Self-funding – The Holy Grail
Want your cake and eat it? It can’t be done.
If you want the benefits of a customer magazine and expect the advertising to cover the costs, then think again. This is the Holy Grail of the customer publishing industry. With a truly quality publication it is hard to find, if it can be found at all.
Some people seem to see the success of news stand titles and believe that the simple fact of producing a magazine means brands will flock to advertise in it – and at very high rates.
But to have a hope of generating enough revenue to recover the costs of publishing and perhaps leave a profit at the end requires at least two sources of money.
A news stand title does this through a combination of cover price and advertising revenue
A customer magazine is different: the cover price is replaced by the extra revenue generated by the marketing messages, while the advertising is icing on the cake.
As a result, it is a very rare case when advertising revenue comes close to funding a contract published title. Advertisers don’t buy brands or magazines, they buy audiences!
The simple fact is that advertisers are interested in a route to market, and the value of this via a magazine has no relationship with the cost of putting a magazine together.
This means it is very unusual for advertising to balance the costs of publishing and delivering a magazine. It is still the case, however, that advertising can go a long way to offsetting this publishing cost.
But, especially if you are planning a launch, you should in no way bank on covering your costs through advertising alone.
It is far more likely that, with very robust research showing the average uplift in sales is 8% for organisations that use a customer magazine, that this marketing route will be the way you are going to more than recoup your costs.
It’s like property development without speculation you can’t accumulate.
