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Exploring a successful magazine web site

Hanna-Kaisa Ellonen and Olli Kuivalainen
Department of Business Administration, School of Business, Lappeenranta University of Technology, Lappeenranta, Finland
Abstract
Purpose The aim of this paper is to provide a multifaceted exploration of the motives and success factors of a magazine web site. Design/methodology/approach The paper presents an explorative single case study of a Finnish magazine web site. The analysis is based on triangulated data (semi-structured interviews, observation, statistics, and documents provided by the magazine publisher). Findings The case illustrates that a magazine web site supports all the three functions (editorial, circulation, and advertising) that are vital to a magazines success. Moreover, virtual community activities seem to have enhanced customer loyalty and added a more lifelike dimension to the magazine concept. Practical implications Media managers should look at internet presence from a more multifaceted perspective rather than merely focus on the revenue streams. Operating online services should be valued and exploited alongside the development of the print product. Originality/value The value of this research lies in the notion that the web site may complement rather than replace the print magazine. Keywords Internet, Worldwide web, Magazines, Online operations, Communities Paper type Case study

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Introduction In our view, discussion on internet usage has emphasized business models (see e.g. Timmers, 1998; Afuah and Tucci, 2003; Lumpkin and Dess, 2004) at the expense of a broader understanding of its benefits. This is especially true in the media sector where both business models (e.g. Gallaugher et al., 2001; Vasisht and Gutierrez, 2004; Stahl et al., 2004; Fetcherin and Knolmayer, 2004) and the internets impact on the traditional print media products circulation, i.e. the so called cannibalization question (e.g. Kaiser, 2003, 2005; Kaiser and Kongsted, 2005; Simon, 2005) have dominated researchers agendas. While some researchers have also suggested other motives for internet presence, such as promoting other titles from the same publishing house (Kaiser, 2003), offering readers content extensions (Barsh et al., 2001) and supporting the brand (e.g. Galbi, 2001), they have done so without empirical evidence. In our view, a holistic view that encompasses also the indirect advantages of the internet presence in media sector is still lacking. Magazine publishers, however, are confident that the internet will meet multiple objectives. According to a recent study focusing on 71 magazine publishers, the top five objectives for magazine web sites in 2005 were: (1) to expand the readership beyond the print audience by creating an online audience; (2) to attract new readers of the print products; (3) to create revenue streams and profits in the long term;
Management Research News Vol. 31 No. 5, 2008 pp. 386-398 # Emerald Group Publishing Limited 0140-9174 DOI 10.1108/01409170810865181

(4) to build a community around the magazine brand; and (5) to have the means of communicating with the target audience on a more frequent basis (FIPP, 2005).

While the first three objectives reflect the traditional measurable goals, the latter two clearly illustrate that magazine publishers also have a wider perspective towards their online presence. As noted above, magazine publishers are optimistic about the prospects of an online community around the magazine brand. Virtual communities and other interactive forums are, indeed, one of the special attributes of internet. Surprisingly, the use the forums has received very little research attention within the media context, the notable exceptions being Erickson (1997) and Johansson (2002). However, these studies take the perspective of a web designer or the organizing media company, respectively, rather than discuss the use of the forums from the magazine publishers point of view. Correspondingly, there is a need for further research in this domain and the aim of this paper is to provide an exploration of the motives and success factors for a magazine web site. The discussion is based on an explorative case study of a successful Finnish magazine web site. The case web site hosts a very active virtual community, which gives us an opportunity also to discuss the business-side of communal actions online. Research strategy and methodology We chose to conduct an exploratory case study in order to get a holistic understanding of the magazine web site development and motives. Yin (2003) has pointed out that the objective of a case study is to understand a phenomenon in its natural context. In line with this, Eriksson and Koistinen (2005) emphasize the importance of describing and understanding the context; this should make the case understandable and partly explains it. Dyer and Wilkins (1991) argue that good stories are the ultimate results of case studies: they can lead us to see new theoretical relationships and question old ones. According to the definitions given in the literature, our study could be described as an explorative (Yin, 2003) single-case study with some longitudinal (e.g. Jensen and Rogers, 2001) features. A case study is considered an ideal research strategy when the intention is to capture a holistic view by using multiple sources of data (Tellis, 1997). We collected our data by conducting semi-structured interviews with five current and former members of the magazines staff: the marketing director, the editor-in chief in 2004, the editor-inchief in 1998, the chief editor of the web sites, and the planning manager for advertising sales. The interview themes covered the main development phases of the focal web site from 1998 until the situation in 2004, the goals of the web site at the time of the data gathering and the relationship between the web site and the print magazine. Three of the interviews were conducted face-to-face and tape-recorded with the interviewees permission. They were then transcribed for analysis. Two of them were conducted via email. The interview transcripts were analyzed by Atlas/Ti program. In addition, we have closely observed the development of the magazine web site with professional interest since 1998; the first author worked in the same publishing house until 2001 and has followed the development of the web site with research interests since. The magazine staff also provided us statistical data on web-visitor development, documents regarding their strategic planning and customer feedback. We also used newspaper articles covering the case web site and circulation statistics provided by the Finnish Audit Bureau of Circulations as a source material for the study. In order to increase the validity of our study, both authors contributed to the key findings individually. The findings were double-checked and eventually agreed upon

