New Magazines and Shows ... They Come, They Go (Part 1)
From time to time in the wedding market, new publications and shows are announced by enthusiastic promoters -- usually coming in bunches, often promising audience numbers and results far exceeding what the existing field offers. Often the pricing also seems too good to be true. As a vendor trying to maximize your marketing budget, should you consider some of these "sweet deals"?
Given that I produce a wedding publication, I'm always concerned when there's a flood of great-sounding new publications into the market. Not, mainly, for fear of competition – healthy new competitors elevate the market. I always advise wedding vendors to invest in as much quality advertising as they can -- because it all will perform better when the messages are reinforced. On the flipside, though, unhealthy competitors do great damage to the market. What concerns me about new publications and shows is that they so often fail -- taking wedding vendors' precious marketing dollars with them.
The biggest problem is that new publications and shows are often undercapitalized – that is, they don’t have the money required to produce their magazine or show during the lean years before profitability. Inexperienced founders often don’t understand the cost structure of producing media, and don't even realize there will be lean years (!) – but, in magazine publishing, the standard estimate is five years to profitability, and shows generally take at least three years to break even. That means that founders must have enough cash on hand to fund the production and distribution/marketing of their book/show and pay their staff and their own personal expenses for at least the first three years.
What happens when newbie founders realize – in midstream – that their initial revenues won’t fund all the costs of delivering what they’ve promised? In the best case, important corners are cut. Print quantities are reduced. Paper quality is downgraded. Magazines arrive late. Distribution contracts are cancelled. Shows aren’t advertised. In the worst case, publications and shows never even materialize – and the money received from wedding vendors has already been spent.
(That is, in fact, exactly what happened in the Sacramento market just a year or two ago – when two new publishers made big promises, then disappeared – as show producer Sue Gallardo points out in her analysis -- click to read it. )
Even experienced publishers tend to misunderstand the wedding market. In fact, part of what attracts experienced media vendors to the market is the false idea that it's "easy." It’s often considered “incremental business” for a publisher whose main emphasis lies elsewhere – and, sometimes it’s meant to shore up profits that are faltering in the main business. That can mean impatience when profits don’t materialize immediately, and overpromising based on assumed synergies with the main business that don’t actually exist. The challenges of reaching brides and serving the needs of wedding vendors differ in subtle but important ways from other markets – even experienced publishers with existing products that appear strong can end up on a fairly steep learning curve. If they’re not satisfied with the pace of their progress towards profitability, these publishers can end up leaving wedding vendors in the lurch, too.
What does that mean for wedding vendors considering advertising in these new properties? If you’re thinking about taking advantage of one of these new properties, at least do your research. Even the sweetest deal means transferring your hard-earned dollars to the pocket of the new publisher or show promoter – so minimize your risk of losing those dollars. Ask the right questions – including the ones Sue Gallardo recommends in her write-up.
To my mind, though, the first question to ask is whether taking a chance on a new media property is right for you. My feeling is that the risk has more upside for some vendors than for others – and, conversely, the downside risk will be more painful in some cases as well. Evaluating whether trying out a new media option in its first edition is a good idea for your particular business will be the subject of my next post.
Given that I produce a wedding publication, I'm always concerned when there's a flood of great-sounding new publications into the market. Not, mainly, for fear of competition – healthy new competitors elevate the market. I always advise wedding vendors to invest in as much quality advertising as they can -- because it all will perform better when the messages are reinforced. On the flipside, though, unhealthy competitors do great damage to the market. What concerns me about new publications and shows is that they so often fail -- taking wedding vendors' precious marketing dollars with them.
The biggest problem is that new publications and shows are often undercapitalized – that is, they don’t have the money required to produce their magazine or show during the lean years before profitability. Inexperienced founders often don’t understand the cost structure of producing media, and don't even realize there will be lean years (!) – but, in magazine publishing, the standard estimate is five years to profitability, and shows generally take at least three years to break even. That means that founders must have enough cash on hand to fund the production and distribution/marketing of their book/show and pay their staff and their own personal expenses for at least the first three years.
What happens when newbie founders realize – in midstream – that their initial revenues won’t fund all the costs of delivering what they’ve promised? In the best case, important corners are cut. Print quantities are reduced. Paper quality is downgraded. Magazines arrive late. Distribution contracts are cancelled. Shows aren’t advertised. In the worst case, publications and shows never even materialize – and the money received from wedding vendors has already been spent.
(That is, in fact, exactly what happened in the Sacramento market just a year or two ago – when two new publishers made big promises, then disappeared – as show producer Sue Gallardo points out in her analysis -- click to read it. )
Even experienced publishers tend to misunderstand the wedding market. In fact, part of what attracts experienced media vendors to the market is the false idea that it's "easy." It’s often considered “incremental business” for a publisher whose main emphasis lies elsewhere – and, sometimes it’s meant to shore up profits that are faltering in the main business. That can mean impatience when profits don’t materialize immediately, and overpromising based on assumed synergies with the main business that don’t actually exist. The challenges of reaching brides and serving the needs of wedding vendors differ in subtle but important ways from other markets – even experienced publishers with existing products that appear strong can end up on a fairly steep learning curve. If they’re not satisfied with the pace of their progress towards profitability, these publishers can end up leaving wedding vendors in the lurch, too.
What does that mean for wedding vendors considering advertising in these new properties? If you’re thinking about taking advantage of one of these new properties, at least do your research. Even the sweetest deal means transferring your hard-earned dollars to the pocket of the new publisher or show promoter – so minimize your risk of losing those dollars. Ask the right questions – including the ones Sue Gallardo recommends in her write-up.
To my mind, though, the first question to ask is whether taking a chance on a new media property is right for you. My feeling is that the risk has more upside for some vendors than for others – and, conversely, the downside risk will be more painful in some cases as well. Evaluating whether trying out a new media option in its first edition is a good idea for your particular business will be the subject of my next post.
posted by Laurie at 8:59 AM
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