“Our Audience Wants Print,” Says Steve Lacy, CEO of Meredith. The Breakdown: “2% Digital, 98% Still in Print.”October 2, 2013
When Steve Lacy talks, people should listen. Why? He is the CEO of the Meredith Corporation, the media company that reaches 100 million women. CEOs of major companies are in most cases, very guarded in what they tell you and what they share with you. Not Steve Lacy. I invited Mr. Lacy to keynote the one-day workshop, “CPR for Magazine Media,” that was sponsored by the Magazine Innovation Center and Publishing Executive Magazine in New York City last week. Mr. Lacy delivered a prescription sure to heal those who are willing to listen and follow it.
He engaged the audience with a passionate, transparent and honest discussion, answering questions, as frank as he can be, and at some cases, just saying he did not know. Simple, but powerful.
Highlights of Mr. Lacy’s discussion…
There really isn’t any such thing as a tired media brand as there are often times tired marketers around that brand.
Our sales in print are up more than our sales in digital. Not on a percentage basis but on an absolute basis. Two percent, guys. You have 98 percent that’s still in print. I’m a huge believer in the tablet. It’s the first time you can bring together what was in print but the seamless transition to digital and we can add video to it, it’s got to be a richer experience right, but guess what? She wants print. So we have to do all of it. It’s about that simple.
I would love all of our consumers to be rushing to the tablet but in fact industry wide except in some very vertical publications that create time sensitive information, it’s 2 percent of the audience. And don’t let anyone fool you with other numbers because it’s not true.
But the heart and soul of the Meredith Corporation is really our national magazine brands that have been aggressively extended to new platforms over a very, very long period of time.
Read on to discover more words of wisdom from Steve Lacy, Meredith Corporation’s Chief Executive Officer:
The Power of Better Homes and Gardens:
Better Homes and Gardens is almost 90 years old, and it has remained very successful over lots of evolutions in our culture. So I always think there really isn’t any such thing as a tired media brand, as there are often times tired marketers around that brand.
On Where the Money at Meredith is Coming From:
I’m going talk a bit about Meredith maybe for some of you who aren’t as familiar with the company, and then talk about some of things that we have done, and I think about all these newer activities in addition to our most important activity which is our printed consumer magazines because even to this day, it’s still where we make the vast majority of our money. So, I’m going to talk a lot about many new things but they are all built on a very solid foundation of print. So it’s like in addition to it’s not in exchange for — at least not in our world.
On Meredith’s National Media Group:
This is where we create, and in a platform agnostic way, distribute our content nationally, and sell our advertising nationally — again in a very platform agnostic way.
On the Heart and Soul of Meredith:
The heart and soul of the Meredith Corporation is really our national magazine brands that have been aggressively extended to new platforms over a very, very long period of time. Samir mentioned that we have a very, very focused portfolio of brands and products. So when we have the opportunity to look at a potential acquisitions, the very last people who come into the room are the ad page sellers because what I’m most interested in is what our circulation marketers believe our knowledge of the consumer and our consumer database can do for that brand. Because if in fact we can make the circulation stronger, if we can increase the rate base, if we can extend it to other platforms, I promise you we can find somebody to sell advertising into those platforms. Not that it’s easy, but it’s impossible without a strong consumer connection
On Meredith’s Audience Reach:
We do in fact reach 100 million unduplicated women every month, and 45 million of those interactions are in our digital environment.
On The Strategy for Growth:
So these are really the five key growth strategies that we work on each and every day. From maintaining our content and our connection with the consumer in a very fresh and vibrant way all the way to continuing to look in the marketplace for other brands that we can add to our portfolio that we can add value to and grow over time
On the Myth that Print is Going Away:
There is this very unfortunate belief that everything in print is going away. And there are some very challenged print media brands, but in most cases, they are print media brands that create time sensitive information. So, if you didn’t read it today, or this week, by the time you get next week’s, it’s yesterday’s news. But most of us are not in that business. We are in an enthusiastic area. The vast majority of the content that we create in this industry is in fact, over the relative near term, evergreen content that can be very easily extended across platform. And I dismiss the naysayers who say, “Oh my god you’re in the magazine business, have you bought your coffin yet?” It’s simply not the truth.