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jointly. Two interviewees were also asked to give feedback about the draft of the manuscript and the findings; thus it was possible for them to build on the findings and validate them. Case description The online services of our case magazine, a baby and pregnancy magazine we call BAP, consists of a web site updated by the magazine personnel and a set of over 40 discussion forums for mothers-to-be and mothers of young children. The BAP is the rated as the number two magazine in its field in Finland, but clearly a market leader in terms of its online services. The magazine has a circulation of around 35,000. However, in October 2004, there were 145,000 unique visitors per month and the average visitor spent more than 17 min at the site. It is estimated that there are approximately 18,000 messages posted each day, more than 6.5 million messages posted annually. The message strings are often long and there are hardly any openings that are left unanswered. There are several reasons for choosing this BAP as a research object. It was one of the first magazines with web sites in Finland, and so it is well-established and mature. It also hosts one of the most active online communities in this country. Also the culture of BAP web site makes it interesting: although the topics cover some of the happiest and most emotional phases of womens lives, the conversation is not limited to baby talk, nor is it always happy in tone. In the following, the development of the BAP online services will be explored. We start by describing the evolution of the site popularity in terms of the number of visitors and then contrast it with the actions of the magazine publisher. The development of the BAP online services In terms of use and adoption, Finland as a country has been at the forefront since the inception of the internet (e.g. Nurmela et al., 2000). The massive expansion in access has enlarged the number of potential users of the BAP online services. The BAP web site was launched in 1998. The so-called first innovators (cf. Rogers, 1962) adopted the service quickly and the site gradually increased in popularity. However, it was not until 2001 that the number of visitors truly started climbing. Since then the site traffic has been increasing constantly, with the exception of a short period in 2003 (marked as crisis with registration in Figure 1). This was when the web site introduced a new layout and obligatory registration for all discussion forums: the customers protested by exiting en masse and founding a shadow site themselves. However, this was only a temporary uprising, and the BAP pages soon won back their former visitors. Currently, it seems that the growth has slowed down; one potential reason for this could be that the site is reaching its natural potential in its current format as the potential among the primary customer group, parents of young children, is limited in Finland. We now describe the development of the BAP web site in contrast to the internal organization structure of a magazine publisher. According to Daly et al. (1997), the commercial success of a magazine rests on the three-legged stool of editorial, advertising and circulation: the shortcomings of any leg affect the others and the stability of the entire venture. The three functions are intimately entwined: editorial decisions affect how many copies are sold, which in turn affects how many new subscribers the magazine can expect. Advertisers base their decisions on how many people buy the magazine (Daly et al., 1997).

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Figure 1.
The development of the BAP web services usage and magazine circulation

Figure 2 illustrates the evolution of the role of the BAP web sites from the perspectives of these three functions. The web site was launched on the editorial departments initiative. They sensed a boom and wanted the BAP to be the first on the market. There was no editorial content online at first, and instead the magazine founded discussion forums they thought would be attractive to their target segment. It turned out that the discussion forums were a hit. During the period of early development the web site reached critical mass through word of mouth, although no journalistic content was provided online. The visitors in essence created the site. When the web site traffic really started increasing, the web site also increased in value independently of the magazine it was seen as supporting the magazine brand. An editorial webmaster was therefore recruited and the development of the site was no longer outsourced. The Webmaster started using customer feedback as a basis for improving the site. The customers were happy, but the publisher still saw the Internet as a less respected medium. The advertising and circulation functions also started to realize the potential of the web site during this period. The circulation department started distributing the URL in its marketing material, and although the revenue at that time was minimal, they also introduced the online-subscription option. The advertising function, on the other hand, noticed the volume and segmented audience. The first web advertisements were

