Hearst UK’s marketing and distribution strategy for flagship women’s monthly Cosmopolitan has had impressive results since being introduced last autumn. Which is why the company’s marketing and circulation director Reid Holland has turned his attentions to other titles in the portfolio to apply some of the lessons learned.
“The two greatest circulation challenges are value proposition and reach,” he says. “With print revenues in decline, short term cost savings at the expense of editorial content can damage value perception and undermine consumer satisfaction. What publishers can't stop doing is presenting their customers with a strong product each month.”
With unprecedented competition across every platform for consumers’ attention, meanwhile, content providers must work harder than ever even just to stand still. “What magazine publishers can – and must – do, however, is think more carefully about the strategies they use for distribution,” Holland adds.
“Hearst is 100 per cent supportive of the traditional publishing model of newsstand plus subscriptions and still believes firmly that all the players within those supply chains are absolutely the industry’s life blood,” he quickly continues.
“But you can’t sit back and hope readers will come. New routes to market are critical. Whether paid-for or free, they are essential to develop to get your title into new readers’ hands. And if they get you into the hands of the right reader, advertisers will value these new routes to market just as much as traditional ones.”
He is talking about Cosmo, the first title in Hearst UK’s portfolio of 24 brands – nineteen magazines, five pure-play digital - to which he applied a marketing and circulation re-think following a root and branch re-structuring of his department a year ago.
Restructure
“Until 2015, marketing and circulation was one department with two teams – newsstand and subscriptions – working in separate silos, employing different types of people with different skills from different backgrounds,” explains Holland, who arrived at the company with the acquisition of Hachette in 2011.
Now responsible for all Hearst UK’s consumer revenues – newsstand sales, reader subscriptions and commercial consumer revenue (where a commercial partner buys magazines to distribute to their own customers), he has held his present role since 2013.
“Some people in the department thought just about retail, some just about subscriptions. And within subscriptions, some focused on acquisition and others on retention – even though acquiring the wrong people can make retaining them harder,” he continues.
“I was the only person really thinking about customer and brand across all different marketing and distribution channels. And it was clear to me that this had to change.”
The question was: how best to structure the 25 to 30-strong marketing and circulation department to maximise performance? The answer was to break-down traditional silos and re-weight core specialisms and skills.
Half of the staff were moved into a new commercial team in three brand-focused clusters, each overseen by a head of consumer sales and marketing. These platform and channel neutral business managers were formerly circulation managers – a standalone role and dedicated discipline that no longer exists as the business works closely with COMAG.
Remaining staff were moved into two other teams – an expanded digital marketing team and operations.
The digital team’s brief is delivering annual subscription volume across Hearst UK’s entire portfolio. It does so using owned and bought digital media to maximise traffic into the business’s ‘sales funnel’. By better understanding audience web behaviour, it optimises performance of Hearst UK web pages. It also oversees the business’s e-CRM engagement-building programme.
“The aim was for everyone on the commercial team to work all routes to market in the UK and overseas, print and digital, paid-for and free,” Holland explains. “Meanwhile subscriptions moved centre-stage to sit very much at the heart of everything we all now do.”
To reflect this departmental re-balancing, the marketing budget was also re-apportioned.
“Three years ago, we spent a large amount of our marketing money on traditional newsstand sales promotional tactics, supported by retail spend,” he continues. “Today, we have an almost equal split between retail, sales promotion and subscriptions marketing with subscriptions’ share having grown at the expense of sales promotion.”
In short: it’s now all about targeting – identifying and reaching the right consumers, then building a lasting relationship with them which, hopefully, will lead to more annual subscriptions as appropriate to each specific brand’s business model. Which leads us to Cosmo.
New strategy for Cosmo
Declining sales had been a problem for a while. Meanwhile, despite highlighting love for the brand, reader feedback questioned its value proposition - in short, what they were getting in exchange for their money when considered against rival titles delivering more pages for a lower price.
