Ad-Revenue Basket
Many magazines today are bleeding profits. Ad revenues are down in almost every market segment, and right now, there’s no telling when—or if—they are going to come back. For many (the recession aside), ad revenue is shifting online, but often at a slow pace, and it still comprises a relatively small slice of total revenue. As former Berkery Noyes Media consultant Jeff Reinhardt says in this issue’s feature story (“Outside-the-Box Revenue Generators,” page 28), “The marketplace has undervalued it. We’ve gotten rid of 10 analog [print] dollars and replaced them with 10 digital dimes.”
With this imbalance (and loss) comes an even more pressing need to offset ad revenues.
As Samir “Mr. Magazine” Husni says in his “Guest Columnist” column (page 22), the days of relying on ad revenues to support a magazine are over. Husni suggests that we must all revisit our business models, and that we must charge readers for content.
But for some publishing companies, especially business-to-business publishers where unpaid, controlled-circulation models continue to be the norm, more change seems to be needed. In order to sustain the increasing costs of publishing and distribution, and to take some of their eggs out of the volatile ad-revenue basket, innovation and creativity are needed like never before.
As conveyed in the feature story, publishers have a wealth of valuable assets, and while they’ve always managed to find ways to creatively package and sell those assets, the pressure to diversify is on full force today. Diversification is a sound strategy even in a healthy economy where ad revenue is still flowing at a healthy pace. There’s a reason the “putting all your eggs in one basket” saying exists as a cautionary tale.
Add to that some recent studies showing that what money is out there among marketers is being spent on Web development and other content products (white papers, microsites, events, etc.).