Publications adapt to leaner, meaner nineties - corporate publications - includes related articles - Industry Overview

Between 1988 and 1994, organizational publications hit a fork in the road: Some went straight to extinction; survivors swerved right to lower costs, higher return on investment and a solid linkup with the organization's vision and mission.

To some communicators, talk about publication survival might seem painfully self-evident; to others outlandish. Your reaction probably depends on the type of organization you work for, how profitable it is, and how influential your top communication manager is. In other words, it's a little like attending your high school reunion -- depressing or uplifting depending on how you personally are holding up.

To determine how some publications held up over the past six years, we revisited a printing cost comparison article we did in Communication World in 1988. It compared 19 magazines; 16 magapapers, and 16 newsletters from various regions in North America. We looked only at printing costs -- not design, salaries, postage and the many other components that determine the true cost of producing publications. Also, we selected publications geographically, based on an objective of having all regions of the U.S. and Canada represented, not that the selected publications were better or worse by any measure than others not included.

What that means is that we're not looking at statistically valid survey results here. We can't take what happened to the few dozen publications we looked at, then extrapolate that to all publications IABC members produce. For example, if those few dozen publications all had their budgets cut, we can't say all IABC members' publications had their budgets cut. Only that those we surveyed had their budgets cut.

That said, we scanned the list of 19 magazines from that 1988 survey and found that seven were killed outright -- a clean shot from some bean counter's Mont Blanc, right through the masthead. Eight of the 19 survived intact; two changed format to magapapers; and two were missing in action -- meaning either they didn't reply, or they now have no active IABC member.

Of the 16 magapapers surveyed, four were dead, seven survived, and five were missing. And for newsletters, 10 of the 16 had been axed, five survived and one was missing in action. Newsletters clearly were the most expendable of the publications we surveyed back in 1988.

Of the 51 publications we looked at back then, 21 were killed (41 percent), and we have grave concerns about eight others that were unreachable. Only 22 of them (43 percent) we're sure are intact today.

The bigger they were, the harder they fell

Okay, so what happened? We don't need any survey to tell us we've experienced withering, budget-cutting assaults, one after another in all aspects of communication, or throughout the organization for that matter.

Glenn Young at Monsanto explains how it went there. The Monsanto Magazine survived numerous attacks until the CEO finally said: "Keep it." Such attacks were widespread; such support rare. Lacking it, many publications simply crashed and burned.

In some cases multiple audience, general interest publications were replaced by other -- cheaper -- media. For example, included in our 1988 study was Best Western Quarterly, which was killed not once but twice in the past six years. It was replaced by a twice-weekly fax to hotel owner/operators.

"The quarterly just got too expensive," says Bill "Skip" Boyer, who served as editor. "We grew and added hotels and the printing bills went out of sight with no way to reduce them. It's too bad because I really enjoyed producing the publication."

Of the 19 magazines we surveyed in the '88 article, the top three most expensive in terms of total printing costs all bit the dust. Raytheon Magazine at U.S. $135,000 an issue led the '88 list with highest printing costs. Chevron World, costing $105,000 an issue, was second most expensive. Third costliest was AT&T Focus at $61,000 although since a whopping 313,000 of each issue were printed, the unit cost was a mere $0.19, making this publication the lowest in unit cost on the 1988 list. Each of these now extinct magazines was a multiple award winner and highly regarded in the industry: proof that producing a high quality product is no shield for dodging the budget-cutting bullet. So what is?

What's the best strategy?

From the demise of the three costliest magazines on the 1988 list we might formulate a strategy, namely, don't make your publication a large, looming budget target. When printing costs creep up over the $100,000 mark, it starts adding up to what might make a substantial dent in even a major multinational's budget.

Trouble is, it's easy to begin thinking like a commercial magazine publisher, for whom printing more magazines reduces unit costs and spreads such front-end costs as writing, editing and design over a larger base. Additional magazines are used for promotion, and higher circulation paves the way for higher ad rates and increased revenue. Additional copies also can be sold on newsstands. For commercial publishers, printing more magazines makes sense.

Corporate publishers -- seduced by those same economies of scale -- have at times aggressively added audiences such as opinion leaders, shareholders, customers and so forth, to what began as an employee publication. The idea: Print more, lower the unit cost, and use the publication to "market the organization."

When the budget ax began falling in the '80s, priorities changed. No longer was "soft" marketing to external publics as important as reducing costs. Rather than scaling back, seven of the 19 magazines on that 1988 list failed to prove how publication expenses translated to increased profitability for the organization. And they disappeared.

The best strategic move in these lean economic times has to be: Focus on reducing your total printing bill rather than increasing it with the intent of lowering unit costs. You and perhaps your boss will see the value of lowering unit costs and using additional copies to market the organization, but bean-counters determined to wring every dollar out of the budget won't see that value. They will, however, see a large, tempting, ever-increasing printing figure. The costliest (to print) magazine on our current list is $48,000, compared to $135,000 in '88. Quite a dramatic drop.

Printing bills and frequency drop, pre-press costs come in-house

In addition to a trend toward smaller printing bills than in 1988, our current survey shows that desktop publishing helped bring pre-press costs inside the organization and made these expenses much less susceptible to elimination (other than by eliminating the employees who perform the functions). It's much easier for a budget committee to identify and cut an outside service -- such as design/layout -- than to find it buried in "overhead." Of course, what happened in many cases between 1988 and 1994 is that the DTP function was brought inside, but with no additional people to perform the work. Thus, while the outside design/layout costs were eliminated or reduced, internal communication staffs went slightly crazy with overwork.