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Figure 2. Evolution of the BAP web site

buttons and banners that were troublesome to master with the inflexible systems of that period. Sales were scattered in-house and among outside sales organizations. After the short crisis period mentioned earlier, the web site continued growing. This was when the magazine recognized the fact that vivid discussion forums were a channel for market research. The site was continuously updated and improved: samples of editorial content were given, the web content was provided in the magazine, and the web sites were finally allocated dedicated resources. Their popularity brought positive publicity to the magazine and the discussion forums were featured in newspapers as a phenomenon in themselves. Money was not the only motivation for the web staff they saw the web site as an educational opportunity to teach both the customers and the internal organization of the publisher. As far as the circulation function was concerned, the obligatory registration provided a basis for compiling a customer database: it included the necessary data to contact potential subscribers and gave the possibility to lengthen the subscription period. More active marketing efforts were made both online and offline. The web site was seen as propping up the circulation and promoting reader commitment. The advertising department took the web sales back, and the new systems allowed for the more versatile selection of online advertising forms. Advertisers were attracted to the strong image of the web sites, which were propping up the advertising sales of the whole magazine. However, despite this positive development, the magazine staff still seemed confused about the future direction of the web site. On the one hand, they were aware that the web sites might be strong enough to form an independent medium that would give the personnel freer hands with the development. On the other hand, they

expressed a need for a stronger concept that the magazine and the web site would form together, which would require closer cooperation between the three magazine functions. Motives for the case web site Despite the confusion regarding the future of the BAP online services, we find the BAP web site is a success story in many ways. For instance, it reaches an online audience four times the size of the magazines circulation while still maintaining the circulation development relatively stable (see Figure 1). From the BAP case, it is evident that the web site supports the magazine and its staff in a number of ways. Table I summarizes the motives for BAP web site according the three functions. The editorial objectives focus on market-research opportunities. The web site could be used as an idea pool to give some idea of the readership. It provides some connection between the magazine and real life, and in terms of communicating with the target audience on a daily basis, it complements and enriches the magazine. At best, it communicates the magazines values. Achievement of these objectives requires constant updating and improvement. From the circulation perspective, the web site objectives concern defending the market position, expanding the subscription length, enhancing customer loyalty and supporting the magazine brand. Its potential in terms of preventing its audience from escaping to competitors sites is also acknowledged. Other objectives include maximizing the publicity value, marketing the print magazine, and encouraging online subscriptions. Regarding the online subscriptions, the magazines policy is to charge a fairly high price so as not to annoy current subscribers with aggressive offerings on their web sites. In this case, the online subscriptions are valuable to the magazine in a number of
Editorial Grasp of the audience Circulation Defending the market position Extending the subscription length Enhancing the customer loyalty Supporting the brand Preventing the escape of the online audience to competitors sites Positive publicity Marketing of the print magazine Encouraging online subscriptions: golden customers Advertising Maintaining and increasing the volume of the site: another attractive forum beside the magazine Reaching a segmented audience Defending the market position in advertising sales Improving the versatility, not volume, of online advertising Increase of advertising sales Improvement of pricing knowledge of online advertising

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Idea pool Means for communicating with the target audience on a daily basis Complements and enriches the print magazine Communicates a modern image of the magazine Touch of real life Continuous improvement Communicates the magazines values

Table I.
BAB web site objectives

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ways. Firstly, the cost of unprompted online subscriptions is relatively low and these subscriptions are therefore more profitable, particularly in view of the higher price scale. The magazine has also noticed that online subscribers tend to stay longer as customers, thus the total subscription length is longer. The advertising objectives include maintaining and increasing the volume of site traffic, and thus providing another attractive forum to complement the magazine, reaching a segmented audience and defending the market position in advertising sales by improving the online service and developing the pricing policy. Enhanced versatility was also mentioned. As this brief summary illustrates, a magazine web site has far more to offer than direct online revenue streams. The web site supports all the three functions that are vital to a magazines success. We will now discuss the factors we propose are behind the positive development of the BAP web site. Discussion: what are the reasons for the success story? We believe that an important aspect of the BAP web site development is that since the early days, the centre of the web site has been the discussion forums. The magazine was the first in the market with such forums, and the site traffic grew mostly through word-of-mouth recommendation. We therefore, propose that the forums (one type of virtual community) benefited from the positive feedback that resulted in positive network effects (e.g. Johansson, 2002; Shapiro and Varian, 1999; Jones and Rafaeli, 1999) and led to the adoption of the service. The magazine has benefited from the virtual community in a number of ways. Online community activities have been identified to impact customer loyalty and wordof-mouth promotion of the product/service (c.f. Srinivasavan et al., 2002; Wang et al., 2006) and even the perceived value of the firms offerings (Gruen et al., 2006). In our view, the enhanced customer loyalty is evident in our case. Porter (2001) argued that the internet would make price competition more transparent and that prices online would thus decline. Given the results of our case study, we argue that the opposite is the case: as its web sites attract potential subscribers, online subscriptions provide a financially attractive opportunity for a magazine to serve its loyal customers. The key word here is, we believe, online customer loyalty built by the community activities. One special feature of the web site has to do with the target group of the magazine. It is important for a baby and pregnancy magazine to get in contact with women as soon as they become pregnant, as the subscription period is typically short. However, no customer database has this information until the baby is born. A virtual community with registration offers the possibility to identify potential new readers to be contacted. Another perspective to the virtual community is to look at it as a market research channel (e.g. Catteral and Maclaran, 2002; Pitta and Fowler, 2005). On the grounds of the expressed web site objectives, BAP clearly has adopted this perspective: to get a grasp of the audience, idea pool, to get a touch of real life. We claim that BAP has successfully utilized the discussion forums as the neural systems of the brand (cf. McWilliam, 2000) and thus been able to perceive weak signals from the audience and fulfill the needs of their customers when improving the service. Moreover, we find that the genuine and conflicting discussion forums add a more lifelike dimension and credibility to the magazine concept and thereby rather complement the print magazine than supplement it. While the network effects and e-word-of-mouth partially explain the consumer adoption of the BAP web site, we believe that even more crucial to the success was the

