Under the heading, The Power of Print, Knight Kiplinger, editor-in-chief of the “original personal finance” Kiplinger’s Personal Finance magazine, wrote “here at Kiplinger, we love the business of print publishing, and we’re committed to it.”
That editorial, an oasis in a digital desert world, was more than an incentive for me to reach out to Mr. Kiplinger and ask him few questions about print, the web, digital and the future of magazine publishing. In this segment of The Mr. Magazine™ Interviews, the editor-in-chief of Kiplinger’s Personal Finance, the weekly Kiplinger Letter and the very successful Kiplinger.com, shares his experience of having a robust website and a healthy ink on paper publication, proving that the two can breathe the same air without suffocating either.
In typical Mr. Magazine™ Interviews format, first the sound bites, followed by a brief video clips from the interview done via Skype (with apologies for the quality of the picture due to a bad Skype connection) and finally the entire, lightly edited, interview.
And as a first time bonus for the blog (think of it as a sidebar) Mr. Kiplinger’s recipe for a successful magazine launch at the end of this blog.
So sit back and enjoy Mr. Magazine’s™ interview with Knight Kiplinger. First the sound-bites, then the very lightly edited transcript.
On the power of print and the people who love it:
People who love magazines on paper are not Luddites, they’re not Neanderthals, they’re not Technophobes. As a matter of fact, they tend to be smart, tech-savvy people who say they use all sorts of electronic media, tablets and smartphones.
On a Kiplinger’s Personal Finance reader response to online ads:
I don’t pay much attention to ads online. They just roll past me. But in the evening – in my leisure time with a magazine – I devour that magazine. I tear out pages of articles and advertising to save and to act upon later.
On the media Kiplinger’s prefers when reaching their audience:
Now, a smart publisher, and I like to think that at Kiplinger’s we’re smart publishers, is medium agnostic, channel neutral. We want to serve people with quality content. In our case, that’s personal fiance and investing information. We want to reach them in any medium that they’re most comfortable with.
On why publishers and advertisers fail to see that most of the industry’s money still comes from print not online:
Well, it is indeed, at most publishers. Print publishing existed for years on the two legs of advertising revenue and subscription revenue. We know that a lot of print advertising has migrated to the web. I would submit too much has migrated to the web and there’s a great opportunity for savvy marketers to rediscover this high quality print audience of people who are inquisitive and will pay attention to their ads.
On rightsizing magazine circulation:
Today, I think we’re moving into a period where magazines will rightsize, they will find the core of passionate, committed subscribers who renew strongly, and who will once again pay an economically viable subscription price and it won’t be, perhaps, a million or two million.
On the success of Kiplinger.com:
Our website, Kiplinger.com, is doing very well. It’s profitable, and not every publisher’s website really is profitable, as if on a standalone basis, with honest accounting.
On what keeps him up at night:
Trying to communicate the value of what we do to these different markets, especially advertisers. There is an under-appreciation of the buying power and the receptiveness to smart marketing on the part of older Americans; especially the well-educated older Americans who make up the audience of newsweeklies, business and financial magazines.
On the perception of the plight of magazines:
When people talk about the plight of magazines, you probably correct them and say, it’s not a uniform picture, and it’s not the same.
The video clip:
And now for the lightly edited interview:
Samir Husni: I was very intrigued with your editorial in the October issue of Kiplinger’s Personal Finance about the power of print. So, my first question to you, why are you writing about the power of print, when everybody else is talking about the death of print?
Knight Kiplinger: Well, the immediate occasion was the recent demise of SmartMoney Magazine, one of the three remaining personal finance magazines, down from eight or nine monthly magazines a decade ago. And I knew that a fair number of the readers of Kiplinger’s Personal Finance also read other personal finance magazines, Money Magazine and SmartMoney. And it didn’t seem the Dow Jones was communicating with those readers in any meaningful way, so I thought that I would have a candid, heart-to-heart talk with our subscribers and perhaps some of their subscribers too about the enormous challenges being faced today by print publishing and deputize my readers to share with me their thoughts, ideas and suggestions. And I asked some carefully tailored questions designed to draw them out: how they use online information, how they use print, the difference between the two, what they like about one and what they like about another. I also asked them for any suggestions they might have for a passionate, committed print publisher to stay in this game and continue to serve them in a medium that millions of people love. Well, I was astounded by the response I’ve gotten so far. We have over 400 emails and letters from Kiplinger’s Personal Finance readers answering these questions very intelligently, very astutely and very creatively. A few things emerged from this. People who love magazines are not Luddites, they’re not Neanderthals and they’re not Technophobes. As a matter of fact, they tend to be smart, tech-savvy people who use all sorts of electronic media, tablets and smartphones. They say, “I’m online all day at the office, but I also love magazines.”
