In its report on fiscal year and fourth quarter 2008 losses earlier this week, Meredith Corp. outlined a strategy that executives hope will offset decreasing advertising revenue and higher production costs facing the publishing industry by controlling costs, maximizing market share and establishing new revenue streams.
To control costs, Meredith has reorganized some staff this year and is also heavily managing its newsstand activity, particularly with special interest and newsstand-only titles.
“We’ve pulled back where we think we need to pull back,” said Art Slusark, VP of corporate communications at Meredith. “We’ve analyzed how many magazines sell and where they sell, and we’re reducing the draw where appropriate. The goal is to reduce the number of magazines that are thrown out.”
In an effort to make the most of its market share in publishing and broadcasting, Meredith is developing special sales incentives and new marketing programs. One goal is to generate 10,000 sales calls over the next few months. The company is offering special incentives to its sales agents in an effort to reach that number.
“The Gamma Factor study [on female consumers] is the centerpiece of our marketing program because it’s important to research and give opportunities to engage in dialogs with key clients to show them that if you want to reach American women, you can’t do any better than Meredith,” Slusark added. “It will help us get around the bunker mentality that a lot of people are taking right now. We have also done some restructuring of the sales leadership both inside particular magazines and to strengthen Meredith 360, which sells across multiple platforms.”
The company is also pursuing new revenue streams through acquisitions — it purchased marketing companies Big Communications and Directive this year — and extensive brand licensing. Meredith’s Better Homes and Gardens has licensing deals with Wal-Mart and Realogy. The company is also seeking expansion online with launches of new tools and platforms like the Parents.com portal.
Meredith’s publishing arm reported total revenue of $1.3 billion for the fiscal year, which was comparable with last year’s revenues. Fourth quarter revenue, however, plunged to $306 million from $345 million, largely due to weakness in key advertising categories like food, pharmaceutical and home. Ad pages for these categories fell by 20% in Q4.
However, Meredith reported an overall 15% gain in food ad pages for the year and increased net advertising revenue per page this year. Total audience for Meredith magazines increased 4% this year.
Meredith Corp.’s total revenue for Q4 was down to $385 million from $428 million in the fourth quarter of 2007 — the company attributed this fall to lower advertising demand, a soft retail marketplace and higher input costs. Full-year results were slightly better — $1.59 billion for 2008 vs. $1.62 billion in 2007 — thanks to a strong performance in the first half of this fiscal year.