Association publishing evolves.

In the past decade or so, associations have leapfrogged from typewriters, to computers, to the Internet. What else has changed? Look to ASAE's new publishing study for answers.

Holy typewriter. Association publishing sure isn't what it used to be. Technological, demographic, and economic realities have forever altered the way in which associations communicate with their members and other constituencies.

ASAE's new Association Publishing Operations study examines association publishing programs - including both periodical and book publishing - in detail, exploring circulation, inventory, advertising, staffing structures, production, technology, finances, and more. ASAE conducted a similar study in 1989 entitled Association Publishing Procedures. Perhaps a sign of the times, it addressed only periodicals publishing.

The new survey's results, which are based on the responses of 333 members, provide the answers to many commonly asked questions, including the following.

Why is it difficult to compare association publishing operations?

Would that a rose were a rose. This study demonstrates that associations that publish make widely different choices about the allocation of expenses - most particularly about allocation of overhead and labor. Consequently, what may seem one association's cash cow may for another association produce a substantially different profit or loss scenario. And it's not even that simple, because varying streams of income - such as advertising revenues, dues, and subscription sales - are factored into the picture as well. In reviewing the data from Association Publishing Operations, it's important to examine the rose carefully, for it may actually be a carnation or perhaps an orange.

Are association publishing programs expected to generate profits?

Yes, depending on the size of the organization. As Table 1 indicates, nearly twice the proportion of associations with budgets greater than $10 million (compared to the overall average) mandate profits from books (76 percent versus 40 percent) and periodicals (45 percent versus 26 percent).

Table 1: Associations Mandating Profits by Association Budget Size

Must generate profits                     Periodicals      Books

Overall                                       26%           40%
Budgets $5 million or less                    21%           28%
Budgets $5 million to $10 million             26%           47%
Budgets $10 million or more                   45%           76%

[TABULAR DATA FOR TABLE 2 OMITTED]

Table 3 Use of Market Analysis by Association Budget Size

Budget size                               Conduct market analysis
                                           for new publications

Overall                                           10%
Budgets $5 million or less                         5%
Budgets $5 million to $10 million                 16%
Budgets $10 million or more                       24%

"There has been a growing pressure on associations to generate nondues revenue in recent years as competition for members and their dues dollars has grown," explains John T. Adams III, vice president of publications and new media at the Society for Human Resource Management, Alexandria, Virginia.

Associations with smaller budget sizes ($5 million or less) are less likely to require that their publishing programs generate profits (21 percent and 28 percent, respectively, for periodicals and books).

Are publications profitable?

Of the associations participating in the survey, only about a quarter have a mandate to make a profit (i.e., when total program revenue exceeds expenses), yet close to half of them achieve that status anyway. Conversely, nearly half (49 percent) of them spend more to produce their publications than they receive in income. Only 6 percent of respondents break even on their publishing operations.

For those publishing programs with a profit mandate, about 25 percent of them fail to achieve their goal.

Whether associations show a profit or loss often varies according to how they account for staff labor and overhead allocations. Close to half of the respondents include staff labor in their budgets for the various types of publications, and about a third include overhead allocations.

Most associations (90 percent) calculate unit costs for their different types of publications. Table 2 provides a summary of expenses included in these calculations.

Do most associations determine the need for a publication through a market analysis?

No. In 65 percent of the responding associations, the board or staff decides the need for a new publication. Associations with budgets greater than $10 million conduct market analyses nearly five times more often than associations with budgets of $5 million or less before creating a new publication - perhaps because associations with larger budgets are more likely to have a mandate to be profitable. Table 3 highlights these findings.

Are associations producing a broader range of association publications?

Yes, since 1989 (see Table 4), production of newsletters and newspapers has almost doubled and production of scholarly and professional journals has nearly quadrupled. The proportion of associations offering magazines has remained almost constant in the last 10 years.

Many associations participating in the study offer their members more than one type of publication. For example, 39 percent offer at least one periodical and books, and nearly one third offer magazines and newsletters. Of the associations that produce scholarly and professional journals, 81 percent also produce newsletters and 65 percent produce books.

Lenne P. Miller, director of journal publications at the Endocrine Society, Bethesda, Maryland, attributes the increase in products to increased competition and specialization of association memberships, which creates differentiated niche interest groups within the membership.

