Why Australia's magazine publishers are struggling with digital strategy

I've a theory why Australian magazines are struggling to develop their digital audiences - they're hamstrung by portal deals done more than a decade ago that robbed them of the ability to develop in-house digital skills.

Plenty of people in Australia have had a rotten week, including staff on the five Bauer Media magazine titles which were shut down on Wednesday. 

But perhaps the more significant news from Bauer came a few hours later. Christian Fricke, the architect of its “Now to Love” digital strategy is leaving the company.

I’ve always liked the point of view that there are two types of communications planners - lumpers and slicers - those who want to lump together as much of the population together as possible, and those who want to slice it as thinly as possible.

What’s emerged in alternative strategies for digital media publishers is similar. And in Australia at least, the lumping is what is now threatening the magazine industry.

There are those who have gone for selling mass audiences, and those who have gone for targeting specific audiences.

In Australia the pendulum swung firmly over the last decade or two towards the portal approach of building big audiences, treating them all the same, and selling those aggregated masses to advertisers.

That left little room for the craft beloved of print magazines, which thrives when nurturing small but passionate audiences who have a lot in common.

Over the last few days, a tonne of new evidence has emerged that simply chasing mass audiences without a specific monetisation plan does not work.

Mashable’s move three or four years ago from being a site about what’s new and interesting in social media to a bit of everything appears to have failed.

The three-year-old Australian edition of Mashable rarely makes a splash. Even its upwards blip in this week’s Nielsen digital news rankings only served to emphasise its lack of reach. An audience of 284,000 is untenable for a mainstream site.

The decision to sell to Ziff Davis for a reported $50m suggests a site whose value (and momentum) has declined drastically over the last 12 months.

Then there’s BuzzFeed, the ultimate champion of native advertising. Yet there’s increasing evidence that it has struggled to build a native advertising model at sufficient scale to support its offering. The Wall Street Journal reported in the last few days that it may miss its revenue targets by 20%.

Locally, HuffPost doesn’t seem to be working, certainly not as a joint venture with Fairfax Media. I can’t remember the last time I saw a local HuffPo article shared on social media by anyone I know.

I wouldn’t be surprised to see the two partners go their separate ways in the coming days.

The smoke and mirrors of Lisa Wilkinson as an editor-at-large for HuffPo who barely files an article for the site (just 15 in the last two years) gained a few headlines early on, but didn’t help find a committed audience.

The arrival of the New York Times Australia has also been a fizzler. While it’s a magnificent title in print and online for those interested in US and wider international coverage, its Aussie output still feels like it’s being mainly written to explain those wacky Australian larrikins to a US audience.

When it comes to global brands creating credible local operations, the exception that proves the rule is The Guardian Australia, which has at least developed its own personality.

But of course, The Guardian is almost certainly still losing a shedload of money locally. Plus, it’s only here because of the seed funding of philanthropist Graeme Wood.

And what all the international brands I’ve just mentioned have in common is that they have deep pockets.

They’ve disrupted the existing media models without being expected to turn an immediate profit. Reach and mass have been the priority.

But it feels like the easy venture capital that gave the likes of BuzzFeed and Mashable the ability to chase audiences without making a short-term profit is coming to an end.

Which brings me back to Bauer’s digital strategy.

Although it may have improved revenues in the short term, I’m not convinced that the networked “To Love” strategy is the right one for a magazine publisher.

The powers that be, either here or back at Bauer’s German headquarters, decided that the company’s digital future lay in the creation of a number of networks, featuring the consolidated content of its various titles. That includes Now To Love, Homes To Love and Food To Love.

This aggregated content may help create a better advertising story, but it doesn’t reflect how consumers think about their favourite magazine brands.

The result of this is that Bauer now seems stuck in No Man’s Land. These digital verticals haven’t resonated with consumers.

And meanwhile, the individual magazine brands - Bauer’s most important assets - have languished in the digital world, with little resource invested in creating fresh digital content from the individual brands. And worse still, separate editorial teams for print and digital means there’s little chance of unified magazine brand personalities.

If Fricke had a bolder vision beyond content aggregation for Bauer’s digital operation, then his departure means we won’t see it.

Of course, many of the same criticisms could be made of the country’s second-biggest player, Seven West Media’s Pacific Magazines, too.

And the same historic factors are behind the struggles of both Bauer and PacMags.

Much of the fault may lie with the decision by the owners of Bauer (then ACP) and PacMags more than a decade ago to outsource the digital thinking, as it all must have seemed a bit hard and, at the time, marginal.

So 20 years ago Kerry Packer tied in with Microsoft for the nineMSN joint venture and Seven did the same with Yahoo7.

These portal plays may have made commercial sense when it came to selling big audiences to advertisers. But they also went against how magazines work - knowing an often fairly small audience really well.

Plus, the price of accessing the digital giants’ know-how and expensive technology, was that little of the digital expertise ended up in-house at the publishers. Instead it lived in another building across town.

As time went on, the magazine titles found themselves unable to build up their brands online, instead locked in to being part of the joint venture platforms. The editors were in truth print editors, having almost no impact over digital content or strategy.

The legacy deal even continued for a while after Nine sold ACP to Bauer.

The same goes for Yahoo7. It took changes of Yahoo ownership in the US to give PacMags the ability to start to take back its own digital destiny. But that redrafting has been more focused on Seven’s screen content than its seemingly unloved PacMags magazine titles.

Strategically, PacMags has finally moved to get all its mag titles online outside of Yahoo7, but only over the last couple of years.

The lack of big strategic moves from Pacific Magazines evident in recent months makes me suspect that the company is still for sale, with Bauer one of a very small number of obvious potential acquirers.

Meanwhile, magazine publishing in Australia now has a generation of editorial and sales people who - unless they’ve worked elsewhere - are discovering digital publishing for the first time only now. I suspect many of them still don’t know what they don’t know.

Perhaps because it was not encumbered by the digital JVs, the third magazine player, News Corp’s NewsLifeMedia, has made the transition better.

The likes of Taste is a powerful multi-platform brand.

And my favourite example of the potential power of a magazine brand is News Life Media's plucky little GQ.

Admittedly a franchise, GQ embodies the commercial opportunities that can be created purely by investing in brands.

GQ sells just a handful of copies and is published only a few times a year now. In reality, it’s a minnow, but you wouldn’t know it.

When News Corp’s internal Blue Book of company accounts was leaked to Crikey in 2014, it was possible to see that the unaudited GQ only sold 14,000 copies. (Odd that GQ’s most recent Emma readership number is supposedly 155,000, but we’ll leave that one aside for today).

Yet GQ appears to be so much bigger because of its digital presence and initiatives like the GQ Man of the Year Awards.

A tiny audience can be a valuable, and monetisable, one.

The pendulum is swinging away from aggregated audiences.

But with so much renewed focus on the murkiness of the programmatic-tainted digital supply chain, advertisers blindly buying an audience has gone out of fashion.

If Australia’s magazine publishers have a future beyond managing decline by closing more titles every few months, it will come from refocusing on the powerful brands and putting resource behind serving those individual audiences.

This is an extract from my weekend Best of the Week email for Mumbrella. Subscribe for our emails via this link if you like