Take an article headlined on a website called 24/7 Wall Street.
It summarises the problems of Reader's Digest this way:
– Reader's Digest, which has just filed for bankruptcy in the US, once had a circulation of 18 million. It recently announced it would cut its present circulation from 8 million to 5.5 million in February 2010 - "a routine part of the effort of many older magazines to save themselves";
– Reader's Digest once was the largest magazine in the world. It should have been a good candidate for moving online. But RD's site had only 1.6 million unique visitors in July;
- Time, Reader's Digest, Newsweek, and US News all tend to have readers over 50, and, in some cases over 60 years old. They also tend to be middle class. They are not nearly as active in their presence online as the generations of people who spend time on Facebook or Twitter.
I have come across many of the problems described here while I was employed by and then working as a consultant for many of the UK's largest newspapers, latterly as database director at the Telegraph Group.
The problems associated with an ageing readership and the movement of display advertising onto the web are challenges which can be solved by using creativity and vision to create new revenue streams.
1. A strong relationship with its readers is at the heart of most successful publications. This is built via strong branding, the creation of a sophisticated database and by catering for a wealth of different interests which then provide an excellent opportunity for brand extension.
2. Ageing readers are the ones with the highest level of disposable income. They buy new cars, go on holidays and have probably been faithfully subscribing to Reader's Digest for decades. What a marvellous opportunity they represent!
3. Supermarkets have provided the perfect example of how new revenue streams can be built. They created mega databases to maximise their access to customers, launched a raft of financial service products
and used the database to tell their customers about them as well as promoting their traditional wares.
4. Publications need to start thinking about "readers" as "customers" and, to quote a phrase often used in the testosterone-driven world of media, "make the assets sweat". Database marketing does not just involve techniques and technicalities, its success hinges on cultural change.
There are endless excuses for not embracing change - usually because it's difficult to do:
- keeping pace with ever-tighter data protection legislation is a challenge;
- conflicts with advertisers will probably arise;
- new skill sets have to be acquired;
- new departments have to be created.
But the prize is immense - survival, profit and growth.
David Cole is managing director of online research fim fast.MAP
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