"These groups might prefer differentiated material pertaining to their areas of interest," he says. "In addition, technological advances have streamlined costs in some areas and many printers are more competitive, offering bundled discounts in Contract bids, making it more feasible to offer varied publishing products."

Who does the work?

Up to half of magazines and professional journals report using a combination of paid and volunteer help. Others - between 13 percent and 38 percent - rely strictly on paid staff. As [TABULAR DATA FOR TABLE 4 OMITTED] illustrated in Table 5, the average periodicals program staff size (in full-time equivalents) is 4.8 (extreme values removed) and the median is 2. Average book publishing staff size is 4.3 and the median is 2. The majority of respondents (58 percent) have centralized publishing staff in one department.

Are associations outsourcing publication responsibilities?

Among the different types of publications in the study, the vast majority outsource printing (between 80 percent and 90 percent), followed by fulfillment and mailing (roughly 60 percent for periodicals, 34 percent for books). Respondents often obtain outside help on editorial content, such as writing and editing, but not on production. Magazines (58 percent) hire freelance writers more than any other type of publication, and newsletters (23 percent) hire them the least.

How popular - and profitable - is book publishing?

Of all study participants, 39 percent publish books. The existence of a book publishing program varies with organization size. In organizations with total budgets that are $10 million or greater, 71 percent include a book publishing program, compared to 56 percent with budgets $5 million to $10 million, and 28 percent with budgets less than $5 million.

The profile of organizations that publish books tends to resemble the profile of those publishing journals: They are among the study's largest, with median budgets of $4 million and staffs of 32. Books are published equally by 501(c)3 and 501(c) 6 organizations.

Book publishing generates more revenue for associations than periodicals and more income per staff member than periodicals, according to the data in Table 5, which provides an overall look at associations that publish at least one periodical as well as books.

John Adams believes more revenue is generated per employee in book publishing for two reasons: Periodicals are usually more labor-intensive than books, and expenses for books can be amortized over several titles and more than one fiscal year, which is not the case with periodicals. As well, allocations of expenses can be substantially different for books and periodicals.

In what types of formats are association publications being made available?

Table 6 shows that associations are offering publications through print, CD-ROM, and the Internet. Clearly, the print medium continues to dominate the field, but nearly a third of the respondents are making their magazines, journals, and newsletters available on the Internet as well.

Newsletter are the only publication type with any significant distribution by fax (16.5 percent) and e-mail (9 percent). Some report a decrease in fax distribution (13 percent) and e-mail distribution (8 percent) since Internet service began. Eight percent report they no longer send newsletters via e-mail.

Between 60 percent and 70 percent of the associations that make their publishing programs available on the Internet do not restrict access, and few charge for it.

Will making too many items available on the association Web site erode print sales?

No. Although this is a common concern among association managers, [TABULAR DATA FOR TABLE 5 OMITTED] no respondents reported decreased publications sales since launching their Internet publications program. In fact, between 10 percent and 20 percent report increased periodical sales, and 28 percent report increased book sales.

Roughly 30 percent report the Internet has helped them save money, with much of the savings in printing and postage (see Table 7). Trade associations, which distribute their newsletters by e-mail about twice as much as individual membership organizations, report higher cost savings.

Some organizations make only abstracts or titles of their publications available on the Web site (approximately 25 percent and 10 percent of respondents, respectively), In this way, a site serves as an informational vehicle about a publication rather than as the publication itself.

About 20 percent of the respondents have created titles for the various [TABULAR DATA FOR TABLE 6 OMITTED] publication types for use only on the Internet, and roughly 13 percent of the associations offer publications on the Internet that once were available in print.

[TABULAR DATA FOR TABLE 7 OMITTED]

[TABULAR DATA FOR TABLE 8 OMITTED]

How do associations finance publishing?

Advertising finances 47 percent of magazine expenses and 42 percent of newspaper expenses - partially explaining why these two publication types have the highest percentage of ads to total pages of any types. For many, the ratio of advertising to total pages has increased in the past year - the median target percentage of ads to total pages for magazines is 40 percent.

The next-most-often cited source of financing is membership dues - highest for newsletters (see Table 8). Publishing expenses are also financed, to lesser degrees, by grants, sponsorships, subscription sales, and subsidies from other association activities.

Nearly all (95 percent) of survey respondents' magazines carry paid advertising, while 71 percent of the scholarly and professional journals carry paid ads.

Who sells the advertising, and how are they compensated?

