Limiting inventory: LBM grew digital ad sales by 8x

Out of 40 magazine-based media companies in Niche Publisher’s 2023/4 Revenue Snapshot Report, only one magazine publisher said that digital advertising accounts for more than 30% of total revenues.

That company, LBM Journal, the magazine of the lumber and construction supply magazine published by Rick Schumacher, grew its digital revenues by 36% from 4% to 36% since implementing a new strategy in 2017

Their experience demonstrates the value of a strategic approach and how other entrepreneurial publishers can; 

*Divide the entire only and email inventory into a limited number of blocks

*Deliver more value and raise the prices for more significant sales

•Go to market without cannibalizing print

A  print-centric company

LBM Magazine is still a predominantly print company with a free national circulation 40,000.

Schumacher founded the magazine when his employer, a similar magazine, closed in 2003. He recruited a small team of former employees with an unusual pitch: 

 “The new magazine will be run from home for now because there’s no money for office space, no investors, and no guarantee anyone will get paid. So who’s with me?” he asked. We had three people come with me, and two of them are still here today.” 

The focus remained on print. In fact, Baxter Research Center’s audit of audience recall for print ads was a major selling tool.

The team did sell digital banner ads here and there, but ‘There was no real strategy behind it,” Schumacher said, and digital ads remained a sporadic source of revenues. 

Schumacher recognized that while print was still strong with the audience, marketing directors increasingly asked for digital options. However, significant revenues did not seem to be available in that category.

In 2017, Schumacher revamped the website to increase traffic and improve ad placement after hiring consultant Eric Shanfelt of Nearview Media. 

The partnership model

Shanfelt recommended dividing all the inventory into a few blocks that provided exceptional value. Instead of selling a medium rectangle or leaderboards piecemeal, LBM would offer advertisers Premium Partnerships that divided all the inventory on the site and daily email, LBM Journal Daily, into ten blocks. 

For $5000 a month, each partner owned 1/10 of all the inventory on the site and newsletter, plus a logo that appears on most pages on the website for the month, Schumacher said. 

Each partner supplies different sizes of banner ads – medium rectangle, tower, and a leaderboard –  which the ad server automatically allocates evenly across the website positions. If there are fewer than ten advertisers, each receives more traffic,  but they are always guaranteed at least 170,000 views. 

“For a month, they own our digital space,” he said.

“It was a huge change but also quickly increased digital revenues.”  

Within two years, digital revenues more than doubled and continued to climb, from 10% to 29% and finally 36% in 2023. 

When ten partnerships sold out two years ago, LBM increased the number of partnerships to 12. 

“Our traffic had grown enough to justify we could still guarantee the same number of impressions and views.” 

 In January 2024, LBM launched a native app on Google, and Apple, which will be included it in the buy.

Print still leads 

Schumacher still uses audience research from Baxter Research Center, a company that audits ad recall, which he acquired during the pandemic. Its reports show a shift in reader recall. Initially, 90% of readers preferred print and 10% digital, which has moved to around 75% for print and 25% for digital today. 

However, the sales team can now use the data to ask for a larger budget share.

If a media buyer says, “We just want to go all digital because print is dead,” Schumacher’s team can offer a digital-only option, “as long as you’re OK with missing 75% of our audience. 

“How about, instead, you consider an integrated plan? And that makes more sense.”  It is not just the salesperson giving their point of view. 

In fact,  advertisers want to buy into issues during the audit period.

The pandemic had more than one positive consequence for LBM, as it ravaged the magazine industry. The largest competitor folded along with one of the significant events, and Schumacher acquired the research company when Baxter’s owner  retired. 

Lessons learned

• While many publishers have gone all digital to save significant costs on print, “for us, that just doesn’t make sense.” 
• The larger buys also delivered better results for advertisers.
• Simplicity is also crucial. The team doesn’t want to “fatigue our list” with too many products. 

Many thanks to Rick Schumacher for sharing his experience. Schumacher offers Baxter Research Center’s reports  to other publishers. The company will be on hand at the 2024 Niche Media Conference held in April in Chicago.