Hello.
We're generally great at criticizing and terrible at finding solutions.
I'm like that.
But I'm here to tell you the story
of how we found solutions for an old problem in the magazine market
and the lessons we learned in the process.
And moreover, of how we found out that even having very little
you can make a big difference.
As opposed to the general thought of 'Don't bother, it won't work'.
These are some of the top-selling magazines in Brazil.
They're famous titles, and I'm talking about single sales,
the ones you buy at news stands, supermarkets, gas stations...
The magazine has to win you over, it doesn't just pop into your mailbox.
So it needs an impressing cover, an instigating headline,
It needs to leave you wanting more.
It's a conscious purchase.
Look at them and try to guess which one sold the most in June 2009.
It's surprising to learn that it was neither Deborah's wedding, nor Monica's.
It was neither the plane crash, nor the babe from Big Brother.
Not 1001 ideas for sex either.
It was not business mergers, not divorce in India,
and not the vampire or Michael either.
The top seller in this period was Sorria.
A magazine no one knows, with no hot celebrities or cover stories.
During this period it sold 137 thousand copies,
which makes it, according to the body that audits Brazilian publications,
the 8th best retail-selling title in Brazil.
And June wasn't a lucky month.
Since it came out, it's been among the best selling retail magazines in Brazil.
Well, how does this happen if you're not in the stands and have no subscribers?
It's in the club, sure, but as an outsider.
it has no celebrities, no hot stories,
it doesn't cater to a specific segment, like housewives or tuned car lovers.
It's made for and consumed by men and women aged 18 to 80 in all social classes.
And that's what's so amazing about it.
Not the fact that it ranked, but that it got there without doing anything right.
Anyway, back in 2007, GRAACC, an NGO that supports children with cancer
and runs the largest and best children's cancer hospital in the country
came to us wanting to create a magazine that helped them
raise funds and awareness to the cause.
So we set out to study the market and see how we could do that.
And we were unable to figure out anything that would work within traditional models.
So we had to reinvent ourselves:
how to distribute, how to produce and how to pay for it.
And by doing that, we also learned that good ideas are not enough.
They hardly ever work.
Like naked bikers, for instance.
It sounds good, but try doing it, you'll see it's not that nice.
Anyway, traditionally in Brazil a magazine survives on three things:
selling ads, selling copies and selling subscriptions.
There are several ways to do that but we didn't have the structure
for subscriptions, telemarketing, distribution, so we ruled that out.
Depending on ad sales would also be a terrible idea.
It's the cause of death of 40% of titles that hit the stands each year.
Because that's what makes December editions thicker with ads, and then
and then get thinner in January and suddenly we'd have a bad month
and wouldn't be able to pay our bills and the magazine wouldn't come out.
Well, depending on news stand sales was also an awful idea.
The average stand in São Paulo, I'm sure you've noticed,
features about 3.500 titles.
And the only thing harder than standing out in this sea of covers is getting there.
The only distributor in Brazil charges up to 60% the cover price to get it in news stands.
That contributes to the fact Brazil has some of the highest magazine prices in the world
the average price among top-sellers is today R$ 8.65.
Which is unaffordable to many people.
Anyway, how could we do without any of that?
We wanted no subscriptions, no ads, no stand sales,
yet wanted GRAAC to make money and had to pay our bills.
With that classic question everyone asks when trying to solve a problem,
'How will I pay the bills if I make this change?'
we started putting together the Sorria model and so it was born.
First, we threw out the old recipe. It was no good at all for us.
We decided it would be a social magazine.
Not like People magazine, but because the cover price would be 100% donated to GRAAC.
This alone was unusual , and later we decided we wouldn't look for advertisers every month,
because we couldn't pull it off so we'd do it all at once.
So we would split the whole cost in shares and tell the companies
'Why don't you advertise for a whole year, so the project is guaranteed?'
It would be a sort of sponsorship.
A social action with return in advertisement,
or advertisement with a social return.
So their trade-off was being in the magazine.
Well, when we mentioned this plan, people would pity us.
Later, the time would come when they'd say 'How come no one ever though of that?'.
Like everything in life, you just have to try hard.
Or almost everything.
Sure, our main problem was how to get this magazine to reach people.
And why not use retail, which owns very large chains,
knows how to transport things because they're used to it
and also has a very powerful influence over people and their behavior.
With all these ideas, the model we put into practice came to be.
We call it a Multiplying Social Magazine model.
That's actually a fancy name for something that for now only exists here,
as far as we know Sorria is the only one in the world.
And it works like this:
We have a price, our cost, including staff, printing and the publisher's profit.
