Crossing Borders With Digital Editions

By Karlene Lukovitz
President, KL MediaLink LLC

Article adapted from June '08 Circulation Management

For B-to-B publishers looking to expand international reach or make it more economically feasible, digital editions can offer a solution to the two key obstacles: timeliness and cost.

Digital editions enable even the most far-flung readers to receive the latest issue instantaneously, rather than wait several weeks, while sparing both subscribers and publishers the increasingly onerous costs of international mailing.

Like domestic subscribers, many international readers also appreciate or even prefer the format because of convenience factors such as low-memory personal archiving of issues; quick issue searching; links to related content and product information; simple forwarding capability; and ready access to audio/video clips and other rich-media offerings.

Today, green consciousness is also a top-rung factor in choosing digital among both international and domestic readers. In last year's installment of PennWell's annual digital subscribers survey, over half of the nearly 5,700 respondents—61% of whom were non-U.S.—indicated that environmental friendliness was a key factor in choosing a digital subscription. (See lead feature, this issue, for results of PennWell's 2008 survey, including the latest on the green factor.)

All of this said, an international component is frequently, but not always, a key component in digital version strategies. As always, this comes down to a publication's business model, markets and audience profile.

For paid publications already absorbing the costs of producing a digital edition, there are clear bottom-line benefits in realizing additional circulation revenue from international digital subscribers, given that added distribution and marketing costs are negligible.

For the preponderance of B-to-B's that are completely or heavily advertising-driven, the core question is, of course, whether the advertising base wants to reach qualified readers in countries outside the U.S.

Years ago, the answer to that question was not infrequently "no" or "not really." But global economics, including the massive buying power represented by emerging Asian nations, have made international markets critical or extremely attractive to marketers of most types of business products and services.

"How many companies can you think of today that aren't multinational, to at least some degree?," sums up Joe Pramberger, publisher of NASA Tech Briefs, one of the earliest digital magazine edition adopters.

Controlling the Mix

Still, some advertisers continue to be U.S.-centric, and most U.S.-based publications—even in high-tech, scientific and other heavily global markets—set and maintain specific levels of U.S. versus international subscribers within their overall circulations. Further, those levels may depend not only on the basic nature of the market, but economic trends.

At controlled-circulation software development title SD Times, digital subs account for about 18,500 out of total controlled circ of 60,000+, including about 6,000 digital international.

That international portion is somewhat lower than it was several years ago. The reason: For some years, the publication's advertisers had been indicating that the U.S. software market was stronger than the international market, explains Ted Bahr, president of parent company BZ Media. But given the now-troubled U.S. economy, software developers now expect much of their growth to be coming from international markets. As a result, SD Times will be increasing international digital, probably by about 5%.

Obviously, a controlled model allows for establishing the optimum mix of job geography, as well as titles and other demographics. And Bahr says he's found that there are more-than-ample sources of qualified international subscribers to achieve that mix.

However, given that email solicitation laws not only vary by country, but are in many cases much tougher than U.S. laws, all publishers have to exercise due diligence in using outside international email lists to obtain new subscribers.

"We rely on our list broker to vet international lists" for legal adherence and qualification. Karen Kinnear Oracle Corp

"It's tricky, so we rely on our list broker" to vet international email lists for both legal adherence and qualification standards, says Karin Kinnear, general circulation manager for Oracle Corp. Oracle publishes Oracle Magazine, geared mainly to IT managers, and Profit, an Oracle applications title for C-level managers.

Further, availability of eager digital subscribers, wherever they reside, is far from the only strategic consideration.

Oracle, which launched its digital edition in January '07, already has large numbers of domestic and international digital subscriptions. In fact, Oracle ranked #1 among all BPA Worldwide-audited titles for the 2007 reporting periods ending in June and December. As of the December '07 period, it had 122,800 digital, of which more than 86,000 (about 70%) were international.

