Partnerships: An Increasingly Promising Source Solution

With the economy taking an increasing toll on discretionary purchases, including magazine newsstand sales, the quest for viable, new circulation sources has never been more vital on these shores.

Since "viable" means capable of producing substantial volumes of subscriptions that are not only reasonably cost-effective or (dare we venture) profitable, but also deemed acceptable by media buyers as counting toward rate-base guarantees, such sources have proved elusive.

However, one source that meets all of these criteria is becoming increasingly important: partnership marketing.

There are many variations on partnership deals, but the essential premise in all is finding marketers of consumer products / services and retailers (online and traditional) that can benefit from tying their own brands to magazine brands. Affinity between the brands is paramount in making such partnerships work for both parties, since a magazine’s primary goal is to reach likely new prospects via the partner’s customer channels, provide these consumers with a subscription offer — usually either bundled with the partner’s product / service or provided as an upsell incentive — and ultimately renew and turn these consumers into loyal subscribers.

There are a growing number of agents offering turnkey partnership solutions (mostly based online), and many publishers are tapping into these. Essentially, these agents do the resource-intensive, time-consuming work of developing partner networks / negotiating deals, matching magazines with the partners, setting up the programmes and handling fulfilment and customer service.

Using agents, of course, means paying these parties — often, a flat fee on each sub sold. So, depending on the deal with the marketing partner and other factors, each agent-generated sub may initially cost a publisher a few dollars. Still, if the subs are reasonably renewable (and conversion rates for these subs are generally good in comparison with other agent-sold sources), they can become profitable on first or subsequent renewal. Meaning that these sources may be quite viable within a given magazine’s overall source mix.

Direct-to-Publisher

However, a growing number of publishers are focused primarily on internally developed or direct-to-publisher (DTP) partnership programmes. In fact, Time Inc, Meredith, Hearst, Hachette Filipacchi Media and Rodale are among those that now have full-time staff / departments devoted exclusively to partnership marketing.

While some DTP partnership deals involve paying the marketing partner a commission on each sub sold, publishers are these days keenly focused on developing DTP relationships with companies that appreciate the other benefits they can realise from such partnerships. Namely, associating their own brands with the cachet of a known magazine brand; offering their customers / prospects a desirable value-added in the form of a subscription that is low- or no-cost to the consumer; and incentivising purchase of their product or a higher overall total-dollar product order from online customers.

DTP partnerships employing a variety of channels are flourishing. At retail, many publishers are offering on-pack / in-pack sub offers, and some who have their own magazine-branded merchandise lines realise two-fold benefits. Meredith’s Parents-branded toys in the Target chain that carry an offer for a one-year Parents sub, redeemable with the proof-of-purchase code, is one example. Other retail partnerships enable publishers to make subscription offers at the register to consumers using credit cards. Time Inc’s InStyle has such a programme with the Best Buy chain, and these subs convert to continuous service if not cancelled after the first two "risk-free" issues.

Some publishers are using live events as partnership platforms — promoting subscription offers for special-interest magazines at partners’ events serving the same interest groups (think skiing magazines at skiing events, for example).

But much of the DTP partnership action is happening through online channels. Special-interest publisher Bonnier has numerous online, as well as offline, partnerships for its various publications. In one with the producer of a large hunting / fishing event, a subscription to either Field & Stream or Outdoor Life is offered to visitors of the event-marketer’s website as an incentive to buy their event tickets online, rather than on-site at the event.

Meanwhile, numerous magazines have partnerships with online retailers in which customers are offered a special subscription offer, or a subscription at no additional cost to them if their overall product order reaches a certain dollar amount (in which case, the partner is often paying most or all of the subscription’s cost). By all accounts, these promotions, when affinity-based, are indeed producing lifts in order size for online retailer partners, while yielding new subscribers who are both profitable from the get-go and good renewal prospects for publishers.

Depending on their specifics, many partnerships yield subscriptions that are not only profitable or cost-effective, but eligible to be reported as "individual paid" on ABC statements. But partnership-generated subs reported in other statement lines — such as "partnership deductible" (those bundled with a product must offer the consumer the option to receive a refund on the sub portion, though very few consumers request such refunds) or "club / membership" — also seem to be passing muster with media buyers / advertisers. That is, at least when the affinity element is clear and such sources are not over-used within a title’s overall circulation mix.

In short, while partnerships are by no means a total solution to circulation challenges, they represent a real, substantive and growing opportunity.