internal adoption of the web site as a part of the magazine concept. Little respect for digital innovations and fear of new technologies are common attributes in media companies and typically hinder the development of digital products in media companies (c.f. Ellonen and Karhu, 2006). In our case, BAP managed to get pass the reluctance to change within the organization. We propose that it was partly due to the enthusiastic individuals who took responsibility for the web site beyond their organizational roles. For instance, the chief online editor was actively part in the online advertising sales educating the sales people and customers, as well. In general, innovations are seen to begin with an individual (Tang, 1998) and only succeed if the innovation-to-organization problems are solved (Dougherty and Hardy, 1996). This type of intrapreneurship (e.g. Drejer et al., 2004) or championing behaviour (c.f. Day, 1994; Markham and Griffin, 1998) is often seen fundamental in new product development. We also propose that creativity and organizational learning explain the positive development of BAP online services. According to Kazanjian et al. (2000) creativity and learning typically occur when crises arise in the organization. This is in line with Greiners (1998) model of organizational growth. Learning new technologies is a dynamic process that is characterized by narrow windows of opportunity (Robey et al., 2000). Robey et al. state that typically in-house knowledge capabilities evolve as a result of using intermediaries earlier in the firms history. It has also been suggested that technological adaptations are most likely to occur at two points: by the time of the introduction and later in response to disruptive events (Tyre and Orlikowski, 1994). In our case, there are two phases when the web site traffic has increased more rapidly, in 2001 and in 2003. During these times, important incidents occurred: In 2001, the magazine stopped using intermediaries for their web site and took responsibility in-house. In 2003, the site faced a crisis when the customers protested against the new registration system with a mass escape. Based on the web site traffic development, we propose that BAP staff managed to leverage and learn from these incidents. They were able to use intermediaries (for web site development and online advertising sales) when developing their own capabilities and to overcome significant knowledge barriers (Robey et al., 2000). Other explanations for the positive development may be that that development was largely based on customer feedback and special web features, rather than mimicking the print version of the magazine (c.f. FIPP, 2003; FIPP, 2005 for lessons from the industry). The online offerings of BAP were from the start developed by the rules of the new media instead of bludgeoning the content of the print version online. This also led to a situation where the web site was not cannibalizing the print circulation, and gradually the site was also accepted by the all members of the magazine staff as an important complementary asset and not a competitor for the print magazine. Conclusions The objective of this case study was to provide a multifaceted exploration of the motives and success factors for a magazine web site. In our view, a successful web site may well complement rather than substitute the print magazine, and add a more lifelike dimension to the magazine concept. This study also illustrates some differences between magazine and newspaper web sites. Prior research has suggested that in the newspaper publishing, the immediacy of the web affords the provision of news in a continuous pattern around the clock. However, this scheme of news publishing is somewhat similar to live reporting

