Tidal Waves

Death of the caterpillar is the birth of a butterfly. Someone should mention this to the publishers of every major magazine.

Pew Research, the busy bodies constantly reporting on what we people are doing, recently noted that magazine advertising rates are sinking faster than congressional approval ratings. Advertising pages in the top magazines have dropped an average of 18% in the last year, repeating an annual trend that began in 2008, two years before the original iPad was introduced. At this rate magazines will soon pay you to read them in the distant hope that advertisers will care.

Every market changes, but some change very fast (the iron ore industry moves a bit more slowly than high tech and publishing). Established franchises can disappear when their markets rapidly change if they fail to see, accept and respond to the change. Microsoft has publicly confessed that they were slow to respond to the rise of tablet computing and have also said they cannot compete on price in the cloud space. Many magazines have been slow to respond to the web much less tablets, though it is interesting that all the major IT technology magazines went 100% digital well ahead of the paper pack.

magazine-publishing-onlineTwo indicators exist to tell you when a trend is undeniable and will change your industry. First is raw economics. Magazine printing and mailing is an expensive proposition. When the web rapidly evolved, many folks canceled their magazine subscriptions and found equivalent information online. Some magazines lamely tried to drag their readers online but failed to deliver the same experience as print (it was kinda hard to drag your desktop poolside for a light read while working on your tan). The basic value proposition of magazines – as a source of information and entertainment – was replaced by Google’s ability to lead people to competing information sources that delivered content for nearly zero dollars.

The other indicator is customer preference. It doesn’t matter if the economics of one product is better than another if customers don’t want it. In the publishing trades, people still want magazine style content, but they are rapidly showing preference for reading on phones and tablets, want content updated today (not next month), and they generally want to pay nothing (which makes publisher pay walls a problem and justifies dropping digital subscription prices significantly). Nobody ever went broke satisfying people’s preferences, except for the Greek government.

As a business leader, you have to not only recognize market changing trends but respond in the right time frame. You need to be ahead of the competition, yet keep early adopter risk low. Take digital magazines as a case study. Initially the technology was weak and user experience was poor. But it wasn’t weak enough or poor enough to prevent people from migrating to online content. The trend was already established and moving on that trend three years ago was not ill-advised.

The risk of early adoption can be estimated, as can be the other major risk, cost. No new market maneuver is cost free, and some – like changing your content creation for new technologies – can be daunting. But at least the costs can be projected, and once documented can be compared to the cost of failure if you don’t move with the market tide (and as a former surfer and sailor, I can attest that fighting the tide is never wise). The risk of lagging behind a trend is often economic death.

From a marketing strategy perspective, you have to see and measure trends in their earliest days. Apple sold nearly twenty million original iPads in the first year. Mass market adoption on that scale, especially in light of previous iPhone success, was a wake-up call to the publishing industry that may publishers ignored. Advertiser now have search, social and pay-per-click options that divorce themselves from vaguely targeted magazines, reducing the value magazine publishers provide. The tide came and is seeping away many magazines who failed to see the rise.

What tides are you ignoring?


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