Another major factor in a publication's total annual print bill is frequency. Everything else being equal, a monthly will have a larger annual print budget than a quarterly. Some of the publications in our survey have cut back the number of appearance dates, such as Pfizer's Scene, which published nine issues in 1988, seven issues this year, and plans six next. Reducing frequency also helps reduce the work load problems many communication staffs have experienced because of downsizing.

While we saw the demise of the most expensive magazines on our 1988 list, the costliest magapapers survived much better, despite the fact they appeared more frequently. Bear in mind, the most expensive of the magapapers had a 1988 print bill of only $12,000 per issue, compared to $135,000 for the costliest magazine. (You could print almost a year's worth of the most expensive 1988 magapaper for the cost of printing a single issue of the most expensive 1988 magazine.)

Attesting to the value magapapers seem to provide, the top three costliest magapapers to print in 1988 are still publishing: Cox Enterprises' Focus, at $12,000; Weyerhauser Today, at $9,000 and Owens-Corning Focus at $10,184 (1988 figures).

Another way of improving a publication's bottom line is to generate revenue with it, as is the case with the magapaper Dallasite published by Texas Instruments in Dallas. It sells advertising that runs in a separate section of the tabloid, and revenues "more than cover the cost of printing" says Don Geiger, ABC, editor. Despite the relentless cost cutting during the past six years, very few publications have followed Dallasite's lead in generating revenues to cover or partially offset costs.

Downscaled look doesn't come cheap

Our cost comparisons of 1988 and 1994 indicate many communicators clearly have gotten the cost-cutting message. Whether magazine or magapaper or newsletter, most have reduced costs, and one -- Beckman Life -- went so far as to redesign to achieve a downscaled look. Ken Lyall, editor, explains: "Because Beckman was going through some great changes, Beckman Life had to as well, if only to give the impression that we were being proactive. I knew that we could no longer remain a glossy, high-quality, four-color magazine," he says.

"...we had the designer totally redesign the magazine to make it look less glossy. The budget was not the concern, rather it was the perception that we were not spending as much money," Lyall adds.

In addition to tightening budgets, communicators responding repeatedly mentioned the strategic role of the publication. Generally, this is expressed as consciousness of the mission -- the publication's and the organization's.

For example, the Dallasite's mission statement reads: "We want the Dallasite to be a tool that helps TIers understand TI's goals and how they can help achieve those goals." Compare that to its former, less-committed mission statement: "The Dallasite will serve TI by reporting news about the corporation, its people and its goals."

Looking back over the six years, we've seen these major changes in publications:

* They've held the line on costs, or added value. Those that didn't are gone.

* They've developed a strategic role, tied to the organization's goals.

* They've adopted desktop publishing; most, incidentally, use Quark XPress.

Today's publications don't look all that much different -- some are dreadfully designed by overworked in-house editors; others are bold, compelling works of graphic artistry showcasing writing that moves the soul. Most are somewhere in between.

The biggest difference lies beneath the surface: Communicators who produce them have a far better understanding of what these publications can do to help organizations accomplish their goals.

Strategies to help keep your publication alive

In conclusion, here are some suggestions based on the findings of our 1988 and 1994 print cost studies:

1. Strive to reduce large outside supplier bills, such as printing. They make easy targets for budget ax wielders. Reduce, rather than expand, mailing lists. Lower the total printing bill rather than striving to lower unit costs by printing more copies.

2. Perform desktop functions in-house. These "indirect" costs are tougher for budget-cutters to identify and generally are spread over a number of projects. A separate line item for outside DTP makes a more tempting target.

3. Investigate Texas Instruments' lead and consider selling ads. The revenue more than covers TI's printing costs, and indicates a commitment to making communication a profit center.

4. Tie your publication's costs to the organization's mission, and quantify your contribution. For example, "We published six articles on team building, and our reader surveys indicate 82 percent read them and improved their team-building skills."

5. Look for ways to reduce cycle (production) time. Even though E-mail has taken much of the burden of timeliness off print media, it's still a sacred concept in this highly competitive business environment.

6. Be ready to scale up your company-wide publications as E-mail continues to create communication chaos and the need for a single vehicle to provide context for today's highly fragmented employee communication messages. A revised and expanded mission is evolving for the companywide publication. Be ready for it.

In the final analysis, publication survival depends a lot on the profitability of your organization. If your organization is going through tough times, the publication -- despite the value it provides -- will be a cost-reduction target. If your organization is not being battered, the publication budget won't be scrutinized as intensely. The message here is: Adapt your publication strategy and budget to the realities of your organization. So long as cost cuts don't render your publication totally ineffective, lower budgets today can just as easily turn into larger budgets when your organization's profitability improves. Conversely, if today your organization is in good shape and your publication budget is growing, plan ahead for tougher times and devise a flexible strategy that you -- not the bean counters -- can execute to trim publication costs without risking extinction.

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Cliff McGoon is a senior communication consultant with offices in San Francisco and Palm Springs.

COPYRIGHT 1994 International Association of Business Communicators
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