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FMA Day: Outsourcing Circulation

Panelists and industry experts weigh the pros and cons of outsourcing circulation.

NEW YORK—The Fulfillment Management Association descended on New York City Wednesday to hold a seminar discussing the benefits of outsourcing magazine circulation. Costs, expertise and experience dominated the focus of the panel as an avenue for consideration.
“There are several advantages,” said panelist Cary Zel, president and founder of ProCirc, an outsourced circulation solutions provider. “You can get some fresh prospective and fresh thinking for marketing and selling these publications. A lot of times we’ll take over where the properties and brands have been under managed or mismanaged and we try to re-find that marketplace. The benefit of fulltime print buyers, fulltime fulfillment specialists and modeling specialists—some of these magazines don’t need a fulltime print buyer but with [outsourcing] you get not only the economies of scale but also the knowledge and experience since a company may not be able to bring someone in at the level internally.”
Zel says his company has 35 fulltime people on staff surveying a variety of marketplaces, something his company can leverage with clients. Panelist Wendy Frank, consumer marketing director for Forbes Media, echoed Zel’s sentiment.
“From a publisher’s point of view, you’re getting an expert in the field,” said Frank. “To hire a particular staff member that would be a specialist in let’s say agency only, for the cost of the overhead for that person and even the office space, you could outsource that to someone that not only understands your business but is working on a number of other businesses that are similar so they can come in with a fresh perspective and say, ‘This particular company is working with this agency so you should try that program.’ The consultant gives multiple views because they’re working with so many other publishers.”

While some benefits can seem immediately obvious, the changing media landscape—including digital reporting—opens up the question of the practice of outsourcing.

“Our landscape is dramatically different in the media business today than it was even two or three years ago,” said the panel’s moderator Beth Roy, vice president of client management for CDS Global. Roy asked panelist Greg Wolfe, president of Circulation Specialist, Inc., how his work has transitioned in this new marketplace.

“The biggest focus, even though there’s a lot of day-to-day traditional circulation work, a lot of the focus is on digital and new media,” says Wolfe. “We try to stay on top of everything that’s going on, we have a group that develops mobile apps, things for the iPad, digital editions and replicas. Opportunities like group buying, which has been very successful for some of our clients, social media and all of those things—we want to be in a position so we can advise clients on anything that can support their business. In this day and age you have to be on top of digital, mobile and online in order to keep moving forward and to stay profitable.”

Wolfe added that by outsourcing a publisher could get access to new digital strategies. Frank also weighed in, commending magazine auditing agencies for digital accountability in circulation.

“The most positive changes in our industry have been from ABC and BPA rules that allow for easier measurement of digital editions,” said Frank. “That’s always been a challenge for us from the publisher end—you want to go out there and be productive and be able to explore these new channels and you find out ABC won’t accept them as part of your paid circulation so why bother? Now they’re making it easier to declare your digital subscriptions and that’s very positive.”

Keeping It In-House

While the panel Wednesday highlighted the benefits of outsourcing circulation—since the majority are outsourcing consultants—a question arises: why would a publisher want to keep that service in-house?

“We support the outsourcing community first and foremost—they do provide a very good and valuable service and it works for some publishers and maybe isn’t so much of a good idea for other publishers,” says Dave Bergeman, consumer marketing director for The Atlantic magazine. While Bergeman wasn’t in attendance at FMA Day, he does shed light on some in-house benefits. “I have been part of organizations who wanted to bring circulation services back in house when maybe the services were outsourced.  I’ve also been in situations with a smaller publisher where I’ve worked with the outsourcing company to help provide resources. I can speak to both and I think it’s a personal preference of the publisher to make a determination on a solution.”

One benefit of in house services, Bergeman says, includes having dedicated resources of people working on a product everyday, ensuring there is a timely return of analytics and marketing promotions. He adds that by having circulation in-house there can be a greater sense of ownership for the internal departments, which could get lost in outsourcing communities because they’re handling multiple accounts. One other perk, he says, is an in-house circulation team will have a relationship with editors, event staff and other staff members.

“It’s a critical revenue and profit stream for a publication,” adds Bonnier’s consumer marketing director, Bob Cohn. Cohn wasn’t in attendance at FMA Day but he also has insight on why it may be good to keep circulation in house.

“Even for totally advertising supported publications, circulation is the life blood of the publication,” he says. “I understand outsourcing for maybe a very small publishing company or magazine that can’t afford to have its own staff, then the outsourcing concept makes sense. Anyone over a certain size, however, by the time they pay the fees to some of these outsourcing companies it would be better to have the expertise in house—whose thought processes, promotions and marketing head are tuned into a specific market that publication serves whereas by definition, outsourcing companies have to be generalists because they deal with men’s magazines, women’s magazines, special interest titles and niche publications. I would find it hard for them to understand the subtleties of each niche and market they operate in—it’s important to not have a one size fits all mentality. Just because someone can create an effective program for Parenting magazine doesn’t mean it will work for Winter Sports magazine.”

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