“Within our portfolio, middle and mass market titles are well-served by the traditional publishing model of newsstand sales and subscriptions. But the younger generation end of the portfolio (where Cosmo sits) and also the more affluent end (occupied by Harper’s Bazaar and also Elle, which sits between it and Cosmo) are somewhat less well-served, so we are working to do more,” Holland says.
“On one side of Cosmo sat a stack of weeklies at a fraction of the price. On the other were monthlies regularly cover-mounting and price-cutting. It’s an expensive circulation model, and a slippery slope manifesting itself in advertising decline. Discussions were had within Hearst at the highest level. And the conclusion was that no amount of tweaking the existing model would turn it around.”
He adds: “It was a game change moment. We had to be ambitious.”
Hearst UK did two things. It invested in content with a new editor, Farrah Storr, appointed to oversee what it described as Cosmopolitan’s “next phase”. And it “significantly” increased the title’s marketing budget then sanctioned Holland and his team to spend it in a decidedly non-traditional way.
The focus was on driving Cosmo forward as an impulse buy with the right readers: new, young consumers likely to repeat purchase and, ideally, subscribe. Lowering the cover price from £3.80 to £1 was one way to do this. Creating new routes to market was another.
“We increased spend on the newsstand, putting it at every check out we could get our hands on. And we took the magazine to places where the target audience is. That audience doesn’t spend much time in a supermarket or a train station or WH Smith, but at places where it wasn’t traditionally easy to buy a magazine. We needed to address this,” says Holland.
So, with the new look introduced last September, Hearst UK began distributing Cosmo free and en masse at selected music events, movie showings and shopping malls. Smaller numbers were also made available free at other non-traditional outlets, such as gyms.
In addition, copies were sold to commercial partners for free distribution to their customers. Lloyds Bank, for example, struck a deal to buy Cosmo to distribute free through its Club Lloyds programme. Other partner distribution deals are now in development.
For the past nine months, up to 100,000 issues a month have been distributed free - capitalising on the Sample Free Distribution category recently introduced by ABC. Some might call the latter element of this mix old-fashioned bulk sales, but not Holland.
“We need to change the language when we talk about free distribution – this is not bulk sales,” he insists. “This has been about spending our marketing budget in a different way that allows us to be more targeted than if we spend on free supplements and cover mounts.”
The results
As a result, Cosmo enjoyed a 57.3% year-on-year increase in sales for July-December 2015 with combined print and digital sales of 405,308 – of which actively purchased copies were 287,964 (up 45% YoY), according to ABC. It was a very different story in the same period a year earlier with average print and digital sales of 257,725 (down 9.9% YoY), and actively purchased copies totalling 198,502 (an 11% YoY fall).
“We absolutely hit home. And we will continue to grow, no question”, Holland says.
Contrary to Hearst UK’s wider portfolio strategy, subscriptions are not a major focus for Cosmo given its reduced cover price. In fact, newsstand sales’ share of paid-for circulation for the brand rose from around 80% before the new strategy to around 85% post. But the lessons learned are now making waves across the business.
So, Elle is now being sold to commercial partner Look Fantastic for free distribution as part of its monthly beauty box to young women subscribers. This summer, meanwhile, Harper’s Bazaar is being distributed free at selected special events such as Badminton and the Chelsea Flower Show.
It's all about finding the right consumers for each brand most likely to become regular readers and, ultimately, subscribers.
“What we want is sustainable and long term growth and that comes through building loyalty,” Holland explains. “And we are working hard not only to reach the right consumers and get them to sample the titles, but to build a dialogue with them, harvest their data and market directly to them to sell them single copies or a sub.”
It’s a marked change in approach dependent on a set of skills that’s very different from those needed just a few years ago. Even so, Holland is wary of resting on his laurels.
“This job is a bit like that of a musical conductor – my role is to know what skills my department and the wider business need,” he confides. “But just because the skills you have are right for now doesn’t mean they will always be. Consumers are changing all the time and this will only continue. The challenge is to keep up, and to keep responding accordingly.”