It's split into five shares now, and funded by five pharmaceutical companies.
And we sell it through a retailer, Droga Raia, the only place that sells it.
A drugstore chain that embraced the project and showcases the magazine,
not as another product, but as a social action.
They have no profit margin on sales,
and they get all employees to tell customers about the magazine, they get people engaged.
Anyway, we managed to sell this idea
It took us a year of convincing people and designing this model.
And, well, we did it.
Sorria was first released in March 2008, bimonthly,
with a circulation of 120.000 copies that sold out in three weeks.
Today it's 140.000 copies, and only 3% is not sold.
In news stands, this would be 60%.
Only 4 out of 10 copies are sold, the rest is either tossed or given away.
It's a great accomplishment, that's why it's in that ranking,
but it's all thanks to the companies.
It only happened because we have so many partners and everyone's doing what they do best.
Not only that, but also everybody wins.
That's in the nature of projects that usually work out.
They're ones where there's win-win.
Like this one: companies are happy to have a social action with return in advertisement
and on top of that we multiply the money they invest.
If they donated directly to GRAAC, that would be it.
By donating to us first, we sell the magazine for more than it costs
and so with the good old capitalist logic, we grow the dough.
And for the third sector, it's awesome.
because they're getting income and raising awareness
without having to pass the hat around as usual with nothing to trade off.
And it's amazing for the editorial and advertising markets
because it's a new possibility of making mass media and reaching many people
with a much greater meaning than merely profit.
It's also great for the people who buy the magazine
and in doing so help each other.
They help GRAAC and are also helped, because the content is very nice.
The fact that we are payed for when we hit the stores allows us to break free
from many commercial compromises.
And so our covers don't have to make much sense.
After the project's success, we realized how simple it really is to change.
People asked: 'Why hasn't it been done before?' 'Why do they print that much?'
Come on, we sell an average of 136.000 copies per issue, for sale at 270 drugstores.
The average news stand magazine retails at 30.000 stands plus bookstores, etc.
We do a lot with very little.
Also 'small but efficient' is the fact that an issue of our magazine costs R$ 190.000.
This is payed for by companies who are actually engaged in an advertising action.
And last year, Brazilian companies spent 1.8 billion in magazine advertising.
If they spent 1% of that in social advertising, there'd be 15 other magazines like Sorria.
Magazines that have a huge impact because they're a different source of information,
they talk about things that matter.
And they don't need to stick to the same old issues.
And they have the potential to raise several millions for important causes
while democratizing access to information, because they're inexpensive.
When it first came out it cost R$ 2.50 and that's still the price.
With these huge sales we have accomplished a somewhat magical effect.
We have sold 1.2 million copies so far, we pay for taxes and the rest goes to GRAAC.
That's R$ 2.8 million donated to this cause so far.
And that's is actually a lot.
We tend to think only huge companies can do huge things.
That's true, their choices have such power to bring about increadible changes.
But we can do that too.
In the case of GRAAC, among their top 3 benefactors is American Express,
one of the largest companies in the world.
Through a reward program through which people donate their points,
they donated R$ 1.1 million to GRAAC last year.
Their top benefactor is McDonald's, which uses its brand influence for "Mc Happy Day"
a day in August when the proceeds of all Big Mac sales are donated to GRAAC.
That was 6 million between 2008 and 2009.
But among these top 3 is a 'miss congeniality' kind of company.
Because, man, we haven't got many numbers to show here.
All employees are under 30, our greatest perk is an office,
But even so...
Thank you.
It's a nice donation, more than half of our income.
And we're small, man.
So this is the story of Sorria, that's what it tell us.
It's true.
They could cause an earthquake.
And we can use that in other scenarios.
If everyone is in the same page, we can make a great difference even if we're small,
even with limited resources and limited opportunities.
Even if we're young, live far, and have no access.
It can be done, Sorria is proof of that.
The price of the magazine is R$ 2,50, less than the subway fare.
And if I told you this would help cure cancer, you wouldn't believe me.
But if more people believe and purchase, it makes millions of differences.
Almost 3 million differences, in the lives of thousands of children.
This model is being replicated for other causes,
other partners, and soon we hope to have magazines with millions of copies.
With a cost of R$ 1 so that everyone can buy it,
and help, knowing that their money is going somewhere that makes sense,
with accountability, so it doesn't end up in anyone's pocket.
Making something happen, and anyone can help, no matter how small the amount.
That's what these R$ 2.50 do.
Combining all magazines, all the people, it makes millions.
And that's the logic we use to make a large donation through Sorria,
but this logic applies to any change you want to make in the world.
Little by little, we can do it.
Thank you.