Monday, August 20, 2007

Publishers May Give in and Guarantee Rate Base by Issue

Publishers May Give in and Guarantee Rate Base by Issue
Some Still Say MediaVest Request Is 'Untenable,' Will Continue Using Average
By Nat Ives

NEW YORK (AdAge.com) -- There's a few months to go before MediaVest's stare-down with the magazine industry hits a critical juncture, but it looks as if some publishers are starting to blink.

In May the media buyer demanded that publishers guarantee each issue's circulation instead of averaging multiple issues like usual -- and said it would pull clients' ads from magazines that don't go along by 2008. Because of the highly competitive nature of ad buying, the response from both publishers and other agencies has been dissonant. Most publishers wouldn't discuss the topic publicly, partly because no one wants buyers to know the terms other buyers are getting. But the sometimes-touchy talks still suggest that the unpopular push is finding traction.

Private talk with Men's Health
Men's Health actually agreed last year, according to Publisher Jack Essig. That's when Robin Steinberg, senior VP-director of MediaVest print investment and activation, first asked him in private. "We're also trying to get her to pay when we overdeliver," he said. "But Men's Health would do it for any media buyer."

Other publishers have dismissed the idea. "Penalties for underdelivery without bonuses for overdelivery is untenable," one said, repeating a common refrain.

The conflict is part of the broader issue of how best to measure magazines, which are under pressure from rising costs and new competitors. Media buyers want publishers to report sales more frequently than the customary twice a year. But the tool designed to help, ABC Rapid Report, from the Audit Bureau of Circulations, is still struggling for mass after a year in operation. American Media, publisher of titles including Star and Shape, recently quit the tool because its competitors weren't participating and thus had gained an intelligence advantage.

However, Hachette Filipacchi Media U.S., whose magazines include Elle and Woman's Day, said last month it would put all its titles in Rapid Report.

But Hachette is tacking the other way on issue-specific guarantees. After experimenting with the idea at two magazines, the company is instead adopting guarantees averaged across the issues in which advertisers buy space. It's unclear whether there will be room for negotiation.

Not all buyers united
Media buyers at agencies other than MediaVest seem as mixed on the question as publishers. "This is nothing more than MediaVest negotiating in the press while there are more pressing, burning issues we as an industry should be concentrating on -- such as retaining readers," one buyer said. But he said he has warned publishers he'll go back and demand issue-specific make-goods if he finds out they've guaranteed individual issues for other agencies.

It's lucky for publishers, then, that he was skeptical of a competitor's claim to have long received those guarantees. Beth Fidoten, senior VP-director of print services at Initiative, said the agency has sought and received issue-specific promises for five years.

"The six-month average is really a thing of the past," Ms. Fidoten said. "That's from a day when schedules were planned for the entire year and often had continuity for the entire year. Since that's not how media is planned and bought anymore, it's really important that an advertiser is guaranteed circulation for every issue they're in."

Many publishers have called new guarantees unnecessary because their magazines miss rate base only rarely and barely. MediaVest, however, has proved more concerned about protecting against dubious circulation practices -- such as increasing waiting-room copies and other "verified" circulation to make up for previous or anticipated shortfalls.

1 comment:

a consultant said...

We've entered an era where Harry Potter should live, where magazines predict unfailingly how a given issue will resonate with readers; i.e. magic is afoot!

I wish we all had magic wands, but it would seem from my vantage point that MediaVest is just trying to place all of the risk on the publisher, and not even pay when the outcome is better than predicted. Just like my teenager, who thinks in this day and age that there is more status in to getting paid for nothing than there is in working hard.

Times, they are a changin'.