Thursday, June 21, 2007

Buyers Still Choose Time's Circ Over Audience

The best time to plant a tree is twenty years ago. The second best time is now."

Buyers Still Choose Time's Circ Over Audience
by Lucia Moses

Last fall, Time announced sweeping changes in the way it would do business, planning to offer advertisers the chance in January to buy ads at a 19 percent reduced rate base of 3.25 million, or by a guaranteed audience of 19.5 million. Nearly six months after the new sales approach took effect, media buyers seem to be keeping it Old School and not buying by audience. While the newsweekly says it's ahead of plan in getting advertisers on board, nearly a dozen buyers surveyed by Mediaweek reported none of their clients signed up for the audience option or that they haven't heard much about it.

A widely expressed buyer concern was that the guaranteed audience, representing adults 18-plus, as measured by MRI, is too broad. Others said the audience data are too new and worried that it could be manipulated. Some balked at Time's demand that they commit for the entire year.

Kelly Foster, print director, senior partner, MindShare, said she recommended that her clients, which include pharmaceuticals, financial services and packaged goods marketers, continue to buy on rate base. Kelly said in addition to the broadness of the audience, she was concerned about the methodology (MRI measures audience by asking adults if they read a particular magazine). "The self-reported nature of it makes it very difficult to trust it for buying purposes," she said.

Others said they supported Time's initiative, even if the audience data are too new. (Time is using MRI's new Issue Specific Readership Study as a basis for its audience, but MRI's issue-specific audience data likely won't come out until this week.) "We look forward to working with audience guarantees for all titles when the research is more timely and accurate," said Robin Steinberg, senior vp, director of print investment and activation, MediaVest.
Buyers also noted that other steps the magazine has taken to stay competitive in a nonstop news cycle haven't led to key changes in their appraisal of Time. The weekly moved its on-sale date to Friday from Monday, while managing editor Rick Stengel has made the magazine more visually dramatic, and put more focus on breaking news on the Web site. Even those who said the on-sale date change could help Time accumulate an audience faster said it wouldn't impact their recommendations.

"Is it fundamentally changing our evaluation?" Serge Del Grosso, executive vp, director of media planning at Lowe New York, said of the audience offer and new on-sale date. "No."
Ed McCarrick, president and worldwide publisher, Time Group, acknowledged that a lot of clients are waiting for issue-specific audience data. A "variety of clients," which he wouldn't name, have signed on, he said. Time estimates 20 to 30 percent of clients to be buying based on audience by year's end. "We're right where we want to be on every [index] we set up, and that's not a smoke screen," he said. "Actually, we're ahead of where we thought we'd be."

McCarrick said clients have responded well to Time's effort to foster speed in audience reporting, although Time hasn't yet signed up for the Audit Bureau of Circulation's Rapid Report, which allows for continuous online circ reporting. "We've had enormous positive feelings out there," he said. "Because I think everybody's about immediate return on investment."

Stengel said the earlier close lets Time reach readers when they have more leisure to read it, and that internal research showed people are spending more time with it. "They're enjoying getting it Friday and reading it on the weekend, which is when they said they've always wanted to get the magazine," he said.

It's unclear if the Friday on-sale date has helped Time on the newsstand, though. Preliminary newsstand estimates from an industry source show Time fell 10 percent in the first quarter of '07, a period in which Time published one fewer issue (a spokesperson said the decline is not that steep); Newsweek was down 2 percent. (U.S. News & World Report grew 9 percent, a rise it attributed to some strong-selling history and service covers.) Time, Newsweek and U.S. News averaged 133,084, 110,588 and 36,666, respectively, on the newsstand in the six months ended December 2006, per the ABC.

Only about 30 percent of newsstand copies are getting to racks by Friday, though, according to distribution sources. McCarrick pointed out that single-copy sales are a small percentage of total circ (3.3 percent), and that 90 percent of home-delivered copies are getting to subscribers by Saturday. "We're right on the number that we want to be at in terms of our newsstand distribution for Fridays," he said.
Another complicating factor is that all have raised their cover prices in recent months: Time by $1, to $4.95; Newsweek by 55 cents, to $4.50, and U.S. News by 50 cents, to $4.50.
Greg Osberg, executive vp, worldwide publisher, Newsweek, allowed that the Web has impacted Newsweek's newsstand sales (which he contended were essentially flat in the first quarter), but said Time hasn't hurt Newsweek by going on sale three days earlier. Recognizing the Web's impact, Newsweek has been focusing on building its online site, with a redesign on the way in the coming months. Both titles' sites have grown over the past year, although (linked to by kept its lead over in May, with a unique audience of 6.7 million vs. Time's 4.6 million, per Nielsen//NetRatings.

Elsewhere on the circ front, McCarrick said an adjustment in the draw has resulted in a roughly 4 percent improvement in sell-through. He said that with the ABC publisher's statement for the first half of 2007, all subscriptions will be to direct-to-publisher. Verified, or public-place, copies will be down to about 4 percent, from 8.8 percent in the second half of '06. (Newsweek does not use verified copies; at U.S. News, 1.8 percent of circ was verified.)

For now, newsweeklies face a tough ad climate. Pages for Time fell 5.4 percent through June 25, while Newsweek slid 4.3 percent through June 18, per the Mediaweek Monitor. (U.S. News was up 4.8 percent.) Osberg pointed to softness in automotive, in addition to pharmaceutical and tech. "We've taken a pretty dramatic hit, and so have all the weekly magazines," he said.

"Ten years ago, our largest advertisers were headquartered in Detroit. And that is not the case by far anymore." McCarrick said despite soft domestic auto, foreign auto, pharmaceutical, financial and luxury ads have been strong in Time, with the result that, although the title rolled back ad rates this year in line with the rate base cut, revenue declined less than ad rates did. He believes eventually, audience will be the currency for buying magazines, just as it is for TV, radio and online.

Meanwhile, Stengel plans more changes, like new writers and a fresh approach to covering elections: "I feel like we're just at the beginning. Now we can actually run a little bit."

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