A look at magazine performance.

A recent roundtable discussion and survey about association magazine publishing generated insights and numbers that can help you evaluate and improve the financial performance of your publication.

When trying to convince a prospective client to run an ad in your magazine, push the fact that it's published by an association.

What a concept.

To many association executives, this practice seems less obvious than downright foolish. But it works in a big way for advertising-packed HRMagazine, according to John T. Adams III, vice president, publications and new media at the Society for Human Resource Management, Alexandria, Virginia. The association angle - rather than the association apology - is critical to Adams in conquering the competition posed by commercial magazines in his market. "Our reps aren't selling an ad," Adams asserts; "they're selling a relationship with our national organization. We're a gateway to provide access to the members."

Participating in a roundtable held in March and hosted by ASAE's ASSOCIATION MANAGEMENT at its Washington, D.C., headquarters, Adams and four other association magazine publishers discussed challenges in maximizing revenues and managing expenses in increasingly competitive markets and considered the impact of technology on their publications. At the same time, ASSOCIATION MANAGEMENT conducted a survey of ASAE Gold Circle Award winners to collect a sampling of magazine data that further illustrate how some publishers are handling operations (see table, "Association Magazine Publishing Survey," and sidebar, "Comparing Apples and Apples").

Two roundtable participants rolled out new magazines in January. Simon De Groot, communications director of the Business Products Industry Association, Alexandria, Virginia, combined a biweekly newsletter and a bimonthly magazine to create a four-color news magazine called Industry Report, which ranges in size from 24 to 32 pages and mails twice a month to BPIA's 10,000 readers in 4,000 member companies plus 1,000 nonmember subscribers. William Adkinson, vice president and publisher, National Association of Realtors (NAR), Washington, D.C., terminated a magazine published 10 times per year and a twice-per-month newspaper and started the four-color monthly Today's Realtor - circulation of 732,000; pages ranging from 64 to 96 plus cover.

All roundtable participants have taken an online publishing plunge of some depth, including Donald Blom, CAE, associate executive director of the National School Boards Association, Alexandria, Virginia. NSBA offers a four-color print magazine of 32-40 pages plus cover, with a paid circulation: The American School Board Journal, a monthly that mails to 37,000 school board members. The association also publishes supplements, including Electronic School, a quarterly that not only is bound into The American School Board Journal but also is found on the Internet. (NSBA recently ceased publication of another monthly magazine, The Executive Educator, because of financial losses across several years; July is the last issue.)

Portions of the four-color monthly ASSOCIATION MANAGEMENT - which is circulated to 25,464 people and ranged last year in size from 96 pages plus cover to a record high of 304 pages - are featured on the Internet as part of ASAE's World Wide Web site. Elissa Matulis Myers, CAE, vice president and publisher, oversees the execution of the magazine and its electronic offshoot. At SHRM, John Adams oversees the entire Web site, which is considered a primary publication. Brand new to the site - which houses, among other information, material from the four-color, monthly HRMagazine - are daily news updates. Meanwhile, on the online front at NAR are a weekly computerized newsletter and a home page, and at BPIA, a home page.

Making money

Relationship selling. In discussing methods for increasing ad revenue, Myers takes a different twist than Adams on the idea of "relationship selling." She says that ASSOCIATION MANAGEMENT's success is coming from "our intimate knowledge of the objectives and the problems of the advertiser. I feel responsible for trying to understand their business." Myers notes that ad reps who've instead focused on developing friendships with advertisers as a means of attracting their ad dollars can have a tough time with the idea of becoming familiar with the intricacies of a client's business.

Ad reps. This can become an outside-versus-inside ad rep issue, as publishers try to ensure that the people selling their products are informed not only about client needs but association issues. De Groot, who uses an outside group to sell advertising space, says, "We try to make the reps an extension of the organization. It's up to us to educate them."

Adkinson educates his reps, all outsiders, by providing extensive market data. Citing the benefits of using outside reps - no salary, no overhead, no expenses, less administrative work, and only a commission payment - he says he has no plans to bring the sales effort in-house.

Consumer advertising. Adkinson goes on to describe "a deliberate campaign over the past three to four years to go after consumer advertising. He mentions Dodge and Chevrolet as two of his regulars. While lucrative, consumer business can be challenging, he says, because the advertisers "are used to wheeling and dealing all over the place." Still, Today's Realtor reps stick to the rate card, just as they do with real-estate-related advertising.

Advertising online. "We sold our first significant ad schedule on the [TABULAR DATA OMITTED] Web this morning," Myers reports. One or two feature stories and columns from each issue of ASSOCIATION MANAGEMENT are put up on the Web, along with the advertisers index, which hot links to an advertiser's home page - for a price. Visit SHRM's site, and you'll see actual advertisements - brief messages to click on for more information.

Controlling costs

Growth in membership. Myers describes a dilemma for her magazine that is shared by many association publishers: "When we account internally for the financial success of ASSOCIATION MANAGEMENT, we don't get to count the imputed subscription revenue that goes to the organization as a portion of dues. Now we have this escalating membership growth period, which means escalating costs for the magazine - a climbing circulation, without the benefit to the magazine of circulation revenue."

