The growing importance of gathering consumer data is clear to magazine publishers and they consider this a strategic focus. But merely gathering data is not enough; the key to successful monetisation is to connect and understand it.
Consumer magazines in the Netherlands are suffering from the same affliction as those in most developed markets: consumers are increasingly turning to devices like smartphones and tablets for media and entertainment content, but this doesn’t necessarily translate into digital revenues for consumer magazine publishers.
The digital consumer is accustomed to accessing content for free, so they often cannot be persuaded to pay for magazine content on digital devices even if they would have purchased it in print. As a result, digital growth is too weak to compensate publishers for print declines. Indeed, digital circulation revenues will stand at just €33m in 2021, up from €15m in 2016. This is tiny when compared to the €55m decline in print consumer magazine circulation revenue in the same period.
Falling print revenues will cause total consumer magazine revenues in the Netherlands to dip by a CAGR of -3.3% over the next five years. Publishers will see growth in digital advertising, but this will not make up for losses in print. They desperately need to diversify to grow.
In a market facing steady decline, publishers need to interact with consumers using channels like social media apps, messaging apps and video platforms to become cross-platform brands. With these new forms of interaction come new ways of monetising publishers’ content. Publishers can create these new content forms by entering into partnership with other parties. Sanoma, for example, has partnered with GroupM to share data on browsing and subscribers. This allows Sanoma to respond to the rising demand for consumer data from marketeers, while GroupM can use the data to utilise client advertising budgets as efficiently as possible.
Placing the brand at the centre requires a sharp focus on brand identity, a trend that began some time ago. To enhance the strength of its brand, WPG’s Happinez runs an annual event featuring fashion, workshops and shopping. Vogue has also brought its Fashion’s Night Out and Online Shopping Nights to the Netherlands, both revenue-generating events. However, the focus on brand identity is also proving difficult for publishers. July 2017 saw the announcement that G+J Media is for sale; it's parent company, Gruner + Jahr, is looking to focus more on digital opportunities.
|Consumer magazines publishing market (€ millions)|
|Netherlands||Historical data||Forecast data||CAGR %|
Source: PwC, Ovum. Note: Because we rounded off amounts and percentages throughout this Outlook, tables may not sum to 100%.
There is still a large base of publishers – among them New Skool Media and Bindinc (publisher of TV programme guides) – that are trying to build on their current market share. Their aim is to monetise as much of the market as possible in the coming years by selling physical magazines. The publishers of TV programme guides have experienced a sharp decline (8% decline year-on-year), but they can still rely on their strong customer base.
Many consumer magazines are exploring options to grow revenue and readership, primarily by building a strong cross-media presence around strong magazine brands.
We believe a strong multiplatform strategy will not be possible for all magazine titles. Publishers will have to find ways to maximise value continuously, through enriched data capabilities and a constant focus on cost efficiency in their core processes.
The growing importance of gathering consumer data is clear to many publishers and they consider this a strategic focus. The key is not only to gather data but also to connect and understand all the data collected via the different systems and databases. Sanoma sets a good example; it has acquired two cashback marketing companies, Scoupy and Kortingisleuk.nl, and used this deal to strengthen its marketing offerings to advertisers. This is one good way for publishers to distinguish themselves.
© 2015 - 2018 PwC. PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.