This is a message many advertisers are overlooking or just not getting at all. Some of these people said that they’re online all day at the office and overdosing on technology all day long. In the evening, when they get home, they want to kick back on the deck or in the study with a cup of coffee, a glass of wine and a great magazine. They really bond with their magazines in this setting. And significantly, a lot of them said, “Mr. Kiplinger, I don’t pay much attention to ads online. They just roll past me. But in the evening, in my leisure time with a magazine, I devour that magazine. I tear out pages of articles and advertising to save and act upon later. I pay more attention to advertising in magazines than I do online.” A lot of advertisers say that they can reach the people they want to reach – affluent, well-educated and intelligent people – online. They say they don’t need to use magazines in their media mix. I think they’re mistaken about that. The message is coming across loud and clear from these people that reaching them through the print medium of a printed magazine is more effective than chasing them online. Sure, they’re online, but they don’t seem to be paying as much attention as they do to print ads. That was quite a revelations to me.
Samir Husni: So why do you think then that the majority of print publishers are like the advertisers, abandoning print, preaching the gospel of digital and committing suicide rather than dying?
Knight Kiplinger: Well, there is that. Now, a smart publisher, and I like to think that at Kiplinger’s we’re smart publishers, is medium agnostic, channel neutral; we want to serve people with quality content, in our case, personal finance and investing information, we want to reach them in any medium they’re most comfortable with. So at Kiplinger.com, our website is growing robustly in unique visitors, in page views, in advertising revenue; we’re not turning our back on this audience, but we think that the audience is, at least, a dual audience, maybe more than that. There are other media as well, broadcast media, radio and that sort of thing. But we are committed to serving our readers however they want this information. And I’m hearing loud and clear that among the 600,000 plus monthly subscribers at Kiplinger’s Personal Finance, there are a lot of people who really want this magazine to hold in their hands and to pay attention to. So, it’s not like publishers are committing suicide or turning their back on print, well some are, Dow Jones decided to pull the plug on SmartMoney as a printed publication, U.S. News is pretty much going all digital except for their special issues, and there are more. I did hear from a lot of our readers who said, “If you’re suffering from declining subscription revenues and a falling unit price for a subscription to a magazine, look in the mirror, because you probably brought this on yourself.” Some of them said, “I would gladly pay more for a subscription to Kiplinger’s Personal Finance magazine if you required me to, if you asked me to, and you didn’t keep reducing the price at the last minute on the fourth or fifth or sixth effort of renewal, because publishers have trained people to wait for the best offer. This struck a sensitive note with me. Because, in fact, the real value of a phenomenal price, and especially the inflation-adjusted price of magazines, has been falling for decades. And we are complicit in that as publishers, we allowed advertisers to subsidize the reader for too long, undervaluing and underpricing our product to subscribers. And now it’s very hard to put that genie back in the bottle and to gradually raise subscription prices. But many of these readers responding to my questions said, “I’m paying $16 to $18 a year for your magazine now, or in some cases less with introductory offers, and I would pay more. But make me pay more. Don’t undercut my willingness by throwing out a really low price at the last minute when you haven’t heard back from me for a while.”
Samir Husni: What is the solution? Where are the revenues coming from? Does it really take a genius to see that most of our money is still coming from print?
Knight Kiplinger: Well, it is indeed, at most publishers. Print publishing existed for years on the two legs of advertising revenue and subscription revenue. We know that a lot of print advertising has migrated to the web. I would submit too much has migrated to the web, and there’s a great opportunity for savvy marketers to rediscover this high quality print audience of people who are inquisitive and will pay attention to their ads. That other leg on which publishing was standing – subscription revenue – has fallen. I think that publishers brought some of this on themselves by putting too much free content online. They expected that they could monetize those eyeballs and achieve equivalent revenue to the eroded subscription and advertising revenue. Of course, that hasn’t happened. You’re quite right – advertising unit prices on the web continue to fall, web advertising is pretty much a commodity and like all commodities the price tends to fall as supply proliferates, more and more websites are seeking marketing dollars. So I really think that smart publishers have to re-balance their focus and pay more attention to their print product and rightsize their magazines. Many magazines for years were carrying rate bases and guaranteed circulations that were too high and to feed the monster. They had to slash their subscription prices to maintain artificially high guarantees to advertisers. They did this for advertisers who turned out to be awfully fickle anyway and unappreciative of the audience. Today I think we’re moving into a period where magazines will rightsize. They will find the core of passionate, committed subscribers who renew strongly, and who will once again pay an economically viable subscription price. It won’t be, perhaps, a million or two million. It will be an half a million, perhaps, or 200,000 or 300,000 minted readers paying a higher subscription price. The very evidence of their commitment and their willingness to pay more for that magazine, I think, will be the evidence that advertisers need that this is a valuable audience in front of which the method should be put.
