Magazines Online:
They're Finally Getting It
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by Robert Spiegel
Looking back it's amazing to recall that magazines
were once considered the best-positioned companies to succeed online.
In the ancient days of the early 90s, magazines seemed to have it
all: a brand name, years of archived editorial content, a deep list
of advertisers who could be lured to the exciting new world of banner
ads. Banner ads would produce the revenue to make it all profitable.
Banner ads.
It looked like an easy transition, but magazines experienced
an instant red-ink wrenching. It was so bad that breaking even was
bragging rights. Meanwhile, to make magazines feel even worse, sites
like CDnow (big bucks in mom and dad's basement) made cyber profits
look easy.
Poor magazines. They universally made the same mistake.
I made it myself in the mid 90s when I owned a small niche magazine,
Chile Pepper. You present content online and update it with news and
articles at specific intervals. You draw your readers in to create
immediate traffic. You drive it with advertising that hangs above
the articles. You use your editorial staff to produce content and
your sales crew to sell banner ads. Sounds great, but it's a print
model that doesn't translate online.
When it became clear the model wasn't working, magazines
took the natural course: they put more money into it. More of the
same amplified the losing results. Magazine conferences presented
talks entitled: "Will Websites Ever Produce Profits?" Then recently,
a few magazines started changing their web strategies.
E-commerce doesn't live by advertising. It lives by
selling products and services. It attracts customers because it's
efficient and cheap. The Internet works for books, CDs, airline tickets,
e-trades, collectible beanie babies. Retailing goes against the grain
of magazine thinking. When you're a magazine, you sell advertising,
not products.
But recently, a few magazines started making deals
with retailers to give their customers what they really want. Folio
reports that The Hearst Corp. has signed a deal with Whirlpool to
create brandwise.com, a comparative shopping site. Reader's Digest
has partnered with a WebMD to sell Net-based services to physicians.
This fall, Conde Nast's Epicurious site will begin selling Williams-Sonoma
products. All this activity is the sound of the magazine industry
getting it.
Epicurious attracts 2 millions unique visitors each
month, making it the gorilla (dominant leader) food site. It offers
10,000 recipes, wine news, a chat room, a chef and restaurant search
function, all with the company's expected high quality. Ad sales are
respectable -- the site's breaking even. This fall, the Williams-Sonoma
connection should push Epicurious into the black.
"Williams-Sonoma will make the site even more full-service,"
said marketing director Hilary Peck. "It's a revenue driver. We expect
to become profitable with the integration of Williams-Sonoma." There
you have it.
Epicurious shows some other signs of Internet savvy.
The brand is separate from the Conde Nast magazines, Bon Appetit and
Gourmet. They're both great brands, but they're not online brands.
Epicurious would languish if it were simply an add-on to an offline
brand. The site is so strong with its audience, that it has launched
its own offline extension, a weekly television show.
Conde Nast truly understands the Internet economy.
The company runs its websites under CondeNet, a separate company with
its own management team and editorial groups. "Eighty five to 90%
of our editorial is original," said Peck. This a rule magazines suffer
to learn. You can't paste magazine pages on a website and expect visitors
to stick around. And you can't enter the Internet territory and survive
while dragging along remnants of a former economy. One of the codes
of the brave new world is that you go in naked.
