Long-time publishing innovator Bryan Welch shares lessons he learned from launching a slew of profitable magazine business, from Mother Earth News to Motorcycle Classics. [reprinted from my blog post on www.pubexec.com]
Tapping into one’s passion can be a powerful fuel for any business enterprise, but it is particularly vital for the magazine business. Bryan Welch, the former CEO of niche media company Ogden Publications, says that staying true to his passions and embracing the passions of his readers was the secret to the success of Ogden’s top titles like Farm Collector, Motorcycle Classics, and Mother Earth News. And that philosophy continues to guide his work today at B the Change Media.
During Welch’s leadership, Ogden Publications experienced steady growth in audience, revenue, and profits. Welch spearheaded the company’s diversification into branded products, events, and television, and personally oversaw its successful insurance-marketing enterprise. In his last five years at the helm, revenues grew by 15% and profits were up 34%. In that same period, audiences more than doubled from 5 million in 2009 to more than 12 million at the end of 2014.
In 2015 Welch stepped down as CEO of Ogden to launch B the Change Media, an online publication serving B Corporations, also known as benefit corporations, which are for-profits dedicated to making a positive impact on society. B the Change Media sells subscriptions to B Corporations to distribute to their employees and supplements that subscription revenue with ads. B the Change recently suspended publishing in print and will continue publishing online.
In the following interview, Welch explains how fueling readers’ passions leads to profitability, and shares lessons he learned from Ogden Publications and B the Change Media.
Why did you go into publishing?
I discovered at the college newspaper that people would pay me a bit of money to write stories. I love writing stories. When I graduated I was hired to work at the local paper. I loved being engaged in the story process: writing, editing, photography, and design. At that time, journalism was an idealistic profession. The feeling of going to work every day to do something that matters was addictive.
My family and I moved nine times during the next 15 years as I worked my way around in the community newspaper business as a reporter, editor, and finally a publisher of local newspapers. Once I was a publisher, I discovered the newspaper business was boring. It was a very mature business that ran according to business norms. There was no business creativity. So I went to grad school to study business and was then led to do something entrepreneurial.
In 1996, a family I had worked for in the newspaper industry launched Ogden Publications, Capper’s and GRIT were our first acquisitions. They gave me a great 19-year run.
To what do you attribute your partnership with the Nutting family lasting almost two decades?
The family runs a company that has very little corporate management. They discovered that if they hired the right people to run their local papers, they could do without middle management. As a result, I was lucky to have creative opportunity. They were hands-off.
When we launched the publishing company, we turned the first title around quickly. It cash flowed soon. We launched Farm Collector and it cash flowed immediately. When we acquired Mother Earth News it was an instant success. [For 10 years leading up to 2013, Mother Earth News was the fastest growing magazine in North America. In 2014 it was also the magazine with longest time spent reading by its audience; and the magazine most likely to be a reader’s favorite according to MediaMark Research.]
Our good fortune gave Ogden Publications a credibility with its owners. The family gave us freedom to innovate and explore.
What were important lessons you learned from managing Ogden Publications?
I came into national magazines with no experience and I discovered in 1996 that there was a lot of inefficiency built into the business. We immediately saw that our business plan for many of our titles would be driven by circulation revenue more than advertising. But there was a steep learning curve. The newsstand business is difficult and not as lucrative as it should be. Direct mail was the primary source for attaining paid subscriptions, but it can be risky. You invest millions of dollars and put your business at the risk of weather, news events, etc. A key turning point for us was when we created an early lifetime-customer-value model. This allowed us to design promotions with better strategic understanding of our goals.
Our lifetime-customer-value model was essentially a discounted-cash-flow analysis of each magazine buyer, whether a subscriber or newsstand customer, that evaluated all the revenues from that reader. We looked at specific longevity of reader groups by source and adjusted our promotional spending so that each reader we acquired met our efficiency standards. Those standards varied from title to title. Growing titles that were more ad-driven were managed to make sure a subscriber group had paid off the promotional investment by the second renewal. Lower-growth, circulation-driven titles were required to pay off their promotional spending at acquisition.