Digital Circulation Top 10, Including International Breakouts

Title	Total Qualified Circ 2nd Half 07	Total Digital Only Subs 2nd Half 07	Digital Only As % of Total Circ 2nd Half 07	Total Digital Subs (Analyzed Issue)	# Digital Intl Subs (Analyzed Issue)	Digital Intl As % of Total Dig Subs (Analyzed Issue)
Oracle	516,000	122,827	23.8%	120,795	86,349	71.5%
Eweek	400,100	65,000	16.2%	65,000	6,133	9.4%
NASA Tech Briefs	190,593	50,188	26.3%	51,372	7,889	15.4%
Redmond	120,123	39,887	33.2%	40,000	5,506	13.8%
Eschool News	81,176	33,121	40.8%	26,662	2,519	9.4%
Dr. Dobb's Journal	120,000	32,333	26.9%	33,500	209	0.06%
Laser Focus World	70,336	20,934	29.8%	20,655	8,193	39.7%
Design News	170,063	20,934	29.8%	20,713	1,038	5.1%
Macworld	311,734	19,975	6.4%	20,488	4,160	20.3%
Foreign Policy	109,553	19,946	18.2%	24,211	1,129	4.7%

However, Kinnear stresses that overall digital still accounts for just 30% of total 516,000 circulation, and that Oracle very much intends to maintain the critical print format. In fact, three out of five readers worldwide continue to want print, and 200,000 international subscribers are receiving print. Kinnear adds that the magazine will probably cap overall digital at 30% to 35%, to optimize the mix for advertisers.

International reach is so important to Oracle's advertisers, and so many of these subscribers continue to prefer print, that—unlike most controlled B-to-B's, which require international subscribers to foot mailing costs—Oracle finds it cost-effective to absorb those mailing costs. Key international markets include India, Latin America, Africa and the Middle East.

At the same time, paying the mail costs for print–preferring international subscribers makes the cost savings on every digital international subscription all the more dramatic for this magazine. So, while Oracle hasn't seen much demand among international (or domestic) print subscribers to convert to digital—and thus far, there's been little focus on promoting such conversions—the magazine does target international segments with new-subscriber digital email campaigns, as well as provide the option in all of its print and online new and renewal forms.

Both Paid and Controlled Models Can Fly

For many controlled B-to-B's, offering print to international readers doesn't make sense within the overall business model. And for others, the need to charge significant prices to cover mailing costs tends to ipso facto limit the demand for international print particularly when a free, digital option is available.

Among Pennwell's total 38 titles, just two have no digital version. Two are digital-only, and the rest have overall digital circulation portions ranging all the way from 4% (RDH/Registered Dental Hygienist) to 79% (Oil & Gas Journal, including digital site licenses). On average, digital represents about 20% to 25% of circulation across the titles' files–and international represents a significant portion of digital for many, according to Gloria Adams, senior VP, audience development and book publishing.

For example, among primarily controlled titles, international subscribers make up about 40% of Laser Focus World's total 20,000+ digital circulation; about 70% of Solid State Technology's nearly 12,000 digital; almost 100% of Advanced Packaging's 8,500 digital, and about half of CleanRooms's 7,500 digital.

Compare zero cost—plus immediate delivery—to paying up to hundreds of dollars for print (SST print costs $343 in Canada and $413 in other countries), plus waiting two or even six weeks for an issue, and it’s not hard to see why international uptake rates for digital are high. Business readers are happy, the publisher expands its qualified readership into new markets extremely cost–effectively, and advertisers get engaged, qualified professionals that they wouldn’t otherwise reach.

With paid-circulation, weekly-frequency title Oil & Gas Journal, PennWell viewed digital as a means both to grow international circulation and better serve existing subscribers. Those subscribers travel much of the time, often to remote locations (some work on offshore oil drilling installations).

Today, nearly 80% of OGJ's approximately 108,000 paid subscribers are international, about 87,000 are digital, and nearly 40,000 of the digital are international. Print subscribers pay $89 per year in the U.S., $94 in Canada, and $139 in other countries, but all digital subscribers pay just $59. (Few, if any, publications are actually charging international digital subscribers more than domestic digital subscribers, though that doesn't mean some haven't tried.)

