Claiming Ownership - Review

Hershel Sarbin is a publishing consultant and senior director at Marketing 1 to 1/Peppers and Rogers Group.

A change in management structure gave McMurry Publishing a chance to make a profitable custom publication its own.

Although I am most enthusiastic about building a custom capability in any magazine company that wants to strengthen its relationship with advertisers and round out its portfolio of revenue streams, there are perils. That custom contracts have term limits and are always owned by the sponsored brand is an occupational hazard for the publisher. In a mergers-and-acquisitions market, the value placed on that title by the market is less than the value placed on magazines that are owned by the publisher.

However, such valuations simply do not give credit to the strengthened relationship between publisher and advertiser or the enhanced versatility of the publisher in a vastly changed marketing environment.

Here is one story where the worst fears of the custom publisher were realized, and then converted into a major publisher success.

In 1994, Columbia Health Care had become the nation's largest hospital chain. Decentralized Columbia needed a national image, but not at the expense of the local decision-making and marketing autonomy at its 342 hospitals. Through Phoenix-based McMurry Publishing, Columbia One Source, a quarterly health magazine, was launched in January 1995. Its primary audience was middle-age women--a demographic responsible for making 80 percent of all healthcare decisions in America. These women make decisions for themselves, their families and their aging parents. By 1997, the publication print order averaged four million and, remarkably, it was being produced in 70 versions in different regions of the Columbia system.

The overall results were impressive:

* The first 12 issues generated 950,000 consumer inquiries.

* A substantial amount of revenue resulted from the inquiries. Gross revenue from customers outpaced project costs by a seven-to-one margin.

* Over 32 percent of total revenue came from new customers who had not used Columbia in the last three years.

* By choice, 96 percent of all Columbia hospitals used One Source and rated its quality in the upper 90th percentile.

The perils and the happy ending

At the end of 1997 and beginning of 1998, there were changes in management at Columbia, and the company decided not to do national marketing programs. In other words, end of contract--and each hospital could decide on its own whether to continue to do a magazine.

McMurry launched About Health Magazine, its own product, and offered it to the roster of Columbia Hospital participants. About half decided to continue with the magazine (with 30 versions). Circulation today is 1.2 million, and the title is sold to hospitals all over country-- not just to Columbia affiliations. About Health is a very successful, wholly owned, equity-building component of a rapidly expanding national publishing enterprise. To underscore the result, it is a McMurry brand, never has to be renewed, and has a high value as a part of the McMurry-owned portfolio.

Peril has become promise.

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