Editorial is your best marketing - Jonathan Harris

Jonathan Harris: Editorial is your best marketing tool - invest in it.

Bizcommunity.com: We were often told that if a ‘boat' had to survive the storm, the only language its captain had to speak was cost-cutting. We saw marketing budgets and other ‘unnecessary costs' slashed and staff laid off. How did you handle the downturn?

J H: I have always run my businesses the same way in good times and in bad, yielding average returns in down periods and superior ones during the up periods.

Once you've been through a few economic cycles you quickly learn that you need to find the lowest possible cost structure at which you can operate successfully and generate sufficient returns throughout the cycle.

Making negative returns that force you to cut deep means there is something systemically wrong with your business model or your brands.

We have always had some of the lowest print returns in the industry, very high revenue per employee, low cost of sales and I always ensure our marketing has a tangible ROI, so good times or bad, the marketing budget is always there.”

Bizcommunity.com: The SA economy has performed slightly better lately - something many believe spells the end of the recession and good times ahead for brands. But some analysts have said consumers' purchasing habits will never be the same again, as they will probably abandon brand loyalty and focus on cost-effective products that can bring them value for their money. This is probably another round of stress for magazines. What are your comments on this, and what mechanisms did you put in place to restore consumers' confidence in brands, in this case magazines.

J H: I have a very simple philosophy: editorial is your best marketing. Invest into this, build those close meaningful relationships with readers that all editors and publishers strive for and magazine stress is what your competitors feel.

Our magazines are seen as valuable relationships not impulse purchases and this means, that if we do our job, the future for our titles looks bright.

Surely, the economy has impacted all types of consumer spend and has changed some types of consumer behaviour, but many good magazines have actually proven they can do much better than other product categories that are also impacted by discretionary spend and consumer purchasing habits.

Magazines play a far richer role in the lives of their readers than other products and services, that competitive advantage is only theirs to be squandered.

Bizcommunity.com: You said something about 'fundamental changes needed in the industry' - what changes?

J H: Publishers have to re-look at what they do and decide what business they are in, and that doesn't mean just looking at digital strategy. Thought24 is in the business of “Behaviour Intelligence” not “Publishing”.

Our magazines are the product of a very sophisticated process that starts with understanding complex consumer needs and behaviour, interacting with this using words and pictures, building very deep editorial relationships and then actually playing a part in influencing consumer's future behaviour.

Not many businesses build this much consumer intellectual property (IP). For Thought24 this means we look at a large number of other opportunities that leverage this IP and combine it with the marketing reach we have.

We don't just focus on the relationship our readers have with their title, we focus more holistically on the behaviour of the consumer.

We know our readers and we can reach them cheaply, and this is a very exciting business model as our target product and service portfolio now extends beyond print. Effectively we have stopped seeing publishing as our only revenue stream and started looking at how to make returns out of the IP we have about our consumers.

Bizcommunity.com: In your view, what is the meaning of reader engagement and how do you think it can be modelled, measured, and planned around? And what are the key issues today's advertisers and publishers face in regard to reader engagement?

J H: The industry is fixated with numbers, AMPS for example, and as much as they are important they are not the complete story that drives ROI.

As an industry we don't invest enough into research. At Thought24 we have committed to spend 1% of revenue on research, and that by publisher research standards, is a big number.

Publishers have not helped advertisers understand sufficiently the impact of idea and message and how this, for different reader clusters, has a direct impact on ROI.

Our research department set out this year to understand and define the variables around how readers engage with their magazine of choice and how this impacts ROI.

We have since delivered back to advertisers a matrix that allows planners to assess the likely effectiveness of their combination of planning and creative. The one sure way to raise ROI is to take on less market and title risk, so we have tried to help advertisers understand where this risk lies and then avoid it.

Brief biographical notes:

Jonathan Harris began his career as an investment banker working at Morgan Stanley and Merrill Lynch in the UK. At Merrill Lynch he was a member of the globally top-rated UK equity sales team where he worked with some of the country's leading FTSE100 companies and institutional investors.

In 1997 he left the banking sector to launch a children's nursery group, which established the first nursery in the heart of London's financial district.

He lives in Melrose Arch, Johannesburg, with his wife Candice Derman, former Generations and Backstage actress.