Imputed dues. While other association magazines do receive a portion of dues, these dollars don't necessarily go a long way toward balancing expenses. "The annual cost per member that goes into my expense budget from dues is $5.45, less than 2 cents per day," says Adkinson. "We make about $6 million a year in advertising, but we spend about $10.5 million; so our annual expense budget from NAR is $4.5 million. As time goes by," he points out, "they'll be giving me less and less."

Changing course. Blom's declining revenue with The American School Board Journal has led him to begin exploring dramatic changes. He may reduce the frequency from 12 issues per year to 11 and perhaps partially transform this subscription magazine into a membership benefit.

Indeed, when De Groot and Adkinson altered their publication offerings, accompanying the rethinking about readers' needs was strong consideration of rising costs. Postage and paper in particular concerned Adkinson, and these problems were reduced through the streamlining of NAR's publications. He didn't really lower costs in these areas; rather, he avoided even higher expenses due to anticipated increases in postal rates and paper costs.

Staffing. One area in which Adkinson did not cut back, however, was staff. While he now produces one publication, not two, he argued successfully for maintaining the same size staff because the new product he created after scratching the former two requires the same number of hands to meet the tougher quality objectives. "For example, with the new magazine, we're stressing interactivity," Adkinson says. "We've got interactive phone lines and a home page and all that good stuff, in an attempt to get avid readership. . . . We ask our readers, 'Have you got something to say?' Well if 189 Realtors respond, someone's got to sit and listen to 189 recorded messages, and that takes time. And we didn't do that before."

Technology-driven change

Discussions of current magazine performance inevitably shift to talk of the future. Adkinson is focusing on the fact that "we are information gatherers and processors. We happen to deliver the information now in the format of a glossy magazine that comes out 12 times a year and goes through the U.S. post office, but that's just the vehicle now. It's a good vehicle today, but I'm not sure that it will be five years from now."

Adams takes the thought a step further: "The Internet is just as big as the printing press. It's bigger than television, because it's interactive, and it's bigger than radio. I don't think that there's any way that you can possibly underestimate the effects that it's going to have on society in general and on how associations work." He poses a question that presents a challenge to publishers: "If you can log on and get whatever information you need - instantly, on your desktop, from whatever source is available whoneedsan association?"

RELATED ARTICLE: Comparing Apples and Apples

Developing the "Association Magazine Publishing Survey" table that begins on page 57 was not the straightforward task that the editors of ASSOCIATION MANAGEMENT had expected. In our determination to come up with valid, comparative data that would benefit our readers, we discovered that even professionals in the same discipline don't always speak precisely the same langnage.

Take our question "What are your manufacturing costs per page?" for example. Here we found that the definition of manufacturing costs varies widely from one publication to the next and describes items, such as paper and trim size, which are themselves enormously variable.

Thus, even when we thought we were controlling for uniformity of responses, and hence comparability, we came to see that the results of the comparisons aren't necessarily easily understood or explained. Nonetheless, with the help of the footnotes at the bottom of the table, we believe you now have before you a table of information that can be valuable in helping you compare the financial performance of your magazine and its operations against a sampling of your peers.

Still, it wouldn't surprise us if the table raises almost as many questions as it answers. And that's where you come in. Tell us, were you able to use this table to compare your magazine's performance with others? What kinds of issues did the comparisons raise? What measures do you usually use to benchmark your magazine with others? How do you set standards of financial performance?

We'd also appreciate your suggestions for ensuring that the "Association Magazine Publishing Survey" table really does compare "apples with apples." In your opinion, what other variables or factors ought to be taken into account?

ASSOCIATION MANAGEMENT has set up a listserv to encourage discussion of the issues in this article. If you would be interested in participating, send an e-mail to [e-mail] and we will add you to the list. Or you can write or fax your comments to Editor, ASSOCIATION MANAGEMENT, 1575 I St., N.W., Suite 1150, Washington, DC20005-1168; [phone].

RELATED ARTICLE: Key to Survey Respondents

* The American School Board Journal, National School Boards Association, Alexandria, Virginia

* AORN Journal, Association of Operating Room Nurses, Denver

* ASSOCIATION MANAGEMENT, ASAE, Washington, D.C.

* California Schools, California School Boards Association, West Sacramento

* Carolina Alumni Review, University of North Carolina General Alumni Association, Chapel Hill

* On the Internet, Internet Society, Reston, Virginia 

* Prime Times, National Association for Retired Credit Union People, Madison, Wisconsin 

* Progressive Rentals, Association of Progressive Rental Organizations, Austin, Texas

* School Foodservice & Nutrition, American School Food Service Association, Alexandria, Virginia

* Sonoma County Physician, Sonoma County Medical Association, Santa Rosa, California 

* Today's Realtor, National Association of Realtors, Washington, D.C.

Gerry Romano, CAE, is senior editor of ASSOCIATION MANAGEMENT.