It took us years to make Utne Reader profitable. The reality that idea (aka intellectual) magazines are uniformly difficult to make profitable was a hard one for me to swallow. The battlefield is littered with idea magazines and I was slower than I should have been to realize that we had to operate on very low expenses. It was painful getting there. Over the course of several years we gradually decreased the editorial staff from 10 people to one talented person and that was the key. That publication won’t support two editors. One of the other lessons I learned is that the national advertising market was not interested in niche magazines. Visiting the agencies was only helpful after I had a relationship with the client. Then and only then did we have a chance at some business. I batted zero for 19 years. Other people have done better.
What principles helped guide you toward success at Ogden Publications?
I had two strategies for growing the company. One, if we had someone on our staff that had a passion for the topic, then we considered launching or acquiring a title in that niche. For example, our IT director had a passion for antique tractors so we launched Farm Collector. We started Motorcycle Classics because we had an employee whose dissertation in grad school was a business plan for a classic-motorcycle magazine. Second, if we discovered a passionate audience that significantly overlapped with one of our existing audiences then we would seriously look at a launch, a brand extension, or an acquisition. For example The Herb Companion and Herbs for Health had nice overlap with Mother Earth News.
Coming to the subject matter with real passion is one of the most important things you can do. If you and your editors are not interested in the topic, you are not going to be a thought leader. These two strategies enabled us to create relationships and connect with others. And that’s how Ogden grew to become the leading information resource serving the sustainable living, rural lifestyle, farm memorabilia, and classic motorcycle communities. In 2014, across all brands the company had almost one million paid subscribers, more than 3.5 million unique visitors each month, and multiple sources of revenue. The depth of engagement with your audience is more powerful and you can measure that in dollars.
In late 2015 you left Ogden Publications to launch B the Change Media. Why did you leave Ogden and why B the Change?
It is time for business to be a force for good in the world, and a lot of other people think that, too. At present, there are more than 2,000 certified B Corporations with 70,000 employees operating in 50 countries and representing 130 industries. They have a shared purpose to harness the power of markets for social change. This has become a global movement, yet there was no hub for their stories, tools, and insights. B The Change launched as a multi-platform media company to fill the gap.
My business plan cornerstone was to sell bulk subscriptions to B Corporation employees and augment that with paid advertising (sponsorships) in print and online. We launched in the summer of 2016 as a quarterly with a print run 100,000 and placing 70,000 on the newsstand. After a year and publishing four issues, we ceased publication of the print magazine. B the Change will continue as a digital product with no significant sources of revenue until when, and if, it is repositioned.
The gamble is always, “are you early?” The revenue was not there. We had great salespeople working very hard. I would have long conversations with clients debating between a $1,000 or $2,500 annual spend. You can’t have very many of those conversations and survive. It’s a small community. We hoped that the community of B Corporations would be the wind beneath our wings, but there were not enough of them and there was not enough money.
It’s disappointing to me that monetizing without a physical product is next to impossible. But the rest of the world is unaware of how the business of publishing works and how necessary the print product is to the business model. Thousands of media brands have lived and died discovering that.
When I went out to sell bulk subscriptions to the community, I encountered this reluctance to buy and distribute print magazines. I found it difficult to gain traction when I explained the benefits of print.
How much of the reluctance to acknowledge the importance of print was generational?
None of it. As a matter of fact, some of the younger employers were open to it because they see the value of print. It’s the popular notion that the print media is obsolete that was our biggest disadvantage.
We did okay, we had mid six-figure sponsorships in the first year. But all of that came in association with the print magazine. And I could not talk clients into spending money to subscribe to the print magazine for their employees.
One of the things I say to people all the time when the topic comes up…there is this beautiful 750,000 circulation magazine called Wired and it’s about digital media. If there were no value in the print product, why would there be a Wired magazine? I can’t explain why there is a Wired, but the evidence indicates that many people find value in a print product.
What is the most important metric for measuring health and success in publishing?
When I came into the business, I was astonished at the idea of a rate base. I discovered in the magazine business this labyrinth of representation and misrepresentation, fake numbers that had grown up over time and served the purposes of major publishers and agencies in various ways. I understand the historical roots, but it reminded me of the medieval Catholic Church. Reach is created in so many flimsy ways; it has no substance.
Now that we have the digital industry with all its metrics, everyone would be better off if we did something much simpler. I know that I can make money if I build metrics around engagement. If I double down on content that gives me deep engagement, then I can sell subscriptions. Engagement gives us an audience we can monetize. We would be better off if we valued and sold engagement and we taught advertisers to speak to those readers with real, passionate interests.
At Ogden, we valued engagement. That’s where the money came from.