Advertisers to Circulators: We Need to Understand Your Business Model

Advertisers to Circulators: We Need to Understand Your Business Model
By Chandra Johnson-Greene
http://www.circman.com/viewmedia.asp?prmMID=3414


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

Publishers' Reliance on Verified Circ Rises; Disappoints Buyers

Publishers' Reliance on Verified Circ Rises; Disappoints Buyers
BY Lucia Moses
http://www.mediaweek.com/mw/current/article_display.jsp?vnu_content_id=1003627806

ABC Fas-Fax report shows publishers' reliance on verified circ grows, despite risks of alienating buyers in spite of controversy surrounding verified circulation, OR public- place copies, publishers haven't stopped using it to pump up their numbers. A year after verified became its own circ category, those magazines most often distributed in doctors' offices and hair salons are on the rise.

A total of 230 titles reported distributing verified copies in the first half of 2007, according to the Audit Bureau of Circulations. That's level with the first half of 2006, when 229 titles reported using verified. But the total number of verified copies has gone up. In the first half of this year, verified copies equaled 13.6 million, or 3.8 percent of total paid and verified circulation. In the first half of '06, verified equaled 13.4 million copies, or 3.5 percent of total paid and verified.

The Audit Bureau created the category of unpaid public-place for the reporting period covering the first half of 2006. Since media buyers began scrutinizing the numbers, they have taken publishers to task for using verified to make rate base and, in some cases, for making dramatic increases of verified copies.

An analysis of ABC's first-half 2007 Fas-Fax, out last week, showed those practices continuing at a number of major titles.

Among titles getting media buyer attention are Bonnier Corp.'s Ski and Skiing, where more than half of total paid and verified circ was verified in the first-half '07. Both reported upticks in verified of 24 percent and 54 percent, respectively, versus a year ago. Group publisher James Pentz said verified or sponsored copies have always been a big part of circ, but that verified recently spiked to replace copies lost as the titles reduce their reliance on subscription agents.

Another heavy user of public-place was Disney Publishing Worldwide's FamilyFun, where verified, at 401,370, was a whopping 20 percent of the 2 million rate base.

Sean O'Connell, consumer marketing director, Disney Publishing's U.S. consumer magazines, defended the copies as a way to reach moms: "It's efficient distribution, it's highly targeted and it helps us capture additional subscribers through insert cards."

At Time Inc.'s Southern Living, verified jumped 40 percent to 121,771 over the year-ago period, pulling the title along to make its 2.8 million rate base in the first half of 2007. Publisher Rich Smyth said verified was tapped to offset low newsstand sales, while noting that verified still met his goal of being below 5 percent of total circ. "Verified is nothing to be ashamed of," he said. "In this case, it's very, very good circ."



In some cases, a change in circulation sources caused an increase in the verified column. At Time Inc.'s Money, verified copies shot up to 214,760 from 20,866 a year ago, which a representative said reflected a corresponding decrease in the number of sponsored and loyalty copies from a year ago.



Publishers stand by verified as a bona fide audience-building tool, but in a survey by TNS for OMD, less than one-third of public-place locations said the freebies they get were a good fit with their locations. The survey was conducted in early 2007 at 150 doctor's offices and hair/beauty salons.



Recently, the Audit Bureau board tightened its verified rules to prevent what some see as abusive uses of the category. Starting Jan. 1, 2008, magazines may no longer count back copies. It also decided that if a publisher reports as verified an issue to a location or individual, it must disclose as verified subsequent issues it serves to that location or individual for the length of the verified subscription term.



In the meantime, media buyers said they would be questioning publishers that had big increases in verified circ. Jack Hanrahan, U.S. print director, OMD, and member of the ABC magazine buyers' advisory committee, said he would steer clients away from titles with unhealthy verified practices, such as using it excessively and to make rate base.


Brenda White, vp, director of print investment, Starcom USA, and chair of the buyers' committee, said in some cases, she would recommend clients not pay for verified. "There's no question, I am concerned about the use of verified in light of the numbers going up," she said. "I don't want to see a lot of it, and I don't want to see it make your rate base."