Why magazines matter
There’s never been a time in history when we had more choices than we do today. In our industrialized world, we have virtually unlimited options in terms of where we live, work, play, shop; what we eat, drink, wear, read; how we communicate, create value, criticize; and how we spend our most precious resource — time.
On the surface, all this choice seems like nirvana, especially when compared to what our parents had. But as psychologist and author, Barry Schwartz, warns in his book “The Paradox of Choice”, in reality, negative effects come with multiple choice.
1. It produces paralysis rather than freedom.
2. The more choices we have, the higher our expectations.
3. The higher our expectations, the less satisfied we are with the results of our selection.
With previous generations, the lack of choice made it likelier for people to experience more pleasant surprises. However, today, being pleasantly surprised is much harder to achieve because we have become citizens of “perfection is our expectation” — making Schwartz conclude that the secret to happiness is low expectations.
Now, I’m not out to endorse his rather unsettling assertion, but I have to admit that choosing what content to read, listen to, and watch can be stressful and challenging, especially online.
Thankfully, algorithmic curation through machine learning helps personalize options for us based on our interests, reducing the anxiety that comes with our growing demand for instant gratification and the paradox of choice.
So what has any of this got to do with magazines?
Unlike other forms of content (e.g. newspapers, television, social media, etc.) magazines are already filtered for us by the nature of their niche-ness — a differentiator that helps diminish the paradox of choice symptoms by connecting readers directly with their passions.
In 2017, Time Inc. UK research identified key passion points and personality attributes of passionate people. They learned that, on average, passionate people spend US$230 on their passion every month (10% spend close to US$700).
Magazine Networks also did an in-depth study looking at readership of magazines in Australia. It found engagement levels most other forms of media would die for.
The potential of passion-based periodicals isn’t lost on agencies (e.g. JWT Intelligence, R/GA), brick and mortar brands (e.g. Walmart, Four Seasons, Marriott, and Coca-Cola) and digital pureplays (e.g. Uber and Airbnb). All of these segments have launched their own magazines to capitalize on opportunities to grow more direct engagement with clients, employees, and consumers through content marketing.
One of my favorites comes from Costco — a membership warehouse club that provides select, brand-name merchandise and services, typically at lower prices than retail outlets. Costco Connection enables an ongoing communication between the brand and its 64 million members — a vehicle by which it can continually communicate the value of the annual membership. Close to 90% of members renew their membership each year.
Every month I look forward to receiving the magazine (not the online version, which is how I read most of my news, but the print edition) for many reasons. Costco Connection:
• Informs me about both their products and recent trends across a variety of industries (technology, finance, health, travel, etc.).
• Inspires me to look beyond my typical choices in food, menus, recipes, and even books.
• Influences my purchasing decisions by cleverly curating thousands of items based on price points and consumer testing.
• Challenges me through its monthly Informed Debate section where experts weigh in on often-complex social issues, providing both pros and cons and also opinions from readers.
I’ve often thought it would be great if more publishers offered this type of collaborative content for their audiences. I truly believe it would be welcomed by readers and not overly expensive to produce.
In 2015, Costco Connection was the largest circulation print monthly magazine in the US. Today it has ~12.7 million print subscribers across nine international markets — an audience forecast to spend more than US$26B at Costco stores alone in 2018. It is a content marketing powerhouse!
Speaking of marketing…
It comes as no surprise that the magazine industry is struggling to maintain, let alone grow, its advertising revenues.
Why the big difference?
Besides feeding people’s passions, a number of factors come into play.
1. Magazines had and continue to have more, and often better quality, native advertising/branded content
There was quite a bit of negative press with native advertising a few years back for good reason. Although a number of issues raised more than a few eyebrows, the main culprit for concern was the lack of transparency — a serious faux pas that helped feed mistrust in media.
But things have changed quite a bit since then with tighter labeling controls and better content. According to Time Inc.'s 2017 comprehensive study that gathered insights from 17,000 Gen Z, Gen Y, Gen X audiences, ~66% of consumers now trust custom content more than traditional advertising.
