Sunday, March 14, 2010

BoSacks Speaks Out: PIB and Big Ad Discounts In '09

BoSacks Speaks Out: I have often ranted about the value of useless data. As we, as an industry continue to grapple with our future and the absolute need for true accountability, so too should we deal with the value of PIB reporting. It does have its place in ancient history and it does try to track some actual aspects of the publishing industry. The actual number of printed pages is hard to fabricate, and I willingly accept that those number are "close" to reality. But the value of posted revenue has become increasingly ridiculous and totally unreliable and unbelievable. Who are they kidding? I challenge any one from PIB to come on stage with me in an open public forum and defend those reported revenue numbers. Has that ever been done? If not, it should be. Exactly who is responsible for this?

The veracity of that kind of reporting is partly why our industry is in such dire straits. I postulate the following: What if we were actually accountable? What if agencies could actually rely on our reported results as gospel? What would happen if we actually told the truth instead of our continued subterfuge?

Pass-along readership numbers are an industry joke and totally unverifiable. PIB revenue based on posted rate card information is disingenuous at the very best.

It is time in the 21st century for the magazine industry to stand tall and declare the facts. We are a noble and honorable business. We don't need to lie to get the business we deserve, but rather we should deserve the business we get. The more the PIB data looses touch with reality, the more we will loose credence with the advertising industry. The future of our business is about undeniable truth and authenticity. Today or tomorrow, we will have no choice. Wouldn't it be better if we accepted the needs of the industry to expose the facts of who we are and what we can do, rather than just fade away as unreliable and irrelevant. Who will answer my call? Do you disagree? Let me know. Let the PIB know. If not now, When?


Big Ad Discounts In '09: Mags Lower Rates 27%-57%
by Erik Sass

Bona fide advertising revenue figures for magazines are notoriously hard to come by, as it is common practice for publishers to give advertisers discounts off official rate cards, meaning that real revenues are often much lower than those reported by the Publishers Information Bureau.

However, you can get some idea of the average discount rate, and with it the general health of the industry, by comparing overall PIB figures with independent revenue estimates.

The official rate card figures compiled by PIB for 2009 put total consumer magazine ad revenues (including newspaper-distributed monthly and weekly magazines) at $21.1 billion, down 17.5% from $25.6 billion in 2008.

This figure is already a bit suspect, however -- considering that total ad pages fell 25.6% over the same time period, from 233,558 to 173,375. While it's not impossible, it seems unlikely that during one of the worst economic downturns in decades, magazine publishers actually raised the average price per page 11% from $109,801 in 2008 to $121,712 in 2009.

Independent analysts seem to agree that the medium's advertising revenues were quite a bit lower than the PIB figures. A recent overview from Outsell has total magazine ad revenues at about $9.2 billion in 2009, while Magna's Brian Wieser pegged them at about $15.4 billion in his January overview of 2009 and forecast for 2010.

Comparing these numbers with PIB estimates, it would appear the magazine industry as a whole is giving advertisers discounts ranging from 27% to 57% off the official rate cards.

It should be remembered that these figures are general, however, as some magazine publishers (like Conde Nast) have a reputation for offering few if any ad page discounts. By contrast, other publishers have reportedly offered discounts of over 70%.

No comments: