FORUM: FOLLOWING THE RULES FOR GROWTH: EXPANDING OVERSEAS TAKES BOLD MOVES AND ADAPTABILITY FOR LOCAL MARKETS

By Published on .

Most Popular
Right after acquiring Ziff-Davis, Masayoshi Son stunned the world a second time with his ambitious plans: He claimed Ziff-Davis would grow from 80 to 1,000 titles in the next 10 years.

Such spectacular international expansion is comparable to what Patrick J. McGovern, chairman of International Data Group (and Ziff-Davis' main competitor), told Business Week last year: "Since 1990, overseas forays have helped IDG grow from $550 million to $1.4 billion in annual revenues."

This clearly illustrates Rule #1 of overseas expansion: Do it now or somebody else will. And, while what follows is drawn from the magazine world, the lessons apply to other industries as well.

An illustration of the rule is Gruner & Jahr's network of "people" magazines in Europe, including Hello! in the U.K. and Gala in Germany and France. Although it owns the extremely successful People in the U.S., Time Inc. missed its window of opportunity and may not be able to replicate such a success in Europe: The moment has passed.

Rule #2: Communicate in the local language. Once upon a time Newsweek and Time could be sold with just a few minor changes to fit the European, Asian and South American markets. Those times are long gone: The local press is now excellent in most of the world, and magazines must be published in the local language to attract a strong readership.

Rule #3: Adapt your brand to each market. Playboy, Elle, Marie Claire, Vogue, Cosmopolitan and Premiere are all extremely successful titles worldwide. Indeed, educated readers around the world know enough English and French to understand the meanings, obvious and hidden, of such words. However, your brand name may not fare as well and you may need to follow Reader's Digest's example.

Founder DeWitt Wallace sought to keep it recognizable worldwide while being understood by local readers. It now has 48 editions in 19 languages, all published under titles expressing the main concept of the magazine, ("The Best Of"): Das Beste von Reader¹s Digest in Germany, Het Beste van Reader's Digest in Holland, etc.

Rule #4: Be aggressive! European publishers are more daring in the acquisition field than American counterparts: They often buy market share by acquiring companies outside their home countries, including in the U.S.

Rule #5: Do your homework! Demographic and economic data are of the utmost importance in planning. When Wired pulled the plug on its U.K. edition last February, the official reason was the difficulty of finding a local partner. The truth may be that a magazine with such high production costs may not possibly reach break-even in a small market.

Rule #6: Ad Directors: Think local! Groupe Marie Claire of France opened in 1985 an international ad sales office in Paris to sell pan-European and pan-Asian deals. Last year, it sold fewer than 200 pages out of 20,000 in all 28 editions of Marie Claire. This shows that a mythical advertising synergy should not be the reason to launch consumer magazines abroad. Most global consumer advertisers remain decentralized and select media locally.

Rule #7: Never launch an untested brand in an unknown market. Local subsidiaries should be well established in their market before launching a title that has not been tested elsewhere. Hachette Filipacchi's U.S. subsidiary was already a major player in the U.S. media marketplace before it considered launching George.

Rule #8: Leave them alone. Local teams should have a lot of freedom, especially on the editorial side. The fact that a brand is extremely well positioned in the U.S. market does not mean it will be well perceived abroad. Examples of excessive editorial and managerial control are numerous.

Rule #9: But keep an eye on them! The quality and overall positioning of a brand should be consistent here and abroad. Local editorial teams should report to an international editor in chief who will check all tables of contents and major features.

Rule #10: Learn from international operations. If overseas editors and managers are talented (and they should be!), they will teach quite a few tricks to the home team.

Rule #11: Think big! International publishing can be very big business. The top five French women's magazines are actually owned by German and British publishers. (Quel scandale!) Similarly, five of the top 10 British women's magazines are owned by non-U.K. publishing companies, including Hearst's subsidiary (with its Good Housekeeping).

Rule #12: Look at the bottom line! International expansion can have an impressive impact on the bottom line: for instance, Reader's Digest Association now makes more money in Europe (both in revenues and in operating profit) than in the U.S.

Mr. d'Allant is president, Planet Media, New Brunswick, N.J., an international

In this article: