Although such moves aren't the disgrace for magazine publishers that they once were -- one of the few positives to come out of the spate of circulation scandals that revealed publishers trying a little too hard to make their numbers -- cutting rate base remains a brave step.
'Managing for efficiency'
Following the lead of recent rate-base cutters Playboy and BusinessWeek, Woman's Day said the move will provide better-quality circulation and reduce its incidental, less-engaged readers.
"Our strategy has been about managing for efficiency and maximizing retail dollars for our retailers," said Laura Klein, VP-publisher at the Hachette Filipacchi Media U.S. title. "Reducing rate base shows a sign of strength and confidence in your product," Ms. Klein added. "It's telling the advertisers that you're giving them the highest quality of circulation and that they're only buying the people who really want this magazine."
Competitors, however, snipe that Woman's Day is suffering the effects of increasing its cover price to $2.79 from $2.49 in February. "The price increase is costing them more than 300,000 an issue in sales," one claimed, speaking under the cloak of anonymity. Hachette declined to discuss newsstand sales.
The bigger concern for Woman's Day, which last reduced rate base to 4 million in 2005 from 4.1 million in 2004, is the end of the Seven Sisters ecology and the dawn of a broader competitive set. Though the demise of McCall's whittled the Sisters to six, newer titles including Hearst Magazines' O: The Oprah Magazine, Time Inc.'s Real Simple and Every Day with Rachael Ray from the Readers' Digest Association have intensified the fight for females. The battle on newsstands has been complicated by growing weeklies that sell for less than $2, such as Woman's World and First for Women from Bauer Publications and Hearst's Quick & Simple.
'What's the plan?'
Average paid circulation at Woman's Day fell to 4.1 million last year from 4.6 million in 1995, while average newsstand sales sank to 828,885 last year from 2.5 million in 1995, according to data compiled by Harrington Associates, publisher of The New Single Copy Newsletter.
All of this means, in a reversal of old attitudes, that ad buyers would rather see rate base fall than worry about how publishers are finding new readers. "Back five or 10 years ago, you would raise an eyebrow when a rate base would go down instead of up," said Brenda White, VP-director of print investment, Publicis Groupe's Starcom Worldwide. "I raise an eyebrow when magazines raise rate base. I need to understand how they're getting the additional subscribers or newsstand. What's the plan?"
Woman's Day will not change its open ad rate next year, which means an effective 5% price hike for advertisers in light of the rate-base reduction. The title's ad pages finished last year at 1,788 -- a 15.8% increase over 2004, according to the Publishers Information Bureau. From January through June, ad pages grew 11.4% over the equivalent period last year to total nearly 808 pages.
The bigger picture
But all of this is part of a much bigger picture. As reducing rate base loses some of its stigma, it also looks more likely that dreams of abolishing rate base or setting floating or seasonal rate bases might be realized.
In the ideal world of Hachette President-CEO Jack Kliger, advertisers would buy ads based on the most recent metrics, not six-month guaranteed averages that publishers sometimes struggle to meet. In his first speech as chairman of the Magazine Publishers of America, at the American Magazine Conference last October, Mr. Kliger told attendees rate base was a relic compared to other media's quick and flashy metrics. "Paid-circulation rate-base guarantees are a legacy of an era that predates modern audience measurement metrics," he said.
Ms. White said she believes the industry will keep adjusting paid-circulation guarantees downward as the emphasis keeps shifting from total sales to emerging metrics. "Talking with publishers, a lot of folks are taking a step back and looking at their circulations," she said. "Generally speaking, I think we're going to continue to see this."