Routes To Success For Consumer Magazine Websites 2007

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The sample was not intended to be representative of all consumer magazine websites: the aim was to learn from those who had achieved success. A total of 37 websites were included in the survey.

Summary of findings

This is a survey about successful consumer magazine websites. Success is defined in whatever terms the publisher considers relevant – online branding, profit, new revenue streams, new products, new audiences, or any other relevant defined objective.

Organisation and objectives

The most common way in which the successful websites in our sample are organised is for online activities to be handled centrally for the whole company, by a single business unit. Comparing the position two years ago, there is an implication that the increasing investment being placed in website development is creating a move towards greater use of specialist internet units.

Four factors stood out as major objectives for the websites: to create new revenue streams/profits in the long term; to expand the audience beyond the print audience base by creating an online audience (i.e. including non-readers of the print publication); to use the website to attract new readers for the print products; and to build a community around the brand. Each of these objectives was claimed by more than eight out of every ten respondents. These four objectives also topped the ranking in the 2005 study.

Hesitancy about increasing one’s investment online (which was evident in the 2005 and especially the 2003 results) has all but disappeared. Nearly one hundred percent of 2007 informants (all but one publisher) expected to expand their online efforts in the next 12 months.

Funding and profitability

For these successful websites, almost half of their revenue comes from earnings from the website. The other significant sources of revenue for the online operations are internal funds provided centrally, and internal funds provided from the relevant publication. Each of these two internal sources provide more than a quarter of overall revenue. There is wide variation from one website to another however.

Just over half of the income from online activities came from advertising revenue. Most of this was display advertising revenue. Again, there was great variation from one website to another.

The available finance has funded an increase in the man-hours devoted to website operations. Comparing with the position one year ago, two-thirds of respondents said that the number of man-hours had increased by 20% or more. Almost all the other respondents said that the number of man-hours had increased but by less than 20%.

Profitability is only one of several possible criteria on which we asked respondents to judge whether or not their website was ‘successful’. Almost half of these sites are profitable – a substantial increase compared with the 2003 survey, and approximately the same proportion as in the 2005 survey. About a quarter of sites are breaking even. Less than 20% of the sites are losing money.

Audiences

The trend in audiences continues to be very strongly upwards, as one would expect. Visitor numbers have increased by 20% or more in the last year, for about two-thirds of our sample of websites. Most of the rest have experienced audience increases but less than 20%.

In almost all cases these successful websites have attracted new audiences to the brand – people who do not read the printed magazine but visit the website. For about two-thirds of the sites (a rather higher percentage than in 2005) the new audience equates to 20% or more of the readership of the magazine. For more than a quarter of the sites (a lower proportion than in 2005) the new audience is less than 20% of the magazine readership. In essence, during the last two years the new web-only audiences have tended to grow in relation to the size of the printed magazine’s readership.

The new audiences fall into three main categories: people who are outside the primary target audience; people who are within the primary target audience but whose commitment to the brand or to print is insufficient for them to buy the magazine; readers outside the home country.

Website content

What content attracts the new audiences? The sense of community; interactive content; the sheer scope of material available; time-critical content; and searchable archives and databases. Underlying much of this are the themes of community and personalised information.

These successful websites found many ways in which to exploit the internet’s ability to deliver easy and instant two-way communication. Among the most widely employed were chat room or message board discussion groups; public debates; print subscription requests; blogs or articles submitted for publication on the site (not paid for); offers/discounts exclusive to members/subscribers; and hyperlinks to relevant external sites, proposed by visitors.

Other widely-offered facilities included email newsletters linked to the website; archive retrieval; video clips; and RSS feeds. All of these were offered by a higher proportion of sites than in 2005.

Just over half the sites had e-commerce capability for online products/services where customers pay online.

Overall, compared with 2005 the general picture in 2007 is one of growth in the range and number of facilities offered by successful websites.

Some websites promoted digital editions of the printed magazine – an exact reproduction in electronic form. About a quarter of the magazines participating in the survey also published a digital edition.

Advertisers and sponsors

The proportion of websites attracting new online-only advertisers has been growing during the last four years. In 2007 about eight out of every ten sites had gained advertisers online who did not advertise in the printed magazine.

The new advertisers could be attracted by any of a range of factors: audience type; audience size; low cost; advertisement packages; speed; interactivity; sales leads; continuous presence; and measurability.

Most publishers create advertising and/or sponsorship opportunities across both the print and online brands, with the aim of encouraging magazine-only advertisers to use the website as well, and vice versa.

Around a third of the websites offered search/contextual advertising.

Marketing

There are four primary ways in which these websites are marketed to customers: promotion within the printed magazine(s) hosting the website; email promotions; promotional links (paid-for or free) from other websites; and promotion within other magazines owned by the company.

Many other marketing activities are also in use by a minority of sites. These include promotional events, buying search advertising on external search engines; taking paid-for advertising in non-owned print media, TV, radio, etc; setting up exchange arrangements with these media; and cross-referencing from the publisher’s own services on mobile phones and other platforms.

Competitors online

Rather more than half of publishers believe that their competitors online for attracting site visitors are mainly different competitors from their competitors to the printed magazine.

The new competitors include other types of traditional media which have also developed their own internet services and thus, within a given market, compete with magazine publishers in a much more direct way (e.g. television, newspapers).

However the main thrust of the new competitors lies in entirely new kinds of service which are creatures of the internet. Examples are online communities, portals (e.g. MSN, Yahoo), and specialist web-only services. The strength of competition from these types of facilities has been growing.

Barriers to success, and lessons learned

The three main barriers to success for consumer publishers in operating websites are resistance by existing employees who work on print products; insufficient funds for web development; and pressure to focus on print products.