Approximately 50 percent of the respondents use paid advertising representatives on staff for the various publication types - 70 percent use paid advertising representatives for newsletters. Compensation for advertising representatives varies; scholarly and professional journals and newspapers rely more heavily on commission only than other publication types, while newsletters rely more on salary only.

For those representatives paid by commission only, the median percentage of sales earned is 20 percent for all publication types. For those paid a combination of salary and commission, the commission is about 8 percent.

Are associations selling Web advertising?

Yes. Close to half (49 percent) of the magazines and roughly a third of other types of publications accept paid Web site advertising. A Web advertisement is most often priced by the amount of space it takes up on the Web site. About 90 percent of respondents ask their staff ad sales representatives to sell advertising for the Web, as well as other media.

Up to a quarter of the respondents offer free Web site advertising if the advertiser buys space in the magazine, with the majority of the ads (between 49 percent and 68 percent) staying on the Web site for one month.

More than half (55 percent) of participants' magazines and about a third of the other publication types hyperlink their banner ads. By doing so, they allow members to move to the advertiser's Web site by clicking on the banner.

Adams also observes that associations that today have a large print advertising program will be slower to move to a dominance in Web advertising. They will be the ones to use Web advertising as a supplemental program, predicts Adams, knowing that publishers will want to watch closely any shifts in advertising dollars from print to on-line products.

How are publications priced?

Roughly a quarter of the respondents use a formal pricing formula for their periodicals, and 43 percent use one for books. Of the approximately 90 percent of respondents who calculate publication unit costs, about half use a multiplier of the publication's unit cost to arrive at a price for their publications. That multiplier ranges from a median of 3.5 to 8 times the unit cost.

Respondents allocate a median of about 5 percent of their budgets to market these publications once they are priced.

RELATED ARTICLE: Visions of Tomorrow

While the results of ASAE's recent study explain what has happened in the past 10 years, they don't foresee the future of association publishing. Two association publishers provide these predictions:

"The way in which association publishing is produced will change dramatically, with many steps in the current process eliminated," says John T. Adams III, vice president of publications and new media at the Society for Human Resource Management, Alexandria, Virginia.

"Some of these areas will include not only print-on-demand, already an important part of publishing activity that reduces inventory, but also direct-to-plate publishing that will make everything electronic. Files will be taken directly from disc, eliminating many interim steps, additional time, and courier charges."

At some point in the future, Adams envisions association publishing converging with other formats. "There might eventually even be just a central database that the association manages from which members will pull the type and format of information that they want."

In five years, virtually all associations will be on the Web, Adams predicts. Asking for an association's Web site address will become as common as asking for people's fax numbers and e-mail addresses is today. But until access becomes readily available in trains, cars, and airports, the Web will not replace print media, he says.

Clifford Weiss has a similar vision. "Association publishing will shift to include formats that today one wouldn't necessarily consider publishing, but the end-result would be the same - associations imparting knowledge to members," says the director of communications at the National Association of Enrolled Agents, Gaithersburg, Maryland.

He predicts that a paradigm shift will occur - when association publishers decide whether to produce a new publication, they will consider all forms of communication, including electronic publishing and interactive forms of knowledge-building, such as e-mail discussion lists and chat rooms.

"This shift will parallel members' preference for immediacy of information, moving away from formally written articles as a mainstay," Weiss concludes.

RELATED ARTICLE: Facts and More Facts

Did you know that ...

* Of the 333 ASAE member organizations that responded to the survey, 52 percent are individual membership organizations and 48% are group of institutional membership organizations (i.e., trade associations). Of the respondents, 45 percent are associations with staff of 10 or fewer.

* Of the responding organizations, 53 percent publish newsletters. Among those, about a third also publish magazines and 41 percent produce books.

* Individual-membership organizations and trade associations communicate with their members in different ways. For example, 48 percent of individual-membership organizations offer scholarly and professional journals, as compared to 14 percent of trade associations.

* The median budget and staff of the study's trade associations are about half that of the individual-membership organizations.

A complete copy of Association Publishing Operations is available to study participants for $65m ASAE members for $95, and non-members for $115. To order, call [phone] and ask for product AMR213019, fax your order to [phone], e-mail your order to [e-mail], or mail your order to ASAE Book Publishing, 1575 I St., N.W., Washington, DC 20005-1168.

Tracy Casteuble is associate director of ASAE's Research and Information Services. E-mail: [e-mail].