feature on 2003 Start-Up of the Year Budget Living, published by Adweek
“I have to tell you about the clock I found on the street,” exclaims one Budget Living staffer to another on a recent afternoon at the magazine’s midtown Manhattan offices. “Ohmigod, we have to have it for the Dumpster-diving piece,” responds the colleague.
Found on the street? Dumpster diving? What advertisers in their right mind would be drawn to a book that espouses the virtues of hunting for treasure in the trash? More than you’d imagine, as it turns out.
While it’s true that all of Budget Living’s editorial has a money-saving bent, this is not a publication for the parsimonious. The bimonthly, which launched last October, is a consumer magazine in the most literal sense; the tagline isn’t “Spend smart, live rich” for nothing.
“This magazine is not for the person who’s going to haggle over money when the dinner check arrives,” says editor in chief Sarah Gray Miller.
In fact, the typical Budget Living reader is a woman (roughly 80 percent of the magazine’s readers are female) in her early to mid-30s who has a college education and earns $60,000-plus a year.
“It’s not about belt-tightening in a sad way,” says Miller. “It’s really a sort of a joyous magazine, because bargain-hunting is fun.”
Think of Budget Living as a bible for down-to-earth thirtysomething hipsters who are guided by aesthetics—in fashion and furnishings and overall lifestyle—but not designer labels.
They’re also at the point in their lives when concerns such as college funds and 401(k)s are coming into focus—hence the magazine’s back-of-the-book financial section.
If that sounds like an unlikely audience to target, consider the success of MTV’s Crib Crashers and TLC’s Trading Spaces, exuberant low-cost home-improvement shows that take the dry out of drywall. Trendy discount retailers H&M and Target, and JetBlue, the fashionable but affordable airline, market to a similar hip but thrifty consumer.
Budget Living taps into that same DIY free-spiritedness while combining elements of more narrowly defined magazines into one cleanly designed, upbeat book. Each issue contains articles on fashion, home design, finance, travel, entertaining and crafts.
There are also product roundups that prominently feature buying information. The premiere issue sported a spread on brightly colored chairs ranging in price from a stackable $20 model from IKEA to a Philippe Starck design priced at $372.
“We tend to find all the cheap versions of something and then the one that we would be willing to splurge on, sort of assuming that people have their different splurges,” says Miller.
So far, readers seem willing to live la vida Budget. The bimonthly, which has a cover price of $3.95, is already raising its rate base, from 300,000 to 400,000, with the April/May issue. And it has seen the number of subscribers grow from 220,000 to 330,000.
As for the magazine’s moniker, some advertisers did, in fact, wonder how the “Budget” part could deliver consumers eager to spend money. Target, for one, took a wait-and-see approach when first pitched by publisher and chairman Don Welsh.
“I can see the name being an issue,” says George Janson, senior partner/director of print media for MediaEdge. But Janson says he was “pleasantly surprised” by Budget Living’s presentation.
And so, it seems, are advertisers. Target eventually signed on, joining the likes of JetBlue, H&M, Chevrolet, Ford, Kia, Skyy Vodka, Citibank, Carnival Cruises and Peugeot (the ad’s tagline is “Affordable luxury”). As of the April/May issue, a one-page, four-color ad in Budget Living will go for $30,000, up from $24,000.
Tone is as important as content to Budget Living’s success. Miller, a 32-year-old Vassar grad, has infused the magazine with the brightness and vitality that she projects in person as well as a Sassy-style sense of humor that helps set it apart from older-skewing competitors such as Real Simple and Martha Stewart Living.
“Any idiot with a platinum card can put on an accent and buy a $150 Château Margaux. But few things are more satisfying than finding, and drinking, a dazzling wine that costs less than $15—especially when you wake up the next morning without a financial hangover,” began an article on wallet-friendly wines in the premiere issue.
“The writing has definitely got to be humorous and fun and a little bit silly sometimes,” says Miller.
Welsh chose Miller—who has worked at four startups, including Saveur and Organic Style, where she served as editor—for the job from more than 30 candidates. He credits her with making the book “much more cutting-edge and chic- looking” than he had imagined.