Samir Husni: How are you, Mr. Kiplinger, going to implement those changes at Kiplinger’s Personal Finance?
Knight Kiplinger: We are processing these emails, letters and phone calls and mining them for nuggets of valuable marketing intelligence that are contained in these emails. And we are constantly price testing. Most publishers are price testing. We mail samples at different prices to see what works and we know that there is a trade-off between a higher subscription price and a lower response to a direct mail package. We know that – it’s been going on forever. And I think we’re going to experiment with the right base rate. Right now we’re at 600,000 paid subscribers. We have some devoted advertisers who know the value of our audience. The advertisers know that our audience is attentive and responsive to their marketing message. So we’re going to be using this intelligence to continue to find the right size, the right trade-off in circulation, subscription revenue and advertising revenue that fits us. And I imagine, over at Time Inc., the people at Money Magazine are doing the same thing. Money Magazine, with the largest rate base, guaranteed circulation in the personal finance field, led the charge to lower and lower subscription prices. They were the ones who slashed the price down to $12, $10 and sometimes even less, trying to maintain at all costs a rate base. Many people thought this was too high, which I might argue is too high today, and it forced the other magazines in the field, especially SmartMoney and Kiplinger’s, to lower our subscription prices because they were out there in the mail with a lower-priced offer for a magazine that sounded very similar and we were kind of forced into this arms race of lower and lower discount prices. I’d like to drop out of this arms race. I’d like to properly price and properly size our magazine to be viable for years to come. That’s what we’re going to be working on.
Samir Husni: Do you think that we’re making the same mistake by counting customers, instead of customers who count, even now on the digital side?
Knight Kiplinger: I think that’s true. I think that every publisher is looking at its core base of committed customers and asking what additional products and services these customers will buy from us. Will it be books, DVDs or computer software? At Kiplinger, we’re broadening our product line all the time. We recently brought out a fabulous new computer software product that helps people pinpoint the ideal age for them to start their social security benefits. This is a natural extension of our editorial mission. We’ve been writing about smart social security claiming strategies for starting benefits for years. This new product, Kiplinger’s Social Security Solutions – $50 or for a premium edition edition with a lot more hand-holding, $125 – fits perfectly with our editorial mission of personal finance guidance. This is the sort of thing that we and other publishers are doing. We’re not putting all our chips in print nor online. As I mentioned earlier, our website, Kiplinger.com, is doing very well. It’s profitable. Not every publisher’s website is really profitable, on a standalone basis, with honest accounting. We don’t load all the editorial expenses onto the magazine as some publishers do to make the website look artificially prosperous. We share the expenses equitably between the print and online side. On that basis, we’re breaking even across the board, and that’s no mean feat in this era.
Samir Husni: That was going to be my next question, because everybody that tells me my website is profitable I say, how are you doing the accounting. So you had the answer before I asked the question.
Knight Kiplinger: Well, that’s very smart of you. Over the last 10 years, I’ve talked to a lot of fellow publishers about this. And I usually find that they are allocating the expenses in a clever way to make one side or the other look like the hero or the goat. And we have a consolidated editorial staff that writes for both the website and the magazine. They do good work in both media, very important that way. We believe that for a website to be truly profitable, the accounting has to be very, very honest. We insist on that. And since I’m a financial journalist, I wouldn’t have accepted any less.
Samir Husni: Here is my typical Mr. Magazine™ interview question: What keeps you up at night?
Knight Kiplinger: In this age what keeps me up at night is trying to communicate the value of what we do to these different markets, especially advertisers. Much of the advertising and media-buying decisions today are made by very young advertising personnel. They’re inexperienced and they don’t know the relationship selling that advertising, and buying that advertising, used to entail. They have commoditized their media buying. They do media buys from a PC. The greatest challenge is how to communicate the value of a print audience – especially a somewhat older, affluent and well educated audience – to media buyers who look very different from our audience in many cases. There is an under-appreciation of the buying power and the receptiveness to smart marketing on the part of older Americans – especially the well-educated older Americans who make up the audience of newsweeklies, business and financial magazines. When people talk about the plight of magazines, you probably correct them and say that it’s not a uniform picture and it’s not the same. If I published a magazine of celebrity and entertainment and men’s and women’s health and travel, a hobbyist magazine, maybe I’d be doing great because many of those categories are doing very, very well, fashion and fitness, and all that. But ironically, the magazines that are most challenged today are the more serious magazines, the magazines of news and opinions and edification, financial advice and business news. They’re very important subject matters, but many of these magazines are more challenged that the frothier, lighter magazines, many of which seem to be doing well.
