Reference no: EM131459372

Question: "One thing we do differently here than people do in most businesses is we don't budget, we forecast," claims Bryan Welch, publisher and editorial director of Ogden Publications. Ogden Publications is a small publishing house based in Tulsa, Oklahoma. They publish
13 magazines, including Mother Earth News, Natural Home, and Utne Reader. A few years ago, these titles and others from their catalog were only available in specialty bookstores, often those with a more eco-conscious clientele. The green movement has done wonders for Ogden in the past few years. Now, many of their titles are sold at the local Barnes & Noble bookstore or at hardware stores. "I will tell you, without a shadow of a doubt, that the five-year forecast is accurate six months out. Beyond that, it is wildly inaccurate," says Welch. So why bother? "The reason you do it is because it is a strategic tool. It makes everyone think about ‘what will we need to do to be successful in five years?' " Welch is a big proponent of being open and flexible enough to make what he calls "wise course corrections." He always reminds his staff that just because they assigned money to a project doesn't mean they have to do the project. "Because the world is changing so rapidly, we need to be able to not make an investment we planned nine months ago," says Welch, so they can "make an investment we never thought of nine months ago."

"We work together with advertising sales and editorial," explains Cherilyn Olmsted, circulation and marketing director at Ogden Publications. One of their most valuable tools is an online survey system called Survey Monkey that collects and stores all the data from the many online surveys they present to their readers. "We like to try to find out various things from an editorial perspective and an advertising sales perspective that will help improve the content we are providing to our readers and to make sure we are reaching the audience that our advertisers would like to reach." Much of the information is what one might expect-demographics, age, income, and psychographic information. Of course, without a good magazine, there are no readers to count, so they also perform surveys asking for more subjective feedback on covers, style, and content. This information is reported back to the editorial staff of each magazine. Olmsted and her team use information from past sales and the reception from various new marketing projects to forecast future sales, both at the subscription and newsstand level and with advertisers. Like most, if not all, magazines, revenue is almost exclusively from ad sales, so they have to continually track reader and advertiser responses in everything they do.

While surveys have been invaluable to Ogden's marketing research, one of the best and most valuable tools has been the Web companions to their magazines. This passive form of marketing research asks nothing of the reader except that he or she visits the site. Every visit, mouse click, advertising link, and download is tracked. With a few simple clicks, Olmsted can even see how many minutes a user spent on each page. With a traditional magazine, they would have to wait six months or more to get all the sales returns and reader and advertiser feedback and to compile new subscription rates. Now, with the companion sites, they can instantly see if they need to include more political articles or home improvement projects, or recipes or technical articles about geothermal heating systems. They can make adjustments to the next editions of the print and Web products. Ask anyone working in marketing today, and they will agree that a good portion of their lives is spent spotting trends. The editors and marketers at Ogden are no exception. Welch cautions, however, that "a lot of trends are short-lived and have no real impact in the economy." His skepticism extends to a particularly hot trend in the magazine industry today: the digital magazine. "There hasn't been good evidence, in spite of the fact that it is a cool idea, that a lot of people will pay for it." But, Welch adds, "if someone suddenly came up with a formula that allowed us to make money doing it, it would only take us a couple of months to gear up and do it."

1. Now that so many companies have Web companions and/or e-commerce components to their business, do you think more traditional methods such as telephone surveys, focus groups, response cards, and analyzing sales data will become obsolete? Why or why not?

2. What are some of the limitations to forecasting at Ogden Publications?