‘DAILY CANDY’ BIGGEST FISH IN E-ZINE POND

Happy Talk Keeps Readership High

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YORK, Pa. (AdAge.com) -- You’ll never get bad news from a DailyCandy e-mail. The coast-to-coast surveyors of what’s happening and hilarious see no need for bringing readers down. “We never write negative articles,” said CEO Pete Sheinbaum. “Not because we want to sugar coat everything, but if something is bad, why would we write about it?”

Indeed. Its formula of happy but cheeky style and wit works just fine for the readers of its 1.2 million daily subscriptions. That tally comes from 10 daily city editions and three weekly specialty e-mails. Women -- and it is a 92% female readership -- enjoy the frank and funky 150-word one item per day missives. And so do advertisers. Companies including Mercedes, Adidas, Lancome, DeBeers and HBO have bought ads on the daily e-mails or paid extra for dedicated e-mails sent up to four times a month to all subscribers. Cost-per-thousand rates are pricey at $280 for the dedicated e-mails, and ranging from $30 to $100 per thousand for ads inside the e-mails.

Other e-zines also find readers
DailyCandy is the big fish in the lifestyle trend e-mail magazine pond, with smaller competitors such as Flavorpill (weekly with 250,000 subscribers in five cities plus themed-editions) and Juli B (twice weekly with more than 30,000 subscribers in three cities plus three themed-editions).

And even though e-zines have been around as long as the Internet, advertising interest is still growing. According to online researcher Marketing Sherpa, 42% of advertisers with more than five years of e-mail experience plan to increase their advertising spending in newsletters this year.

Total e-zine spending should reach $250 million this year and will likely climb to $273 million by 2010, said Jupiter Research analyst David Daniels.

“Sponsorship in newsletters is a viable acquisition and branding tool, especially considering that the active e-mail user audience continues to grow,” he wrote in an e-mail interview.

’Candy’ a hit from the start
DailyCandy began with Dany Levy, a former writer for New York magazine and Conde Nast publications (she helped build the prototype for Lucky) who decided to start an e-mail newsletter about cool and undiscovered things in New York, conveyed quickly and with a dollop of attitude and irreverence. Mr. Sheinbaum met her through a mutual business friend and signed on to help for “a few months.”

But by the end of the first week, the New York newsletter had 700 subscribers, and by the end of the first year 35,000. Cities were added -- Los Angeles in 2001, followed by Boston, Chicago, San Francisco and others -- and specialized editions were crafted. DailyCandy Kids launched in 2002 and a nationwide version of DailyCandy appeared in 2003.

Mr. Sheinbaum eventually moved from Colorado to New York. And the group hired a stable of editors, fact checkers and support staff. It also picked up millions in investment capital from private equity firm Pilot Group, a company founded and managed by former America Online President Robert Pittman. His involvement raised DailyCandy’s profile, and more recently, triggered rumors of a sale. Mr. Sheinbaum declined comment, but a Wall Street Journal article claimed Mr. Pittman’s original controlling stake of $3.5 million in 2003 could be worth as much as $100 million today.

Keeping it local
Today, native city editors (DailyCandy generally hires home-grown writers and style spotters in each location) report to headquarters where editors meet to toss around ideas and shape each edition.

“The audience we have grown, that DailyCandy resonates with, is incredibly voracious, but also -- and I think this may be a female thing, although I hate gender stereotypes -â€" passes things on to their friends,” said editor at large Dannielle Romano. That word of mouth buzz and brand engagement do more for DailyCandy’s popularity than any ad campaign ever could. (Besides house ads on its own pages, the company uses no paid advertising.)

She summarized the editorial appeal, saying, “It’s like the friend you e-mail every morning. We write about what we love.”

And just what do they love? Some recent DailyCandy Everywhere (the national version) e-mails included blurbs about the “Kisses” urinal (in the shape of a red-lipped open mouth); First-Class Cookies (homemade goodies in a travel tote packaged by pilot Capt. Wayne); and actor Steve Buscemi T-shirts (his visage in a heart with XOXO and his signature underneath).

And soon there will be even more love to share as DailyCandy readies the debut of its first book, “DailyCandy A to Z: An Insider’s Guide to the Sweet Life,” April 11.

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