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m, 2000) as it is the professional journalists who update the web (Eriksen and Ihlstro sites and readers are less involved. In the case of the magazines, we suggest that readers are more empowered to participate on the web sites and, thus, as our case illustrates, in the product development of the whole magazine concepts. Our findings are, in fact, very consistent with the FIPP (2005) study. As noted in the introduction of this paper, magazine publishers have multiple objects for their web sites. The case magazine web site seems to meet all the top five objectives of the FIPP study, namely create an online audience, attract new readers to the print product, create revenue streams in the long run, build a community around the magazine brand and have a means of communicating with the target audience on a daily basis. Naturally, the main limitation of our study is that it was based on a single case. The chosen case (BAP online services) may not be a typical example of magazine web services, but we believe that its specific attributes an online audience four times the circulation of the magazine, extremely active online discussions, and a history of eight years enable lessons to be drawn that are useful to researchers and practitioners in the magazine publishing industry. Another limitation in our study was that the analysis of the early-development phases of the life cycle was studied and described in retrospect. Nonetheless, we believe that our analysis and subsequent discussion allow us to recommend some interesting implications. From the researchers perspective, the notion of network effects and virtual or online communities is of importance. Even though Porter (2001) was rather critical of the network effects of the internet, this study indicates that a web site with an active virtual community may well witness positive-feedback economics and higher switching costs: advantages may accumulate to the first movers (e.g. Shapiro and Varian, 1999; Jones and Rafaeli, 1999), resulting in a loyal online-customer base, for example. Our case also illustrates that online community activities support market research, and thus, the development of the print magazine, as well. We also believe that our case study provides new insights for future investigations in the magazine publishing industry. In contrast with the previous research emphasizing business models (e.g. Gallaugher et al., 2001; Vasisht and Gutierrez, 2004; Stahl et al., 2004; Fetcherin and Knolmayer, 2004) and the internets impact on the traditional print media products circulation, i.e. the so-called cannibalization question (e.g. Kaiser, 2003, 2005; Kaiser and Kongsted, 2005; Simon, 2005), our study proposes a different perspective: although the web site does not itself generate profits and thus, fulfill the requirements of a successful business model independently (Magretta, 2002), we find that the web site now complements rather than replaces the print magazine. There are also further implications for practitioners. First, media managers and decision-makers should see internet presence from a more multifaceted perspective rather than merely focusing on the revenue streams. Our case study illustrates that a web site may support all the three main functions of a magazines organization suggested by Daly et al. (1997) Second, we suggest that operating online services should be valued and exploited alongside the development of the print product. In fact, Galbi (2001) suggests that the print media should seek to build brands that are based not on the content they provide, but on the actions their readers may take in the web site (e.g. the largest and most active discussion forums). The potential of online communities has been noticed within the magazine publishing industry (FIPP, 2005), yet academic research on this domain is still scarce. To us it seems that the online activities of the magazine publishers are of importance

and their role as a part of the whole magazine brand is growing. This provides interesting avenues for future research. Further longitudinal studies should be carried out to identify and evaluate the success factors of web sites and virtual communities. However, the existing special organizational structures within the magazine publishing industry should be taken into account in the planning of future studies in this field: only by taking account of the views of all the three main functions of a magazine publisher can full understanding of the phenomenon be achieved. In addition, in this type of research endeavours it would be helpful to study the development of an organization through critical incidents or crises (cf. Greiner, 1998; Kazanjian et al., 2000). The development of the new type of businesses is a cumbersome task and, for example, the chosen path or strategy may even be a decision of a single stubborn individualist. Moreover, we suggest that the potential of virtual communities is not limited to magazine publishing or media industry, but they could be leveraged (see Balasubramanian and Mahajan, 2001 for a detailed discussion on the subject) in a multifaceted manner when the target audience shares a special interest (cf. e.g. Blanchard and Horan, 1998; Hagel and Armstrong, 1999; Baker and Ward, 2002). Hopefully, our case study provides other researchers and practitioners an interesting example if their task is to study or develop new online success stories.
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About the authors Hanna-Kaisa Ellonen (Dr. Sc. Econ.) is Senior Lecturer in knowledge management at the Department of Business Administration, Lappeenranta University of Technology, Finland. Her research interests are in the areas of media management, internet and virtual communities. Her work has been published in the International Journal of Innovation and Technology Management, International Journal of Technology Marketing, and International Journal of Web-Based Communities, among others. Hanna-Kaisa Ellonen is the corresponding author and can be contacted at: hanna-kaisa.ellonen@lut.fi Olli Kuivalainen is Acting Professor in international marketing at the Department of Business Administration, Lappeenranta University of Technology, Finland. His research interests are in the areas of international entrepreneurship, and strategic management, marketing and internationalization of knowledge-intensive firms, the focus especially being in information and communication technologies. He has published articles in the Journal of World Business, the Canadian Journal of Administrative Sciences, International Journal of Production Economics and Journal of International Entrepreneurship, among others.

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