Samir Husni: Is that a reflection of our country or is it a reflection of the advertising community?
Knight Kiplinger: It’s a little of both. Even serious people – serious, hardworking, successful people – like some froth occasionally. Some just like entertainment. Not all of them want to kick back in the evening with Kiplinger’s Personal Finance magazine. They want to kick back with People or US Weekly or Men’s Health, or something like that. There are different sides to all of our lives. There are people who think that they can get everything they need by way of news, information and advice online. Well maybe it’s out there. But one reader, more than one reader, had an astute observation about the value of print publications, whether it’s the front page of their newspaper or it’s a magazine. One woman said, “I read magazines to tell me what I don’t know that I don’t know – to tell me what I need to know and didn’t know that I needed to know and didn’t know.” She said that the selection of stories in our magazines each month is what brings her attention to important things. Maybe she could have hunted all over the web and found them, but she wouldn’t have known the questions to ask. She didn’t know that there was a problem brewing that we could help her with. A lot of people said we use the internet, we use online, to find out things for questions we have framed ourselves. Something that we know is out there and we need to find it and we use clever searching to find it. But they use magazines and newspapers, and the wise editors of those publications to bring to their attention things they didn’t know that they didn’t know.
Samir Husni: My final question to you is: being a financial journalist, how do you gauge the health of the magazine industry today? From a financial point of view.
Knight Kiplinger: I think that it is clearly a troubled industry today. But as I said earlier, there are segments of the magazine publishing industry that are doing very well. You drop a Vogue magazine on your foot and you’re going to break the bones of your instep. But there’s a magazine that people buy for the ads, it’s chocked full of ads and people buy it less for the so-called editorial content and the features than the ads themselves. We see magazines abandoning print and going online only, but there is an important message there. We heard from hundreds and hundreds of readers of ours that they have not followed some of their favorite magazines online. A number of them said that they’re not going to follow SmartMoney magazine to Smartmoney.com. It’s just not their thing. They’ll continue to read our magazine. Perhaps they’ll continue to read Money Magazine. Some people said that they loved U.S. News when it was a weekly magazine, but they have not followed it to the website. Advertisers have to be very careful, publishers first have to be very careful, and advertisers have to be very careful that they are not turning their back on their audience thinking that they can reach all these people effectively through online only. I think they need to use a mix of media and magazines should remain a very valuable part of that media mix.
Samir Husni: Thank you very much.
So, you want to start a magazine? Follow Mr. Kiplinger’s recipe for a successful launch:
Knight Kiplinger Recipe to Launch a New Magazine
1. First you need to answer some preliminary questions:
A. Is there something special about the medium of a print magazine that suits the content that makes it better than it would be online?
B. Is there a category of advertisers who will gravitate toward the subject matter.
C. How do you plan to find readers for your magazine?
D. Where are you going to market your magazine so that people can find it.
2. Many young, would-be publishers don’t know about the enormous expense of direct-mail solicitation, the dominant way print publishers find readers.
A. The best way to find the reader is to put your idea in front of another reader.
B. The best predictor of whether someone will open your direct-mail packages, fill out the order card and subscribe to your magazine is whether or not they subscribe to magazines now.
C. Every publisher tries out new lists, so-called compiled lists, they mail to professionals, executives and senior people in a certain occupational area. They mail to financial planners and similar people, but the best predictor of whether someone will subscribe to a magazine is not what field they’re in, not their age, not their income, but whether they subscribe to a magazine now. That’s why the most effective lists to mail for a magazine publisher are lists of similar magazines.
D. With SmartMoney, Money Magazine and Kiplinger’s Magazine, we all mail each other’s lists and we trade lists with business titles like The Wall Street Journal. The best predictor is not their occupation or something similar but if they are buying reading material by mail now and reading it on paper.
E. Many young, would-be publishers don’t understand this. And I say to them: What is the universe of direct mail available names on effective publishers’ lists that you can mail to with your test package? Is there a big enough universe for you to get only one percent or a half percent, one-and-a-half percent response and launch your magazine off those lists?
3. Some people say that they will advertise their magazine online. Well, one of the dirty secrets of publishers is that it’s difficult to sell printed material – magazine material – online. Like sells like, it seems.
4. These are the tough realities of print publishing that starry-eyed, would-be publishers need to hear, whether they’re 25 years old or 45 years old.
5. So, ask the tough questions. Play devil’s advocate. We all love print, but launching a new publication these days is no mean feat.
To learn more about the ACT 3 Experience click here.