Catalog/Publication Outlook : Preserving a Strong BaseDecember 2013 By Nicole Perry, Associate Editor
Although the publishing industry reports declining ad pages and circulation numbers, there were some positive outcomes in 2013, including a slight increase in title launches and fewer shutterings. In any given survey, the results can be interpreted with a "glass half-empty" or "glass half-full" mentality. These executives remain hopeful.
"Many of our magazine clients are reporting increases in page counts and circulation, with print still generating the commanding share of subscription and advertising revenues," Blais remarks.
Transcontinental's Jensen is encouraged by an Association of Magazine Media (MPA) report that indicates print ad revenue increased 1.6 percent through the third quarter. "There's also evidence that some marketers are shifting dollars to print as the novelty of digital advertising disappears," he says. "Far more people ignore digital ads than read them."
Several digital-only publications have also resumed their print versions, according to RR Donnelley's Marcoux. For consumer publications, the trend towards developing high-grossing special editions around celebrations and anniversaries has also helped reduce the loss of newsstand sales in the checkout aisle, he says.
In addition, magazine publishers are continuing to experiment with creative paywalls. "Some have moved to a paywall model rather than an advertising model," Marcoux explains. Others have embraced the "Netflix subscription style," as he calls it. This approach allows readers access to all they can consume for one price.
On the catalog front, there is no better medium than the printed page to deliver a memorable, tactile shopping experience to the reader, contends John Coyle, group president, sales, at RR Donnelley. "Printed catalogs have staying power and, when combined with other features such as fragrances, textured varnish and targeted inserts, they provide a multi-sensory experience that does not end with the content on the page," he says.
Print Still Preferred Medium
Coyle is heartened by a recent Two Sides survey that revealed 70 percent of readers stated a preference for reading print and paper communications rather than pixels on a screen. Sixty-nine percent of that group consisted of 18- to 24-year-olds.
However, an intelligent blend of printed and Web-based marketing approaches can bring about even more sales for catalogers. Coyle points to an article in the U.S. Postal Service's Deliver magazine that reports 163 percent more revenue when Websites are supported by printed catalogs versus Web-only media.
Blais is in agreement. "When used as part of an omnichannel strategy," he says, "catalogs deliver a sampling of products and then encourage the end consumer to take further action online. Unique features such as custom covers, textured varnishes, specialty inks, tipped on cards and personal messages combine to more fully engage the reader and spur response."
For 2014, possible postal increases loom as the biggest challenge for catalog and magazine publishers. "We had been seeing increased circulation and page counts, but the pending exigent rate increase—and ongoing economic uncertainty—seems to have stalled the positive momentum," says Blais, who predicts more prospecting will shift to digital channels like e-mail and banner ads.
In response to looming rate increases, these three printing companies are taking a proactive approach. For example, Joel Quadracci, Quad/Graphics chairman, president and CEO, has testified twice before Congress on reasonable and practical postal reforms. RR Donnelley participates in the national conversation through membership in The Coalition for a 21st Century Postal Service and the Affordable Mail Alliance. And Transcontinental is working with the American Catalog Mailers Association and other industry groups to convince the USPS to hold off on filing the exigency rate case in hopes of true postal reform.
"There's a simple, time-tested rule when it comes to postage increases," Jensen says. "Circulations go down when postage rates go up. This downturn is often further expressed through tendencies to reduce the number of pages or frequency of events."
But the outlook is not totally sour. As the saying goes, if life hands you lemons, make lemonade. In the meantime, Jensen says his company continues to mitigate postage costs through co-mailing distribution, paper alternatives, targeting capabilities and making catalogs more appealing and higher performing.
What they do not do, Jensen emphasizes, is suggest abandoning standards of visual and tactile qualities to cut costs. "Ultra-cheap paper or pages crammed with small type and minimal graphics might reduce distribution costs, but at what price?" he asks. "So, we try to focus all of our recommendations on changes that will help offset mailing and distribution costs, without sacrificing the qualities that make for a compelling reading experience." PI