On the Revenue from Digital Compared to Print:
Now I’m going to talk about digital, including tablets.Today we spend $300 million on things that I do not think are particularly valuable to our consumer. Paper, printing and about $100 million to the postal service. So, I would love all of our consumers to be rushing to the tablet but in fact industry wide except in some very vertical publications that create time sensitive information, it’s 2 percent of the audience. And don’t let anyone fool you with other numbers because it’s not true. So, I would love to get out of the paper business, but we don’t have 100 million women rushing our corporate office telling us no more print. They in fact like the print, they in fact like the website, they like the tablet if they’re traveling, and if they’re in the grocery, they want a recipe from allrecipes on their smartphone. So guess what? They want it all. And what we have to do is figure out an efficient way to maintain that connection and try to find some way to monetize all that digital content we’re creating — the vast majority of which is not monetized in our industry today. But we have to be there so the trick is how do you do it in an efficient way and not end up bankrupt in the process?
On the Importance of Research in Creative:
I said if you don’t listen to the research, then you need to go find another job. Because so many of these creative people get a little disconnected from what the consumer really wants. And I think those of you who are leading businesses and if someone is telling you that they know more about the consumer than the consumer does, that’s a big problem. So we do a lot of enhancements, they are all research-based, and we listen, very carefully. If they don’t like something we’re doing we stop, and we try to provide them the content that they would like to receive. We always try to make it aspirational, so that there’s something to be learned.
On the Launch of allrecipes magazine:
We will launch an allrecipes magazine at a guaranteed rate base of 500,000 and like I said, we’ve never sold orders as easily. So, I think you want to keep all those things in mind as well all look toward the future. And I don’t think there’s been another magazine launch off of a digital brand at that sort of a scale, and all of those orders were paid with real American money.
On the Use of Digital to Move Transactions:
We have been rather successful at moving more transactions to a digital interface, and of course, the larger digital scale we have now helps us with that. We make about $5 more per order on every digital order compared with direct mail.
On Why Sales in Print are Up More than Digital:
Our sales in print are up more than our sales in digital. Not on a percentage basis, but on an absolute basis. Two- percent, guys. You have 98 percent that’s still in print. I’m a huge believer in the tablet. It’s the first time you can bring together what was in print but the seamless transition to digital and we can add video to it, it’s got to be a richer experience right, but guess what? She wants print. So we have to do all of it. It’s about that simple.
On Making Your Brand a Part of Your Customers’ Life:
But more importantly, it’s about making our brand a bigger part of her day-to-day life. We know she shops at Walmart. So if she’s going to pick out towels, I just assume they’d be Better Homes and Gardens towels, or tabletop, or shower curtain, or decorative pot fora deck — that kind of thing. I think that helps with newsstand sales and subscription renewal and watching our daily television show that we create. I think it’s just about surrounding her with the brand.
On the Freedom of Editorial and Creative at Meredith:
We never mess with the creative group. We’ve got little creative groups all over the country. We’ve never fiddled with them. Sometimes they’re in remote places. Eating Well is up in Vermon,t so it’s still up in Vermont. But we bring the sales and marketing together. We bring all the purchasing together. We bring the finance together. And those things that either the consumer customer can’t see or the advertising customer can’t see, we centralize. We don’t mess with the editor-in-chief, we don’t mess with the creative vision because that’s really how the audience got aggregated. So my board goes crazy with all these little offices we have around the country but I don’t mess with those creative people. Nor do they ask for my advice on cover design and other things like that. Some day I’m going to get to get to pick a cover and I’m sure it will bomb.
On When Women Use Digital:
Our digital is always at the highest at two times of the day. And when are those? Noon and four o’clock in the afternoon. She’s at work. She’s getting her recipe for tonight from the office. Watch what you see assistants doing. She’s at work. The highest traffic on BHG is never at seven o’clock at night — she’s trying to get the kids in bed. Never. Never has been since 1995 when it was launched. Noon hour and 4-6 p.m. This is like a regular person who shops and cooks and cleans. She has to do it all and nobody’s helping her — certainly not the husband.
On the Minimum Circulation Needed for a National Magazine:
Well, generally speaking for the advertising part of it to work, we have to have about a half a million guaranteed rate base But generally speaking, it’s more, what’s the rate base, and is that rate base healthy and profitable and can we sustain it or if it’s too small can we fairly quickly make it big enough that then it fits into the portfolio.