When a Subscriber Pays $5 for a Year's Subscription to "Good Housekeeping" is that Good Value for the Advertiser or Hearst? - Steve Blacker

1 When a subscriber reacts to a giveaway sub price offer how much real interest can that subscriber have in the editorial product For example when a subscriber to Woman39s Day pays an additional 5 they get a year39s subscription to Good Housekeeping How profitable can this be for Hearst And the Woman39s Day sub offer is at a bargain price too A two year sub to Woman39s Day is 1499 while one year is a paltry 7 That39s less than a quarter an issue2 Obviously Hearst39s business model is totally ad sales driven But aren39t most artificial rate bases now heavily discounted to advertisers by anywhere from 5080 If a sub price offer costs little more than buying the issue twice at newsstand the level of commitment to reading each issue will drop off dramatically Reader involvement regardless of MRI data is price driven If the lowest sub price offer for The New Yorker is 6999 a year a potential subscriber has placed a much greater value on receiving The New Yorker then say Esquire Magazine A one year subscription to Esquire goes for the bargain basement rate of 8 Sign a three year deal to receive Esquire and the total cost is 18 or about 60 cents to have an issue of Esquire mailed to you Aside from showing product weakness the 60 cents Esquire sub offer has to reflect a poor renewal rate as well3 With the exception of O the Oprah magazine most all of Hearst39s sub offers seem to be bargain basement priced O the Oprah magazine charges 19 for a one year subscription By comparison Bazaar39s one year sub offer is 10 while its 3 year sub price is an incredibly low 20 Perhaps one reason for Vogue39s brand superiority when it comes to attracting advertisers is the fact that Vogue39s one year sub offer is virtually double Bazaars Vogue39s is 20 for a year39s sub The low priced discounting by Hearst further weakens their brands identity and value to the consumer by stating that for 5 more you can get 12 issues of Elle Magazine If a consumer is paying 400 more for a subscription to Vogue versus Elle which magazine does that person value and rely upon more4 Conde Nast while offering favorable subscription pricing does not offer the extremely low heavily discounted sub prices that Hearst does Conde also smartly packages print and tablet subs together Glamour offers an attractively priced print and tablet sub priced at 19 versus Cosmo39s print only offer of 15 for a yearly subscription GQ39s print and tablet one year sub offer is 17 The most heavily discounted Conde Nast title seems to be Conde Nast Traveler with a 12 issues for 12 sub offer Vanity Fair which reeks of class and prestigious authors and advertisers charges just 15 for a one year sub and even less for two years 255 By not asking the consumer to pay enough for a subscription many magazine companies have made their brands nothing more than low priced commodities If a subscriber feels they have nothing to lose by trying a 5 yearly sub offer the same cannot be said for a potential advertiser The advertiser has a great deal to lose as the likelihood of the subscriber to read or look at every issue diminishes a great deal when the cost is so heavily discounted6 Just as using premiums to sell subs made it more difficult to renew a subscription without offering another premium these low ball sub offers not only cheapen a brand but make it virtually impossible to take sub offers to profitable levels again in the future There is a solution to all this Magazines need to have realistic rate bases that reflect true consumer demand While an Esquire magazine might only have 50 or 60 of its current rate base willing to pay 20 or 24 a year for a yearly subscription These subscribers would be much more valuable to advertisers Esquire or other give away magazines priced as loss leaders are unlikely to change their business model It39s a game of charades Advertisers know that magazines that sell cut rate subs have artificial rate bases Thus they get magazines to heavily discount their ad rates In the end magazines are the biggest losers Their valued brands become more and more devalued with lower and yet lower sub price offers And magazine advertising rate cards are nothing more than a starting to negotiate fromSteve39s most recent book You Can39t Fall Off The Floor The Insiders39 Guide to ReInventing Yourself and Your Career chronicles his 50 year career working for over 25 different companies with 189 lessons learned and insider tips from Gayle King Cathie Black Chuck Townsend and 28 others Blacker is still going strong today as a partner in Frankfurt ampamp Blacker Solutions LLC His web site is blackerreinventionscom and email address is blackersolutionsaolcomRead all Steveamp8217s MediaBizBloggers commentaries at Media ReinventionsCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of 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