The magazine industry has felt the nonstop impact of disruption and displacement since the late nineties. Like railroads, telegrams, and more recently, the music business, print media faces an evolutionary emergency as consumers shift to newer technologies and new modes of consumption.
Magazines were blindsided by digital media 20 years ago. Just as they’ve tried to pivot, some new disruption emerges. The result? An extended period of struggle, as ad revenue dwindles, massive rounds of layoffs sweep the industry, and many titles close.
The dynamic now playing out before our eyes can be explained in the context of the “first-curve-second-curve” model of business economics. The model, created by the author, consultant, and futurist Ian Morrison, says that the first curve is a company’s traditional business—all of the activities that led to a company’s success to begin with. The second curve is the future—new technologies, new capabilities, new talent and new audiences. The second curve is the inevitable paradigm shift that makes the first-curve business model obsolescent and ultimately extinct.
The key is to succeed at the first curve while simultaneously jumping to the second. For magazines, the last 25 years have been a continual journey to the second curve. In this report, Ads&Ideas Editor Tony Silber explores the impact of media-industry disruption on ad sales using the “first-curve-second-curve” model, identifying in the process some of the self-imposed impediments that media companies may be grappling with.
By Tony Silber:
All companies, and all industries, face the existential challenge to adapt. In futurist Ian Morrison’s “first-curve-second-curve” model of business economics, the most treacherous curves are hidden. It’s the unforeseen competitor. It’s new skillsets, capabilities and distribution methods that become essential, but seem marginal when they emerge—“edge” activities.
The challenge of the “first-curve-second-curve” model is that “edge” activities suddenly become central, and companies often realize it too late. Things always look best just before a company (or industry) goes into decline. Revenue is surging and profits robust. Once a company knows it’s in trouble, once the red flags emerge, the die is cast. Publishers seeking to reach the second curve need to succeed at what they’re doing and at what they’re trying to become simultaneously. Once a company hits a revenue stall, according to Matthew S. Olson and Derek van Bever in their 2008 book, “Stall Points,” it has less than a 10% chance of ever fully recovering.
Here, says James G. Elliott Co. President Jim Elliott, is where many magazine companies falter, especially in the advertising sales discipline. He and his team have developed a list of the most common missteps around advertising that may prevent publishing companies from reaching the second curve.
“You have to nurture the first curve till it’s no longer possible,” Elliott says. “But what happens in our business is that very often, you can’t get rid of your first curve as long as you’re making money on it.”
#1 When publishers only focus on what’s working now, not next.
“Look at well-run companies,” Elliott suggests. “Toyota, for example. They don’t stop selling the Camry, but that doesn’t mean they’re not evolving it and at the same time tasking another group to innovate with new products. In our company, we’re divided into think-tank groups, where some of our people are trying to improve current processes, and others are looking at new ideas,” Elliott says. “In publishing, we often see folks succeeding in the first part, but maybe not the second. In the first, the print magazine was really prominent. Now, we counsel our customers that it’s the brand that matters.”
#2 If publishers are pitching products, not solutions.
The magazine business, Elliott says, can be incredibly introverted. Many publishers focus on what they offer to advertisers, but not necessarily on what buyers—who are simultaneously navigating to the second curve—need. Be careful of selling features, Elliott says he tells prospects. “We see this a lot,” he says. ‘We just came up with this new product.’ But if you’re selling the benefit of a new product, that doesn’t mean the application is clear and buyers see the benefit.”
#3 When relationship dynamics change—but publishers don’t.
A magazine company may think it has the same kinds of relationships with advertisers that were critical in the past. But chances are they’re wrong. Advertisers and marketers experience turnover. There may be a different team that has different objectives. “In the second curve the relationship is more difficult because personalities are less involved,” Elliott says. “Business is high tech right now. It starts as really high touch, and then it goes to high tech. It swings on a pendulum, and at some point, it could go back.”
#4 If salespeople view the CEO as their most important marketing contact.
It used to be a basic tenet—advertising salespeople were coached to go right to the top and build relationships at the strategic level. But this isn’t necessarily a positive anymore and some publishers may not recognize the change. In big marketers, Elliott points out, ad management is middle management, and marketing has become a much more complex, tech-driven discipline. The CEO or other senior managers may have come up through sales, but they likely haven’t touched it in years—and don’t want to step on the toes of their front-line marketing executives.
“The reality is they may be an influencer on an ad buy, but they are not the decision maker,” Elliott says. “You go in and you prevail, but you just annoyed the VP of advertising, who may be an MBA.”
#5 When publishers assume buyers understand their asset base.
The truth is that marketers now have a much broader range of communications tools and channels, and print media isn’t the centerpiece. “In today’s environment more than ever before, sellers need to listen,” Elliott says. “Don’t show up and throw up—listen. We have to understand what marketers’ needs are and how to articulate that back. Some of what we have to sell may be relevant. Some won’t be. And someone who’s high up in the food chain might not understand what we’re talking about. And they may not tell us that.”
#6 If publishers are selling based on old ideas.
Senior managers in media companies who came up through sales were successful 20 years ago with a certain approach and skillset, and they often insist that their people use those techniques, notes Elliott. “We see this all the time. But their ideas are old ideas that don’t work anymore. And yet, they’re steering the boat.”
#7 When publishers who’ve reached the second curve dismiss the value of the first.
“When an ad sales team is operating in the second curve and doesn’t put any credence in the first, that’s a mistake,” Elliott says. “When the seller, or buyer, doesn’t understand the value of branding, and only focuses on the bottom of the funnel, that doesn’t help the buyer’s brand and it doesn’t help the advertising sales effort.” Beyond that, newer employees may dismiss older sellers as dinosaurs—even when they retain skills that are vital. And younger team members may make up exotic new terms for what essentially are timeless functions as a way of separating themselves from older colleagues. In that case, an organization is fighting against itself.
Tony Silber is now President at Long Hill Media in Trumbull, CT—formerly editor and brand manager of Folio: and related publications.