Playing Away

Publishers aiming to expand their magazine readership overseas face a myriad of strategic and operational issues. Before undertaking an expansion programme, you need to work through these issues to maximise your potential for success and limit your exposure to risk.

There are two basic strategic issues to address before getting started.

The first, which may seem obvious, is "why take your publication into a new market?" Are you looking to add readers to boost advertising rates? Increase profits from circulation revenue growth? Or build awareness for the brand? The answer to this basic question will dictate potential scale and guide investment required to achieve your objectives.

If you are looking for advertisers to foot the bill, it’s important to know whether they’re interested. Most national brands will have little or no interest in reaching international readers – and certainly will not want to pay for the privilege.

And don’t assume a global brand will automatically want to reach your international readers since many advertising budgets are allocated by market and non-UK distribution may be viewed as wastage. Advertisers have even been known to forbid their ads running in export copies, requiring expensive book remakes to remedy the situation.

For those advertisers wanting to reach international readers, you need to determine which markets are of interest, what demographics are desirable and ensure that your circulation team understands the objective. There’s little point in asking advertisers to pay for readers in Japan and Australia if what they wanted were readers in France and Germany.

And lastly, you need to be realistic about how much incremental revenue can be generated from advertisers to ensure that generally more expensive international distribution and marketing costs are more than adequately covered.

Has it international appeal?

The second strategic issue relates to your product. In short, does it travel well? Is the content relevant to international readers? Ideally, before launching an expansion plan, it is a good idea to conduct basic consumer research to answer this question. If budgets are limited, you can self-assess the potential for your titles, especially to markets where English is not the first language.

Two types of English language publications have been quite successful at crossing international boundaries. The first are general interest titles like Time and The Economist. These titles have large international readership, heavily purchased by locals with a desire to gain a perspective on world events from media sources outside their own countries. Another type of publication that travels well is those of a technical nature, like industry journals and computer magazines.

Ideally, consumers would prefer to read in their own language. But you can improve their experience with your publication by making sure your editors are aware of foreign readers and are mindful that some content may not be widely understood and should be avoided.

Other publications just don’t travel well. Consider magazines related to television personalities seen only in the United Kingdom; are readers in France interested in Richard & Judy? Publications of this sort will have limited appeal to international readers, although can be targeted at UK holidaymakers and the ex-pat community.

Routes to market

Once you have determined your reasons for expansion and that your titles are relevant to international readers, there are a number of routes to market.

The easiest and least expensive route to market, and in which many publishers are already involved, is retail distribution. Distribution in most countries is well developed and works much the same as in the UK, with publishers supplying national distributors who supply local wholesalers who sell to retail outlets. Product is handled on a fully returnable basis and you’ll be offered opportunities to promote your titles. You may decide to self-distribute (e.g. supply directly to national distributors in each country) or you can employ an international distributor to handle those relationships. Terms are similar to those in the UK, although you need to keep in mind that shipping costs will be significantly higher.

A complicating factor involves the use of local currency pricing at retail. You need to decide in which currency to invoice your distributors. Invoicing in sterling will put currency risk on the national distributors with fluctuations expanding or contracting their margins. As margins go down, sales effort goes down and calls for increases in cover price go up. But passing currency fluctuations to consumers can lead to your publications being priced out of the market, thereby reducing sales.

Another potential problem with international distribution is tracking what happens to copies. Since wholesale and retail data is hard to come by, it is not easy for you to follow copies through the chain, ensuring that distribution is optimised. This lack of information also makes it easier for distributors to take delivery of copies to satisfy publishers’ demands for expanded distribution but to destroy the copies at the warehouse, as wholesalers aren’t interested in handling the product. So you need to be realistic about expectations and make sure distributors know your objectives.

Subscriptions also provide a good way for reaching international readers. Consumers in many countries, such as Germany, have much stronger propensities to subscribe than found in the UK. Subscription selling media such as off the page, insert cards and direct mail all work quite well and are relatively easy to execute. There are also many subscription-selling agents quite eager to expand offerings to their customers. For business-to-business publishers, there are opportunities for reaching new, controlled circulation readers as well. You can use one of several list brokers specialising in international markets or deal directly with national brokers.

Before getting started it is a good idea to make sure distribution procedures are in place to ensure timely arrival of magazines to your customers. Also, that reasonable customer service capability is in place, including phone coverage during office hours in the customers’ own time zone. Many publishers tend to charge foreign customers more but expect them to accept lower service levels and then wonder why retention rates are not what they anticipated.

Pricing and payment methods

Another item to consider before developing your promotions is pricing and payment methods. For most consumer magazines, it is preferable to offer subscriptions in local currencies, as leaving currency conversion up to the customer will cause confusion, leading to declines in response. However, this will create its own set of problems and expose you to currency risk. You should work with your bank to ensure appropriate accounts and procedures are set up to handle multi-currency collections, or use a firm specialising in collections of foreign currencies. Whatever the choice, you should beware of all potential costs involved, particularly if processing volumes are expected to be low and spread across many currencies.

Payment methods are also critical to making sure promotions work successfully. Cheque and credit card offers can be used as in the UK, but there are other options in some countries, such as bank giros. And direct debit is not widely available.

But you should keep in mind that cash only offers may limit your response as potential customers may know very little about the publication being offered or the company making the pitch. One widely distributed and well-known international publication found that only 40% of its subscribers had heard of the magazine before subscribing. This makes use of "bill me" and "free issue" offers especially attractive to international readers. The success of this two stage selling process, requires attention to your billing series, extra care from the fulfilment bureau and timely delivery of the product. Lastly, don’t rely on customers to have to figure out what postage to use or provide them with reply-paid postage only usable in the UK. A good option is international business reply accounts that allow for posting from most overseas locations.

And finally ...

A final consideration before starting to sell subscriptions overseas relates to the specifics of individual countries. First you need to consider language. Generally, promoting an English language title in English works quite well when offers are included in the magazine or via direct mail targeted to readers of other English language publications. But introduction of complicated offers, like prize-draws, make use of the local language more appropriate – both to avoid confusion and to speed potential customers through the ordering process. But when promoting in local languages be sure to make it clear that the product will be written in English to avoid disappointment.

A second point is to consider the differences in local laws and customs that may put promotions at odds with the authorities. Each country has somewhat different rules related to promotion and data protection. While smallish promotions tend to go unchallenged, it is generally advisable to retain the services of a local agency or an international specialist to review promotions to ensure compliance.

So if you are considering the leap into international markets make sure you take a long hard look at your objectives and potential return. For the uninitiated it can be a minefield, but with the right execution it can also be a goldmine.