“She learned the magazine business inside out,” says Dorothy Kalins, who oversaw launches of Garden Design and Saveur with a just-graduated Miller as her assistant. Kalins, the current executive editor of Newsweek, says Miller has found the right publication for her sensibilities. “She’s got a ferocious sense of what’s right. She loves her reader, and she loves the subject matter.”
Recently, other magazine companies—such as Hearst, with last fall’s outsert Chic Simple, and Meredith, with its test of Living Room—have explored Budget Living’s subject matter. Welsh contends that the competition will ultimately help him win ad dollars by bringing more attention to the category.
“If there are two more magazines like ours out there, there’s going to be a pot of money that we’ll all get a piece of,” he says.
Not only does his magazine have a jump on newcomers, soon it may also have its own spinoffs, including a Trading Spaces–type cable show that will offer entire-life makeovers, from credit-card bills to closets. (Welsh is finalizing the concept with a production company and then will look for a network.) A syndicated newspaper column and a book series are also in the works. “You name it, it’s sort of a Martha Stewart horizontal chart,” says Welsh, in a nod to the woman who is as skillful at launching ancillary product lines as she is at making the perfect bûche de Noël.
But Welsh’s focus is still very much on establishing the magazine itself, including courting readers. He estimates that 70 percent of Budget Living’s subscribers (as of the April/May issue, total circ will be 420,000) have come through continuous service, in which readers are solicited through ads accompanying their credit-card statements—in this case, Visa, MasterCard and American Express. Renewals are automatically applied to the credit card, unless the respondent indicates a desire to the contrary. “It’s really good for the magazine business,” says Welsh of continuous service.
Welsh is also a fan of gift subscriptions, saying that the renewal rate on gift subscriptions is “sometimes as high as 80 percent.” For the first two issues of Budget Living, which were out before the holidays, he offered readers the chance to buy an annual subscription at the going rate of $14.95 for themselves, and as many as five $1 gift subs for others. That tactic netted almost 12,000 subs. “Yes, you lose money on the first year, but these will renew at $14.95—a huge number,” Welsh says.
He has demonstrated a knack for niche pubishing. His Welsh Publishing Group, which he founded in 1982, created some 40 children’s magazines, including Muppet Magazine and Barbie Magazine. He has also served as associate publisher of Rolling Stone and was the first publisher of Outside.
Welsh has had success with the shoestring concept once before, having launched Arthur Frommer’s Budget Travel in 1998. At the time, the category belonged to glossies such as Condé Nast Traveler and Travel & Leisure, whose editorial was aimed as much at people who own jets as people wanting to jet somewhere.
But he faltered in 2000 when he ventured away from magazines and into technology as president of Digital:Convergence’s publishing group. Digital:Convergence produced Cue:CAT, a handheld device for PCs that was designed to enable readers to scan URLs printed in magazine ads and be instantly connected to the Web site. (Forbes was a Digital:Convergence partner, as was Adweek.) It never caught on, though Digital:Convergence’s Web site promises that the Cue:CAT “will scan again.”
“I don’t think it will ever work, but if so, it was definitely before its time,” says Welsh, adding that he doesn’t regret the effort but sometimes wonders about his choice. “I spent my whole life at magazines. One year I got out of magazines and now I think, ‘Why did I do that?’ Because I only understand magazines. I don’t even like computers that much,” says the man who prefers the phone to e-mail. “[But] it was an interesting year.”
In any case, there isn’t time for regret. Budget Living and its steady expansion are seeing to that.
Of course, it hasn’t hurt Welsh’s cause that the economy has lost its blush, creating a greater number of cost-conscious consumers. Nor has it been to his disadvantage that he has launched a nontraditional women’s magazine at a time when there is greater acceptance of publications outside the norm. Think of O, The Oprah Magazine and its New Age, self-help mind-set, or Lucky and its colorful catalog-like celebration of shopping, or Real Simple, that bastion of clarity and organization.
Welsh predicts Budget Living will be in the black in its second year—”maybe before,” he says. And when it does become profitable, he’s going to sell it, as he did Budget Travel. (In 2000, he sold that magazine to the Washington Post Co., which also owns Newsweek.)
“I think this magazine has the possibility of [reaching] a million, 2 million in circulation,” Welsh says. “When it’s ready, it really should be passed on to somebody who has this enormous machine that can make this an enormous venture, a global venture, which I think it can be.”