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What do you do when you're the publisher of a luxury home magazine and the real estate market collapses?
If you're Tony Spano, the Naples publisher of Home & Design magazine, you put your salesman hat on and don't give up. It's a good thing too, because the real estate market is recovering strongly.
But now, Spano has a new publishing venture that could turn out to be a bigger source of revenues than Home & Design magazine, the premier glossy magazine that focuses on luxury homes in Naples.
Spano's new effort is Your Home Publishing, a company that produces custom magazines for Realtors with compelling content tailored for regional tastes. One big advantage: Realtors can sell their own ads to help defray the cost of the publication and mailing.
So far, 92 Realtors in Florida have signed up for Your Home, spending about $2 per magazine and mailing some 100,000 copies to homeowners in desirable communities. If Spano can boost circulation five- or tenfold, he says he'll be able to attract national advertisers.
“It's the nicest I've seen,” says Tiffany McQuaid with McQuaid & Co. in Naples, who says she's been seeking a custom magazine to mail to prospects for years. “I go to the National Association of Realtors conventions every year, and I've searched every year I go. It's very hard to find something as nice as what Tony puts out.”
Now, Spano is targeting the gold mine of real estate agents: California. “One-sixth of all Realtors are in California,” says Spano, himself a California native.
Custom Marketing
Spano, 61, thought of the idea of selling custom magazines to Realtors after hearing a speaker talk about reusing content at a publishers' conference in 2011. Home & Design magazine has been publishing for more than a decade. “I've got 10 years of editorial in the can,” Spano thought.
After doing some research and checking with printers, Spano realized he could publish a 32-page magazine and sell it to Realtors with their own covers for $2 a copy. Two printers in Jacksonville print the issue; one specializes in small print runs and prints the covers while another prints the inside pages that are the same for everyone.
Even during the downturn, Realtors continued to use direct mail as a way to brand themselves, spending as much as 30% of their marketing budgets on this method even during the downturn. Spano says the magazine is a way for Realtors to differentiate themselves from their competitors, and he grants them exclusive territories.
Realtors agree to a one-year contract for the magazine's six issues a year, with a minimum of 500 copies for each issue. Then, they can sell their own ads on the inside covers. Spano recommends they charge $125 to $250 an ad. “We do the billing and production work,” says Spano. He also manages the mailing lists, ensuring Realtors reach the communities they target.
“When Tony approached we thought it was extremely expensive,” says Connie Lummis with Royal Shell Real Estate in Bonita Springs.
But Lummis says it was easy to persuade business owners with whom she does business to buy ads, in part because she mails out 3,000 to the upscale Bonita Bay community. Participating advertisers include jewelers, insurance companies and interior designers. “We covered a great deal of our cost,” she says.
Not every real estate agent sells ads. “I use my piece to promote my properties,” says McQuaid. “I just don't want to be attached or associated with anyone in particular.”
Holly Pascarella, a Realtor agent with Keller Williams Luxury Homes International in Lakewood Ranch, says a window-blind company recently approached her about buying an ad in her magazine, which she mails to nearly 4,000 residents in that community. The company owner wanted to advertise on the back cover of her magazine, but she turned him down. “That's where I put my listings,” she says. “It's a listing tool and a marketing tool. It sets you up to be the expert of the area.”
Spano acknowledges that margins in the custom-publishing business are thin because of the accounting, production, mailing lists and postage. What's more, he couldn't reuse old editorial material and now spends about $2,500 per issue for regionally focused content by freelance writers. “This is a fashion business, and you have to stay on top of the trends,” Spano says. Articles range from kitchen remodeling to furniture selection and color schemes.
The key to success, Spano says, is to boost circulation to the point where national advertisers will want to buy space. As part of the contract with Realtors, he's reserved 25% of the space in the magazines for such advertisers. He hasn't sold any ads yet because circulation now runs at 100,000, but he's aiming for the 500,000 to 1 million that would make his publication attractive to home-related advertisers such as appliance manufacturers. “At the end of the day, it's about the circulation base,” he says.
To build circulation, Spano plans to expand to other areas of the country, such as California, where Realtors are numerous. He'll be traveling there to exhibit at Realtor trade shows later this year. By next year, circulation could grow to 300,000, Spano says.
The return of Home & Design
During the boom, ad sales for seven issues of Home & Design were bringing in $1.8 million a year. “I was ready to introduce the eighth issue,” Spano says.
But the market began to sour in 2007 and ad sales collapsed in 2008, forcing Spano to lay off 13 people and shrink the publication to one issue per year. “When it was at its bottom, it was just me,” he says. “I sold all the ads myself.”
Now, the economic recovery has rejuvenated Spano's Home & Design magazine. He's recently added a second issue that's nearly 300 pages after the first one sold out. A full-page ad costs $3,500 and a two-page spread costs $5,900.
Spano also plans to revive the magazine's annual home show, which in 2005 shut down Gulf Shore Boulevard in Naples because so many people showed up to visit with more than 100 exhibitors. “It was an event that got our brand out there,” Spano says.
But Spano says he learned from the downturn that the Home & Design magazine could be just as profitable with fewer staff and fewer issues. “In the good old days it was easier to get revenues than focus on lean operations,” he says. “We're going to outsource a lot more, part of this is because of this health care stuff,” Spano says.
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