Jumpstart Automotive Group

I recently sat through a series of meetings with a publisher attempting to figure out their three-year product plans. This was a multi-platform publisher who has successful distribution across traditional and digital media platforms — a publisher with a strong brand and a clear mission. As a guy who got his start in publishing at the beginning of the digital content revolution in 1995, I was ill prepared for what I encountered in these meetings.

The problem is this. The desire to capture ad dollars has forced many media companies to make decisions that would normally be called out in a high school economics class. As one would expect by the dire straits of the nation’s newspaper and magazine industry, the print business seems especially culpable.

Today’s print readers are less reflective of an audience’s engagement with a brand and more reflective of that brand’s willingness to bleed out its own value for implausible short-term gains that have no relation to advertiser value. Print circulation files are buttressed with a paid distribution model that results in a circulation rate base inflated 200-300 percent beyond it’s natural state, while at the same time lowering subscription rates to the cost of less than a single-issue. No surprise, the value of this less engaged audience is lower, so CPMs on print have fallen in an inverse correlation to the increases in paid circulation.

The irony, of course, is that the largest perpetrators of these subscription file shell games are the same media companies lamenting the “free” online content distribution model. It was a shock for this new media guy to dive into the weeds and discover that many print publications are operating on a negative margin for their print distribution—essentially giving their content away for free for years. They have traditionally done this because the value of the advertising sold on their “validated” subscription files has to date been able to consume the operating loss of the printed magazines. Since we have been in a deep recession that has seen huge cutbacks in advertising. That model is no longer working.

There is a way out of this. Generating true user engagement with strong brands is valuable. Creating an environment where users engage passionately with content, tools, and like-minded individuals is valuable. This will mean right-sizing subscription files, newsstand distribution, and creating more pathways between different media platforms so that it is easier for users to engage with brands on their own terms, when, where and how they choose. The path to media greatness amidst all of this fragmentation is going to look different this decade than it did in the last. It is not the largest audience that will win. Already media measurement agencies are recognizing that it is the strength of the relationship, not the size of subscription file, nor monthly web visit that is the key to influencing consumer behavior. They key is quality, not quantity.