Because it's difficult for publishers to have control on the newsstand side, subscriptions offer much more innovation for targeting readership, says Chip Block, vice-chairman of USAPubs and publishing strategist at Ziff Davis Media.
Some publishers "have been very successful on the Web," says Mr. Block. "Magazines like Rolling Stone, Sports Illustrated, Maxim, Men's Health, Fast Company and U.S. News & World Report have all generated large numbers on the Web."
"Most survey respondents see a 50% increase in Internet-sold subscriptions in 2000 over 1999," states CircTrack 2000, published jointly by Capell's Circulation Report and research company Erdos & Morgan.
One launch that generated large numbers of initial subscriptions on the Web is Time Inc.'s Real Simple. Having debuted in April, Real Simple is doing well enough to boost its advertising rate base from 400,000 to 700,000, effective with the February issue.
"An important part of our success is how we reacted so quickly to the fact that subscription agents are not nearly as significant as they used to be," says Circulation Director Steve Sachs.
"When we originally put together the business plan 18 months ago, they were still important parts of the business," he says. "We built on that particularly because Real Simple targets women; historically, subscription agents have had huge success with the female audience."
Real Simple's initial marketing efforts centered on two arenas: the Web and other Time Inc. properties. "We ran a hugely successful ad in Teen People on Mother's Day with the tagline `Give a gift to your stressed-out mom.' It did surprisingly well," says Mr. Sachs. "We also did cross-promotions with HBO's release of `Sex and the City' on video and DVD, and promotions through Time/Life music. Time Inc. spent $13 million on Real Simple's initial marketing effort, all done in-house.
BIG SHIFT IN 18 MONTHS
"In addition to direct mail, in-house and Web strategies have become our two most important marketing channels for the magazine," says Mr. Sachs. "A year and a half ago neither existed. Our partnerships have had to be more creative than ever because of challenges to the subscription market."
"Selling subscriptions on the Internet has major long-term potential," says Chris Little, president of Meredith Corp. Publishing Group. "We're now in the first year of a three-year circulation plan; our goal in the third year is to sell 750,000 subs annually on the Internet."
A big advantage to Internet servicing, Mr. Little says, is that companies can turn over feedback quickly. Testing the success of a new campaign on the Web, such as offering free e-mail newsletters, surveys on subject matter and service, generates rapid response via e-mail.
Increasingly, magazines are abandoning the paper trail and going electronic in terms of subscriptions and customer service. Synapse Group says it is proving the viability of continuous service, in which subscriber maintenance is done through automatic charges on credit-card statements.
Synapse's online subsidiary, magazineoutlet.com, is on top of the fast-growing venues providing nationwide magazine subscription programs through the Web; at 25,000 titles, it offers more magazines than most any other online retailer, with the first two months risk-free.
DON'T ALWAYS PAY OFF
These risk-free options, however, don't seem to pay off for everyone. David Berger, Internet marketing manager at Hearst Corp., finds subscriptions more successful when generated from the publisher's own sites.
"While we've been working with some circulation agents online, we're not stressing those outside agent deals that offer risk-free trials, because those audiences are really looking for free samples," says Mr. Berger. "The pay-up is simply not worthwhile."
Another significant new source for subscriptions is emerging in partnership marketing, which involves selling subscriptions in combination with other goods and services.
Time Inc.'s partnership with Ticketmaster is a prime example, in which customers purchasing tickets over the phone will receive offers for Sports Illustrated or Entertainment Weekly subscriptions.
Industry buzz also has pointed to innovative circulation techniques initiated by Diane Potter, senior VP-consumer marketing at Gruner & Jahr USA Publishing.
`YM' PROGRAM CITED
"We've gotten excellent results on newsstands this summer, when we brought YM to travel plazas where teen-agers would be traveling with their parents," says Ms. Potter. "We created a special fixture to grab their attention, and we were rewarded with a 50% lift in sales on the newsstand."
Gruner & Jahr has been active with advertiser partnerships. Special magazine displays in drugstores will cross-reference teen-agers to products, and vice versa.
Meredith stresses its most important circulation strategy remains direct mail. Its 2000 fiscal year pulled in $8 million over the previous year's revenue, and it attributes this in part to maintaining as direct control as possible over subscriptions.
CircTrack 2000 reports the average industry direct mail volume has increased almost 15% over the last three years.
Dan Capell, executive director of CircTrack 2000 and editor of Capell's Circulation Report, predicts that the industry will see a significant lowering of rate bases in the year ahead, due in part to the decline of sweepstakes.