Case study:
How Runner’s World won
the circulation war against EMAP
Profiting through Internet promotions
Why marketing must come from the top
down
This is an extract from the
Subscriptions Strategy newsletter issue 71. Join today and download the fully illustrated issue in the members-only
section.
Dear Colleague,
Designing your product for
profit first and people second will probably leave you with neither.
The most successful publications I have worked
with were launched to bring together a community. That was their primary
motivation. It also happened that there were businesses who wanted to reach
that community and were willing to pay for advertisements and sponsorships.
And so the money rolled in.
Runner's World paid circulation
Runner’s World is a magazine that
serves a close and dynamic community. The men and women run together, they
think in similar ways, they socialise in groups, compete against each other,
and spend lots of money on running shoes, gear and charity sponsorships. Runner’s
World is the glue that holds that community together, through its print
edition and the Internet.
Runner’s World is managed by NatMags in
the UK and, believe it or not, the company has on its team one of the best subs
marketers around – he ensures Runner’s World stays ahead of all other
athletics magazines.
The magazine has a fine heritage: it was
launched as Running magazine in 1982 by the UK’s foremost subscriptions
marketing expert Sylvester Stein, then chairman of Stonehart Publications. That
was before the market for running gear had opened – and the magazine struggled
for a while until advertisers such as Nike and Adidas caught up. So the title
existed mainly on subscription revenue. Personal delivery through the mail
seemed to suite the typical runner.
In this issue of Subscriptions
Strategy, we look at some vital marketing fundamentals. Sadly, some of our
biggest and most active publishing companies overlook the most important one:
the momentum for
marketing must come from the top.
Peter Hobday
Editor
How
successful specialist magazines sell subscriptions
The marketing philosophy
behind Running magazine was unique in its day and has been kept alive
and in fine health through new owners. The magazine was bought by Rodale, an
American company built on direct marketing skills. It was renamed Runner’s
World, the name of Rodale’s counterpart magazine in the States.
Rodale USA is a leader in direct-response
marketing and has more than 26 million active customers in its database. You
can see how they sell subscriptions here:
http://www.runnersworld.com
The UK site uses similar tactics:
http://www.runnersworld.co.uk
Runner's World is managed in the UK
though a joint venture company, NatMag-Rodale Ltd. Each party has a 50% stake.
Steven Seaton, the publisher, is responsible to the joint venture board.
Runners’s World now boasts 58,881 subs
sales out of a total ABC of 88,567.
To put that in financial terms, those
subscriptions bring in an annual revenue of around £1 million.
How Running
magazine took on Emap
Back in the 80s, Running’s
main competitor was Today’s Runner, launched by Emap to cash in on
lucrative new advertising from running shoe manufacturers, race organisers and
charities looking for sponsors. Emap (now owned by Baur) knows all about
launching into specialist markets – that is where the company’s major skill
lies – and it will usually overwhelm competing titles and take market
leadership.
Emap has the advantage of
owning its own newstrade distribution arm, which provides considerable market
intelligence and distribution leverage with newsagents. Running, a small
independent magazine, was up against a competitor with huge resources –
resources in terms of money, personnel and distribution clout.
What Emap lacked was two vital things:
marketing skills and the ability to recognise the problem.
Emap should have been able to take market
leadership and capture most of the vast advertising revenue. That was its aim,
but on this occasion it all went wrong. Today’s Runner never found its
feet.
Why Emap
failed with Today’s Runner
Why did Emap fail? Why was
such a huge and successful company unable to take market leadership from
Stonehart, a tiny one-magazine publisher?
Running prospered because Emap could
not understand nor match its subscriptions marketing. Emap’s fundamental
problem was one that also affects other big publishers:
Emap viewed subscriptions as a liability,
not an asset.
Viewing £1 million income a year as a
liability in a company’s accounts would puzzle any business person. Of course a
publisher must account for the costs of fulfilment: there are always costs
involved in delivering a product. But to regard fulfilment costs as the
over-riding item on a balance sheet is rather like a farmer regarding straw as
more important than cow’s milk.
For a title to build 66% of its circulation by
direct marketing shows just how effective an intelligent marketing approach can
be. When Emap launched against Running magazine with Today’s Runner, it
simply didn’t factor in that the magazine’s readers preferred to subscribe nor
the value that subscriptions bring to a magazine’s long-term profitability. As
a consequence, it focused on newsstand sales and its (quite lively and
colourful) title languished.
After a while, Emap lost faith in Today's
Runner and repackaged it as Running Fitness in an attempt to broaden
its appeal from the more traditional running magazine that it was perceived to
be. It was passed on to another company and currently no circulation figures
are published for the magazine.
The value of
subscriptions marketing
Through subscriptions
marketing, Runner’s World:
Became the enormous revenue owner it is today Overcame competition from a mighty rival Built circulation from around 30,000 to 88,500 Currently dominates its market
These days, Runner’s World’s Steven
Seaton doesn’t need to worry about other publishers launching against it:
“The competition is not necessarily direct from the likes of Running
Fitness but from bigger titles that would take our newsstand space. As a
consequence we prioritise subs over newsstand, which is why nearly all our
sales growth has been in subs while newsstand goes up and down.”
Originally Running grew its lucrative and protective
subscription base through press advertising and direct mail, but Seaton
explains that today’s market has changed – Runner’s World now finds
direct mail is not cost effective.
Runner’s World’s main activity is now
on-line, through its website and with partner websites. It sends out a constant
stream of emails to those who sign up to its free newsletter service. The emails are mostly editorial updates rather
than straight promotions (which are generally more effective subs-getters). E-mail
promotions are sent out, but generally
no more than twice a year.
Runner’s World could be more aggressive with pop-ups or roll-overs
but Seaton feels those are not in the best long term interests of the data
base.
Some direct mail goes out to runners through
race organisers, in goodie bags etc. But that is becoming less effective than
the Internet. Also, as is usually the case, the effort put into subscriber
retention is far more cost effective than new acquisition.
Typical newsletter
subjects include:
Regional events updates Marathon training newsletter - Week 1 to Week
12 Worldwide races index Races of the year Spring running shoe guide Heroes of running, personal best awards,
healthy-eating secrets Win a Gore travel kit Set a personal best every week
Why
marketing must come first
The people in NatMags’
marketing department work across all titles, rather than specifically on Runner's
World. The subscriptions marketing strategy comes from Steven Seaton and
the marketers execute it. That focus means the subscriptions base for Runner’s
World relative to overall sales is the highest of all NatMags titles.
This underlines a common principle for
publishers: the momentum for marketing must come from the publisher and
managing director. Most of the marketing principles used to grow circulation
for Runner’s World could be transferred to other NatMag titles, but
without encouragement from the managing director it’s unlikely to happen.
Successful Running
and Runner’s World promotions
Here are some examples of
how Running magazine and Runner’s World built 58,881
subscriptions and an unassailable lead in the market.
Total average net circulation per issue: 88,567
Newstrade and other single copy sales: 29,686
At basic cover price (BCP): 28,262
Below BCP but not
less than 50%: 1,424
Single copy subscription sales: 58,881
All illustrations are contained in issue 71 of the
Subscriptions
Strategy newsletter. Download in members-only section >>>