Tuesday, February 14, 2012

B2B launch strategy: launch a new magazine to go after new business, or protect the business you have?

In my years of B2B publishing I have led a few new magazine launches – it's actually how I started publishing magazines – and more than a few acquisitions. The reasons publishers launch a new product has always intrigued me… some do it go after a new category or industry, many do it to protect the business they have.

When I was with McGraw-Hill I launched my first B2B magazine for two reasons: first, we weren't getting the advertising with our existing daily newspaper product, and second, we had the staff to do it, no need to hire editorial or sales. The new magazine launch really excited the staff and it turned out to be a modest financial success (very modest).

Through the years, however, it seems to me that the two reasons publishers now give for a launch is that one, a new market has emerged, or two, they feel the need to protect a category of business they are getting.

CM Magazine: my magazine launch while at McGraw-Hill. Don't ask what "CM" stands for, it's a long story.

The first reason is easy to understand: a new technology emerges, like nanotechnology or cloud storage, so someone launches a magazine to cover the industry. (See story on CLOUD Magazine.)

But many, probably too many, magazines are launched simply out of fear that without the new launch the company may lose the advertising from a category, or not get new advertising in that category.

I remember the panic that arose when, as publisher of Roads & Bridges, our sales team learned that a couple of huge new players would be entering the rental equipment market and they these big players would be spending big bucks in advertising in the next year. What could we do to get this business?

We heard all sorts of rumors about what the other magazines involved in construction were willing to do to get this business. We decided to simply make our regular pitch which was that our readers didn't see themselves as buyers or renters of equipment, they say themselves as road contractors, and since we were the #1 book in the field you needed to reach our readers.

It worked, thank God, and we made it onto the top tier of the schedule.

A friend of mine from McGraw-Hill days asked me later how we got the business? When I told him he laughed. "We dropped our drawers, that's how we got the schedule!"

"But," he continued, "you want to know how XYZ magazine got the schedule? They launched a new magazine."

I was stunned. It seemed to me to be a great way to get the schedule, increase revenue, but burn away any profits that could be made. Not surprisingly, that magazine got the good schedule, as well, but that magazine eventually had to be closed.

I still see this logic used to justify magazine launches today, though magazine launches overall are not what they used to be.

But the rise of digital publishing platforms like mobile and tablets may be a good excuse to change my mind. A publisher today could launch a tablet magazine for one category, have dramatically lower production and distribution costs for that launch, and keep the print advertising in their existing magazine. The key is to hang on to that existing business, while at the same time hanging on to that existing profit.

Admittedly the new digital launch will not be without costs, but assuming the media firm is currently committed to developing their own digital products, rather than farming them out, the costs should be minimal – though I wouldn't rule out using a vendor, as well.

The rationale to launch a new print product soon is forgotten when the original main print product start getting thinner. Switch business, any veteran publisher will tell you, is a bad idea. It gets you nowhere.

But digital platforms might prove to be a way of having it both ways.


Anonymous said...

One thing missing from the post that I would add: it is amazing how many magazine launches occur without a full P&L being created before the launch.

That would have been considered crazy in the past, now many companies just wing it.

Anonymous said...

I think you need to add to your first reason.

It is not just new markets being created. The internet and e-products has opened up international niche markets that would have been uneconomical to hit with paper based controlled circulations but can be very profitable for new launches - particularly if combined with events, awards etc