Why Can't We Be Friends: Resolve the Editorial-Advertising Dilemma

Why Can’t We Be Friends?Resolve the Editorial-Advertising Dilemma

Preliminaries

• About us• About you• Back channel rep: #amp11• What are your most important questions?

Children’s Hospitals Today Then & Now

• 1993– quarterly– 32 pages, ½ 4-color, ½ 2-color– in-house ads– limited budget

Children’s Hospitals Today—Then

Children’s Hospitals Today—Then

Children’s Hospitals TodayThen & Now

• 2011– quarterly — 3 print & 1 online only– 48 – 64 pages, 4-color– 10 – 12 pages of ads/issue, plus 8-page resource

directory x 2– 3 – 5 in-house ads– limited budget, with freedom to experiment

Children’s Hospitals Today—Now

Children’s Hospitals Today—Now

Magazine Distribution

• Member benefit—distributed to 5,500 children’s hospitals administrators

• Members of Congress• Free subscription offers to media and allied

associations

Magazine as Member Benefit

• Flagship publication– involves members and association staff – excellent ratings in annual member survey

• Ours, not mine

Magazine as Member Benefit

• Education, networking– connects members to programs & projects– provides contacts for more info

Magazine as Member Benefit

• Promotes member hospitals– photos from hospitals– public officials visits– child’s story, hospital highlight, hospital rounds

Sponsorship + Ads

• More selling opportunities – can speak about ad and sponsorship opportunities in the same conversation to find best fit

• Customization opportunities – high level sponsorship packages can be modified and ads are often a way to offer alternative benefits

Sponsorship + Ads

Sponsorship + Ads

• Ads are bundled into sponsorship packages- Conferences offer a reach of 500 - 600 attendees- Ads offer a larger reach of 6,000 + subscribers- Ensures a stable amount of ads in each magazine

issue

Bundled Ad Structure

Partner Ads

Special Ad Options

Building Sponsorship Support

• Conferences• Programs & projects• Working with existing relationships– McManis, Health Ink, Karlsberger

Building Sponsorship Support

• Role of magazine in sponsorship– discount ads – article submissions– resource directory distribution

Children’s Hospitals Today—Now

Children’s Hospitals Today—Now

Realignment Sponsorship + Magazine

• Separation of advertising and editorial• Regular vendor article submissions• Freedom to experiment– special issue on facility design– inserts– technology support for green design online– cover wrap

Children’s Hospitals Today—Online

Technology Makes It Easy to Be Green

UBIT – What is it?

• Criteria:– Trade or business– Unrelated to tax-exempt purpose– Regularly carried on

• Sponsorship dollars are NOT subject to UBIT• Advertising dollars ARE subject to UBIT

Avoiding UBIT

No net revenue = no UBIT

GREAT!

Wait…how do I do that?

Net Costs > Net Revenue

Sources of revenue: advertising, subscriptions, percentage of membership dues

Sources of expense: direct advertising costs, “readership” costs

So how does this work?

UBIT Resources

• IRS Publication 598, chapter 3– http://www.irs.gov/publications/p598/ch03.html

• Infobloom – http://www.infoloom.com/taxmap/pubs/p598-

007.htm

UBIT Resources

• Steptoe & Johnson white paper– http://www.steptoe.com/assets/attachments/

3445.pdf

• Association Law Handbook, chapter 76, pp. 384-392

UBIT Resources

• Sponsorships, Advertising, Endorsements and Cause Marketing: Understanding Critical UBIT Issues for Nonprofits – webinar/luncheon at Venable LLC June 16, 2011

Q&A

• Questions for us• Question for you:– What should we try next?

Takeaways

• Separate functions, same department (“Matrixed” team)

• Including ads with a larger corporate package full ad pages, which is appealing – ads breed ads

• Sell big (1/2 page, full page, inserts)• Price low but not too low

Takeaways

• Be flexible & open to suggestions from your corporate supporters

• Be open (internally) about what you’re doing trust freedom to experiment

• Have an ad manager and give her flexibility – “let’s make a deal”

Takeaways

• Role of in-house ads – really helps to have an ad manager who’s also a designer (but you can’t have Nicolette)

• Sponsorship dollars are tax exempt – advertising dollars are not

• If total publication costs > total publication income, no UBIT

Stay in Touch!

Nicolette DaleskeAssistant Director, Sponsorshipp: 703.797.6087e: ndaleske@nachri.org

Elizabeth Weaver Engel, MA, CAEDirector, Marketing & Sponsorshipp: 703.797.6041e: ewengel@nachri.orgt: @ewengelli: http://www.linkedin.com/in/ewengel Thanks for Playing:

http://thx4playing.blogspot.com/

National Association of Children’s Hospitals & Related Institutions703.684.1355www.childrenshospitals.net

Sallie StrangDirector, Communicationsp: 703.797.6013e: sstrang@nachri.org