People, for its ad page and circulation growth this year, topping an already strong performance in 1996, was a natural for consideration as this year's Advertising Age Best Magazine of the Year.
But when those gains are weighed alongside a gutsy decision to move its newsstand delivery date and simultaneously launch two new brand extensions, Advertising Age could point to no other title that so deserved 1997's Magazine of the Year honor.
FEEDING THE CULT
The weekly magazine has proven astute at feeding America's fascination with the cult of personality. The formula of covering celebrities and ordinary people doing extraordinary things holds wide appeal, especially at the newsstand. The fact that People delivers more than 3 million copies to readers every week 24 years after its launch is remarkable considering how the media landscape has changed.
When People launched, "Entertainment Tonight," "Access Hollywood" and E! Entertainment Network did not exist.
People, however, found a way to combat TV competition on TV's own turf. This last year, the weekly raised its profile by exploiting its joint alliance with "Dateline NBC" to produce segments based on People stories.
People has continued to expand franchise issues, such as "The 50 Most Beautiful People," "Best & Worst Dressed," "Oscar Fashion" and "Sexiest Man Alive," under Managing Editor Carol Wallace, promoted last April when Landon Jones moved to a corporate-development post. Such franchises have been turned into revenue boosting double issues with increased rate bases of 3.6 million.
Ms. Wallace also oversaw People during a year chock full of widely covered news events that played to People's particular editorial strengths: the murder of Gianni Versace, Ellen DeGeneres' coming out, Seinfeld quitting his TV series, the wedding of John F. Kennedy Jr. and, of course, Princess Diana.
23 YEARS OF INCREASED PROFITS
While People has managed to tap the cultural zeitgeist editorially, it has done so with the backing of a solid business team. One of the team's most noteworthy achievements: It turned in the title's 23rd year of increased profits. People is the industry's most profitable magazine, making more than $200 million a year. Not bad for a magazine once deemed unworthy of Henry Luce's tradition of journalism.
People has since proven it deserves its place in New York City's Time & Life building as much as any other title. The two latest launches of Teen People and People en Espanol are in line behind two other notable People spinoffs that stand on their own: Entertainment Weekly and the skyrocketing In Style.
FOURTH IN AD PAGES
Ad pages for 1997 totaled 3,998.89, up 7.8% from 1996, ranking it fourth-highest in the industry, with the largest growth among the top four. People ended the year with a revenue gain of more than $62 million. To put that figure in perspective, of the 217 consumer magazines measured by Publishers Information Bureau, only the top 53 even topped $60 million in total ad revenue for the year.
The growth, says People Publisher Nora McAniff, was not from any one category.
"We concentrated on gaining share of market across all our categories," she says. The title made inroads this year with image advertisers, such as Estee Lauder Inc., and high-end cars such as Ford Motor Co.'s Lincoln Navigator.
"More and more marketers are realizing that over and over again they are talking to the same consumer, and they realize they have got to shake it up ... Advertisers recognize the power and strength of the franchise; they see how strong it is, and when something is a winner, people want to affiliate with a winner," says Ms. McAniff.
Says Mira Fein, media director at Kirshenbaum & Bond, New York, "People is an incredible franchise. It's one of the few magazines that no one wants to sell against when we're asked by another title who else we are considering for a buy. We joke that it is the power of People, but it really is true. It's a powerhouse."
The People editorial formPeopleula has translated well to two new brand extensions. People en Espanol, which had four test issues in 1997, launched this year as a monthly with a 170,000 rate base, making it instantly bigger than any other Spanish-language title distributed in the U.S. Teen People, which had no test issues, received more than 250,000 subscription requests in the first three weeks and is guaranteeing a rate base of 500,000.
"One of the things I look for in brand extensions is something that adds value to the core brand in some way, and that goes beyond being a business in itself," says People VP Jeremy Koch. "Teen People reflects back in a positive way on People, and brings younger readers into the magazines. People en Espanol also serves a strategic purpose in that it creates a platform for us to learn about publishing for this market. We are creating an expertise in Spanish language marketing that can be extended within Time Inc."
The spinoffs are smart moves in that they target growing demographic groups that currently both number at 29 million, notes People President Ann S. Moore. The number of teens and Hispanics are expected to grow significantly as a percentage of the U.S. population after 2000.
Ms. Moore has high hopes for the newest little sisters and believes either one of them could break In Style's record of achieving profitability in three years. Two more ideas are already bubbling on back burners, she says, ready to go once these two find their footing.
SWITCH IN DELIVERY DAY
The most challenging undertaking this year, however, was the seemingly simple idea of switching the day of delivery from Monday to Friday. The move to pre-weekend delivery, says Ms. Moore, was "one of the most significant and hardest things we've done."
The decision to switch to earlier delivery affected far more than just the People staff. The move required revised printer contracts and negotiations with other Time Inc. titles, such as Entertainment Weekly, to move their schedules. Also, distributor contracts had to be renegotiated during a year when the newsstand network was undergoing wrenching consolidation and changes.
Only a top-selling title like People could convince the newsstand market and the rest of Time Inc. to be so accommodating.
The payoff is that the latest copy of the magazine is available for the weekend, when consumers have time for leisurely reading. Markets where pre-weekend delivery was tested saw single copy sales increase dramatically, in some cases as high as 36%, says Ms. Moore.
"We kept retesting it to make sure it wasn't a complete fluke because we just couldn't believe two days could make such a difference," says Ms. Moore. The rollout of markets receiving early delivery is still going on, with about 50% of the targeted markets now receiving copies by Friday.
Even with only half of the markets receiving fresh copies on Friday, the second half newsstand numbers reflect an increase. For the full year, total circulation was up 4.6% to 3,608,111, with newsstand sales up 7.4% to 1,547,160. By mid-year, all of the markets targeted for early delivery should be on board.
Discovering that delivery time could have double-digit growth impact on People's business made Ms. Moore reevaluate previously held assumptions about continuing to do something "just because we always have," she says. "The world has changed. We were out of step with our readers' lives, and we needed to change to be ready to go forward."
Another indication of the strength of the People brand is the price readers are willing to pay for a year's subscription, which will be even higher in 1998. People who need People are going to have to pony up $102-plus this year to renew their subscriptions. That's a price point not many magazines would be willing to breach, given the industry average for weeklies hovers around $50.
People, which has been delivering a bonus of on average 304,000 copies a week, also decided this was the year to raise its rate base to 3.250 million from 3.150 million in January, the first increase since 1991. Full-year subscription sales were 2,060,951, up 2.6%.
"It's very thrilling to realize that we can move this big ship to double-digit increases," says Ms. Moore. People's experience with brand extensions and reengineering its operations offer "lessons all sorts of businesses can learn from ... even powerful brands, even the best brands can get off target. Nothing remains static and you have to stay in sync with your customers."
Copyright February 1998, Crain Communications Inc.