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Back in July I wrote about the planned re-branding of The Economist. It was a risky move because The Economist is a magazine with a sterling reputation and an affluent readership. Two months on, the full strategy behind the re-branding has appeared online.
First a bit of context: According to the publication's own research, the average yearly income for its readers is $175,000 and the average net household worth is just shy of $1.7m. In 2008, revenue increased 17% to $510m and worldwide circulation grew 6.4% to 1,390,780.
With that in mind, The Economist embarked on a massive re-branding campaign. Their goal? Get more readers. That's great, and what magazine doesn't want more readers?
The problem is these new readers are unlikely to be in the $175,000 per annum income bracket. This in turn drives down the high ad premiums that The Economist undoubtedly demands.
That made the post by leading UK banding agency Abbott Mead Vickers BBDO and The Economist at CampaignLive.co.uk all the more interesting. In the paper, as they call it, the facts and motivations of the re-branding are laid bare.
It's long, so I'll go through the highlights.
We asked ourselves some fundamental questions about the strengths of our product and our strategy up until that point. A new pattern started to emerge when we began questioning all the counter-intuitive pillars of our previous strategy: "Why do we only target readers with more than £38,000 of annual income?", "Why do we cap student subscriptions?" "Why do we describe our readers with subscription-only data?"
Here they've stumbled upon what made The Economist the brand that it is. It's admittedly high-brow, occasionally obtuse and somewhat expensive to buy at news agents. After a while, people began to know what they were getting when they picked up the magazine. That turned into a big problem.
We discovered that non-readers approached The Economist with considerable scepticism, not only with regards to the content, but also about what kind of readership club they were joining. At best, they saw it as an authoritative academic, but more often, as a smug banker in a pinstriped suit.
Some disclosure is needed here: I'm an Economist reader. I was once a subscriber. But the yearly subscription cost became more than I could afford. But I still buy the magazine at news agents. I like The Economist because they're often right. And even when they're not, their position is well-reasoned. They've got a voice and a brand that none other has.
To be cliched about it, they're in a league of their own. This makes AMV BBDO's job harder because their niche is self-created. And now The Economist wants to target a niche that they've got little experience with.
There was a "Generation Why" out there - a young, curious, engaged crowd, eager to understand the world better. The Economist offered intelligent, independent and global coverage. If we put the two together, it could give us the circulation boost we needed.
The Economist and AMV BBDO insist they've found this previously undiscovered well of readers and revenue. Judging from the research they did, very thorough and definitely worth reading, I'm willing to wait and see before dismissing it out of hand.
What I'm curious about is what happens if the numbers aren't quite what The Economist had hoped for. Ad premiums will likely dip because of the new 'mass outreach' Economist, but it's hard to say how much.
Will The Economist do what The New York Times did with TimesSelect when the going gets tough? If this doesn't pan out, The Economist could recoil and re-assert itself within its previous brand, assuming it's still an option.
This could work out exceptionally well for The Economist. They seem to be capable of things that other magazines are not, especially in a recession.