Which is probably why branded/sponsored content has become a major revenue generator in the magazine market. By 2020, 40% of advertising revenues in magazines is forecasted to be native.
But what’s interesting is that only 56% of magazines are capitalizing on native advertising though aggressive pricing — 44% seem be leaving money on the table. Curious.
2. With magazines, it’s easier to diversify services/offerings
According to a Reuters Institute for the Study of Journalism survey, the average publisher now has six non-reader-paid revenue streams, including display/mobile advertising, new forms of storytelling (multimedia, chatbots, interactive, podcasts, video), branded content, events, ecommerce, affiliate, related businesses, product licensing, and experiential. Speaking of experiential, have you tried The Economist’s insect ice cream yet?
Magazines have been diversifying their revenue for years, with a number achieving noteworthy returns, particularly in the area of brand licensing.
Meredith-licensed retail products saw US$22B in sales in 2016. Dennis in the UK generated US$43M in 2017 through its car buying website — double what it made the year before.
62% of media executives today say that offering new paid-for products and services is one of their top three strategic priorities. But given how everyone seems to be pivoting back to paywalls lately, it may surprise you to learn that curated aggregation is considered to be the most commercially attractive model.
3. Magazine brands are trusted more than other forms of media
According Edelman’s latest barometer, trust in media today is at an all-time low in 17 countries.
But not all media is created equal; there are significant variations in attitudes towards specific media brands. Because magazines are focused on a specific passion or topic, a discerning audience tends to be more aware of the subject matter and often feel like they are the better of judge on whether an article is stating the truth
or not. And according to an AdSense study, magazines’ deep-dive approach to writing (often due to the depth of research undertaken) helps create higher levels of trust with consumers.
Besides being well-researched, magazines are also seen as more targeted, more informative, more relatable, less biased, and more honest. And that trust translates to advertising as well.
4. Magazines have more evergreen content which drives more traffic
While search engines do reward new, topical news, they also reward quality evergreen content that provides helpful and relevant information to audiences. This includes people-first, how-to articles, listicles, product reviews, tips and tricks, infographics, etc.
Magazines such as Business Insider, Fast Company and New York magazine recognized this opportunity a number of years ago and are reaping the rewards by turning old into new.
The attractiveness of evergreen content is also a great incentive for advertisers to create more useful and less promotional branded content for their target markets.
No rest for the winners
Magazines have a lot going for them, but their future is still facing many challenges. In the US alone, there are well over 7,000 magazines in circulation and, according to MPA, 700 new magazines were launched in 2017.
The industry, like so many others is feeling the effects of information overload combined with our reduced attention spans — a combination that has resulted in less time being spent reading magazines.
Consolidation is another threat we’re seeing now and will continue to witness for years to come. Some of the highly regarded publications that garner high subscription prices (e.g. The Economist and The New Yorker) will likely prevail, but even they aren’t entirely safe. No one is 100% immune to the impacts of consolidation.
For magazines to be sustainable for the long term, publishers must remember what makes them great today and build a new future on top of those strengths.
1. Be audience-focused to help mitigate the paradox of choice.
2. Have strong editorial and advertorial teams that produce high quality, relevant content and advertising.
3. Work at retaining people’s trust.
4. Diversify revenue streams to offer more engaging experiences to audiences.
5. Offer useful, evergreen content for sustainable SEO.
In today’s rapidly evolving digital landscape, where first-movers and winner-takes-all dynamics demand continual innovation, magazine executives must move boldly and become “digital reinventers” who are willing to play outside the margins.
They also must also be agile and quick to adapt to the accelerated changes that come with revolutionary technological advancements and societal transformation.
And they must be able to shed the shackles that come from holding on to the past and operating in silos — two imperatives that will enable the contextual awareness needed to detect and react correctly to market dynamics that can either help or hurt their business.
It’s been said that people need to be reminded more than they need to be instructed, so please let me remind you of this, “Magazines matter, but people matter more. Focus your business on people first and continually build on your core competencies to delight them with the right content and experiences, at the right time, through the right channels, at the right price.”
But magazines, with a 2016-21 CAGR of -.05%, aren’t feeling the plunge quite as much as newspapers sliding at -4.315%.