Academic journal article The McKinsey Quarterly

Magazines' Home Companion

Academic journal article The McKinsey Quarterly

Magazines' Home Companion

Article excerpt

Although few magazines make money from their World Wide Web sites, the Web is still an important opportunity.

Magazines know that they can't ignore the World Wide Web, but few of them are doing well there. Of the 100 leading print magazines in the United States, only 27 appear on the list [1] of the 3,000 most-visited Web sites. Nonetheless, the Web offers a natural extension to the intimate relationship between magazines and their print readers. A strong magazine, at its core, isn't just paper and ink; it is a powerful voice that should attract readers across a range of mass media. But to use the Web successfully, magazines need a sound grasp of economic reality.

How can they develop plans for their on-line incarnations? [2] The bad news is that most magazines probably will never make money with a Web site--though they would be foolish not to build one. The good news is that the benefits of a Web site can be substantial and the costs can be contained.

What are the options?

For defensive and offensive reasons alike, magazines must come to grips with the Web. First, the defensive logic: readers expect magazines to be on-line, for almost half of the population of the United States is now on the Web, and its penetration continues to grow. An October 2000 survey carried out by the Magazine Publishers of America showed that more than 60 percent of visitors to magazine Web sites desire both an on-line and a print version. Advertisers, meanwhile, want integrated mass-media campaigns that exploit several channels. Indeed, Web sites are becoming an essential component of the mass-media choices advertisers make--particularly for response-driven campaigns, which elicit information from consumers.

As for offensive reasons to get on the Web, magazines should consider building an on-line presence to stimulate innovation in the core magazine business. The industry is facing flat circulation, the loss of traditional subscription sources, [3] rising postage rates, and the emergence of competitors in new media. These threats can be partly mitigated by a well-structured, well-executed Web strategy.

Two kinds of site

In theory, magazines have a choice: they can build a destination site or a companion site. But in reality, few have the audience or the wherewithal to create a true destination site, so the less ambitious companion site is usually the better option.

A destination Web business, which aims to become the top site in its category, maximizes value for users and extracts money from them by providing a complete and compelling experience. Such a site has unique content and applications that are continually refreshed and can serve as a guide to the category as a whole. A destination site also develops a strong sense of community, both among users and between them and the site. It profiles them, personalizes the site for them, and provides many opportunities for commerce with them.

Ultimately, a destination site can become a vertical portal. One magazine Web site that aspires to this level of scale and attraction is SmartMoney.com, which has created more than 100 interactive financial tools--including portfolio-tracking and -analysis tools, tax calculators, and on-line bill payment facilities--in its effort to become a personal-finance portal. Another destination site, NationalGeographic.com, offers interactive map-making tools and Webcams focusing on animals in the wild.

By contrast, a strong companion site supports and enhances the print magazine by helping to build its brand and reach new audiences while adding an extra dimension for its existing one. The design of a companion site extends the magazine's look to the new medium; the site's content offers a taste of the magazine to encourage people to subscribe. Such a site also offers extra content, often generated by users, as well as customer-service facilities that make it easy for visitors to subscribe, renew, change their address, and check their account. …

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