Web's no panacea for selling subs

Web's no panacea
for selling subs

Magazines find the learning curve can be steep

By Ronna Abramson

   At their peak, the stampsheet houses were a great boon to the magazine industry, generating new subscriptions at very low cost.
   So when the likes of Publishers Clearinghouse began getting into legal troubles over their solicitation tactics, it was only natural that publishers would turn to what looked like the next great thing for building circulation: the internet.
    They are still looking.
    Raising new subscribers on the internet can be done, and more publishers are turning to the web to do it. But it's proving a lot more complicated than many first thought.
    "The internet was going to be the Holy Grail. It was going to replace Publishers Clearinghouse," says Humphry Rolleston, marketing director for The Economist. "Like all of these things, it probably doesn't work out that way."
    As many are realizing, online marketing is quite different from traditional direct mail, and there is still much to learn, says Danielle DiMatteo, new business manager in The Economist's circulation department.
    "With our off-line campaigns we know what works. It's been around forever," DiMatteo says.
     "Online there is still a lot to learn as far as where our offer can work and what types of campaigns will work, as well as the availability of e-mail addresses," she says.
  The Economist has averaged 1,000 new subscribers per month on its web site since the start of its fiscal year in April. And that number has increased since the Sept. 11 terrorist attacks.
    Banner ads have also enjoyed a high pay-up rate on the Financial Times site. The typical pay-up rate publishers expect is 30 percent to 40 percent.
    But e-mail lists are another animal altogether and far less reliable than direct mail lists.
    "It's difficult to get lists that are as well targeted as postal names," DiMatteo says.
    Co-registration deals, meanwhile, are proving to be among the most popular online promotions for publishers.
    In these deals, magazines offer a free trial or discount subscription when a consumer signs up for another service, such as e-mail.
   The appeal is simple: Publishers pay for the ad only when a consumer signs up for the offer. Each lead generated through such co-registration deals typically costs from 75 cents to $2.50, according to publishers and marketing firms.
    But even the start-ups that specialize in handling co-registration deals for magazine publishers acknowledge that there are difficulties.
    When Donna Bloom, co-founder of Mighty Seven, got into the online marketing business several years ago, she initially thought marketing on web sites would be no different than using lists in the off-line world.
    Bloom was wrong.
    "Web sites are not like lists. Lists are more consistent," she says. Visitors on a web site might change if, for example, the site ends an ad campaign.
    "You never know who or what or why people are visiting the sites," says Bloom, vice president of circulation at Mighty Seven, whose customers have included Condé Nast.
    Publishers want response rates in the teen percentages but are not yet always getting them with online promotions, Bloom says.
   So why do they keep going online?
   Because compared to a more expensive direct mail campaign, which would typically get a 2 percent gross response and then a 30 percent pay-up rate, the internet starts to look better.
    "Most of the publishers find it's as good or better than what they're used to paying for subscribers," says Mitchel Harad, CEO and co-founder of GetRelevant, whose longest-running customer is International Data Group.
    Harad's advice to publishers is test and test and test.
    Ziff Davis, for instance, tried three online promotions with GetRelevant: One free trial issue with a premium gift such as a book; one free trial issue without a gift; and a "hard offer" requiring a credit card to sign up for a discounted subscription.
    So what's the winning formula?
    "The model we're going forward with now is getting a free trial issue and a free gift on payment," says Rebecca Petruck, online marketing manager at Condé Nast, which has also worked with online marketers GetRelevant, VentureDirect and Naviant.
    "That seems to be providing a lift on payment but without lowering numbers."
    Wired gives away an online arcade of downloadable games. Handbags are always a win for women's magazines.
    AOL Time Warner's magazine promotion online is another much-ballyhooed success story.
    The media behemoth set a goal of boosting circulation for Time Inc.'s publications by 100,000 subscribers per month through promotions on AOL web sites.
    "The orders we get on AOL are great subscriptions because we get people's credit cards and we don't have to spend money sending them a bill," says Bianca Janosevic, Time magazine's online marketing manager.
    "Anytime you don't have to ask for information, whether it's name or address, it increases response because it just becomes a one-click."
    For others, though, follow-up through snail mail can be critical. Bloom has found that subscribers are more likely to forget signing up for a magazine through an online offer than off-line.
    That's because an online offer--usually just a few lines of text and a form that can be filled out in a minute--is simply less memorable than a glossy direct mail piece. As a result, Bloom advises publishers to send a custom-designed bill that sells the magazine's benefits a second time.
    And send that bill out fast, says Harad.
     "If you sign up today and say you want to try a magazine for free and don't see it for six months, your odds of responding aren't going to be great," he says.

-Ronna Abramson is a writer based in Oakland and a regular contributor to Media Life.

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