Saturday, September 22, 2007

Advertisers to Circulators: We Need to Understand Your Business Model

Advertisers to Circulators: We Need to Understand Your Business Model
By Chandra Johnson-Greene

What do advertisers really think about verified circulation? Attendees of the "Advertiser Expectations and Perspectives in Advertising" session at yesterday's 2007 FMA Day in New York City got an earful from both sides of the debate.

Nicole Bowman, president of Bowman Circulation Marketing, moderated a panel that consisted of Steve Greenberger, executive vice president and media director, SLG Advertising; Rebecca McPheters, president, McPheters & Company; Ralph Monti, president/CEO, Special Interest Media, Inc.; and Harlan Schwartz, SVP and group account director, TargetCast tcm.

The panel based their discussion on a comparison between June 2007's ABC Publisher's Statements (only 77 percent of statements have been completed), which shows that verified circ represents 3.7 percent of the total circ reported, to June 2006, where verified circ had a 3.5 percent total.

Greenberger said he anticipated a more dramatic increase, but that publishers have been forced to be more conservative because verified circ has been "thrown under a magnifying glass."

Schwartz admitted that advertisers do use verified circ as just a "leveraging tool" in order to get the lowest prices for their clients.

"We did our circulation analysis, ripping them apart-every paragraph, every line item-to find a loophole, so that we could negotiate a better rate," he said, referring to a previous client he handled.

"That was the charge and the measure of success in the media buying unit. 'Can I nickel and dime a magazine to get a lower CPM?'-end of story. And if we were able to beat last year's price, I was successful, the agency was successful and they were compensated accordingly."

Schwartz added that the way the data is being reported is not the problem. "In my perspective, he said, "we just need to understand how you model your business growth."

McPheters noted that, regardless of how advertisers feel about verified circ, publishers would be forced to increase the use of it.

"The business model for all media is changing," she said. "Look at newspapers like The New York Times, which is making all of its [online] content free. Consumers are increasingly getting access to media that they don't have to pay for. If print is going to change what is a highly viable way of reaching consumers, then it is imperative that we're allowed to do that effectively. Therefore, we still expect verified to grow because we have to change if the environment around us changes."

McPheters added that advertisers, should in fact, pay more for public-place copies because they can reach an estimated 30-50 readers per copy.

The discussion quickly turned to the circulation business model itself and whether the 30-year call for a revision, as Schwartz described, could be easily established. He expressed that he'd like to see print switch to a CPM model that fluctuated by issue in the same way that TV and radio does.

"I would be frightened if we moved too quickly in that direction because there's no audience data to back up your pricing model if you went that way," Schwartz said. "No one has engagement in an apples-to-apples fashion, and we've been screaming for that for 30 years and there's still no resolution

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