A Round-Up of Take-Aways

Obviously, assessing the overall financial viability of a digital edition that would in some or large part be contingent on paid or controlled international circulation requires researching the format’s desirability among both advertisers and potential non-U.S. subscribers.

Another reason to test before leaping: In some developing countries, broadband access is either largely inaccessible or very expensive to access.

Other key advice from publishing executives with experience in international digital circ:

• Make it easy for existing print/potential digital subscribers to understand and sample the format. The reality is, many people overseas—and domestically—still have no idea what a digital edition is.
  
  IEEE Spectrum, the membership publication of the worldwide Institute of Electrical and Electronics Engineers, promoted its digital edition for six months by emailing its membership links to digital samples (essentially, forced free trials) and the opt-in form before launching digital this year. This helped the title generate total conversions of about 12%, or about 42,000 digital out of about 350,000 total circulation—of which 18,600 are international.
  
  Jim Vick, staff director of IEEE Media and publisher of the IEEE Spectrum Group, reports that those 42,000 subs represent manufacturing/distribution savings of $350,000 to $400,000. And with further efforts, he expects to increase the pick-up rate. (In surveys, between 25% and 30% of members indicated that they would be interested in receiving the digital edition.)



• By and large, digital needs to be promoted digitally. In part because of digital editions' unfamiliarity factor and in part because digitally–oriented readers are simply more responsive to digital promotions than traditional ones, most publishers rely heavily on email promotions for both international and domestic.
  
  They also include prominent digital-edition benefits copy and easy access to a sample (and qualification or paid sub form) on their Web sites.
  
  In addition to or instead of renting lists, many cull email addresses from site, enewsletter and trade show registrations.
  
  Others, however, rely more heavily on list trades or partnerships. NASA Tech Briefs's Pramberger says that most purchased international email lists haven't proved cost–effective for his publication, whereas pursuing relationships with international organizations and companies (including advertisers) serving his market has been very successful.
  
  "These email names are of higher quality and respond better because there is an existing relationship there," Pramberger says. "Some organizations will send out emails from their regional offices on our behalf, which also helps from a perception and response standpoint."
  
  Most publications also include the digital option in wraps and other traditional renewal and new-subscriber sources. Further, telemarketing can sometimes be cost–effective even for international digital. For example, Pramberger reports that telemarketing to Canada has worked for NTB.
  
  In all, by using partnerships and other inexpensive circ builders, NTB increased its international digital circulation from about 1,000 to 8,000 (and overall digital from about 34,000 to 51,000) between December '05 and December '07. Moreover, Pramberger believes there's significant potential for more growth, particularly on the international front.

Two strategies that work equally well for paid international and domestic circulation/revenue building:

• Sweetening the offer with site access and other value-added, particularly for paid titles. Questex Media, which has digital editions for about a dozen of its 23 brands, not only charges less for a digital (versus print) edition of a paid title such as Official Board Markets, but stresses the advantage of portable access to search and archives. "If you're using the magazine for research, digital is great," notes Heidi Spangler, Questex's director of circulation and audience development.
  
  Next year, IEEE Spectrum—which also has some nonmember circulation, particularly outside the U.S.—plans to further grow digital circulation and revenue by adding a new offer. For an additional fee of $9.95, a member or subscriber receiving print will also receive the digital edition and access to the magazines' full archives.
  
  Similarly, digital subscribers to controlled Chemical Engineering, which has substantial foreign circulation, get free access only to the current issue, and must pay $59.97 to access the archives, according to John Rockwell, VP, marketing and emedia for Access Intelligence’s Chemical Business Media Group.



• Giving readers multiple points of digital entry. Paid-circ Chemical Week, also part of the Access Intelligence chemical group, offers its digital edition worldwide for $149.97 (versus $642 for international print). Alternately, it offers full access to its Web site content for the same price.
  
  Whichever way new readers/users come in, they get the other benefit as part of the deal (meaning digital edition subscribers get online access, and vice-versa), Rockwell reports.

Of course, with these types of models, it's particularly key to ensure that each of a magazine's channels (print/digital version/Web site) offers some unreplicated content or other benefits, so that each offers its own value proposition.