Divorce Rate base, get engaged

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This year's American Magazine Conference concluded last week after striking a more confident chord than in recent years, when fear of the Web and other media dominated. But aggressive challenges from veterans such as Jack Kliger stuffed some new soul-searching into the dispersing publishers' baggage.

Mr. Kliger, president-CEO of Hachette Filippachi Media U.S., warned attendees that the industry's slow and infrequent metrics give other media a competitive advantage. "Paid circulation rate-base guarantees are a legacy of an era that predates modern audience measurement metrics," he said in his first speech as incoming chairman of the Magazine Publishers of America. "Circulation-based metrics are irrelevant in calculating advertising return on investment."

Many in the industry want advertisers to pay based on readers' engagement with their magazines, which they say exceeds consumers' attention to media like TV and radio. And media other than magazines have long set rates based on the total audience exposed to advertising, not the number of customers who pay for content. Plenty of publishers want to move the emphasis in sales pitches away from what a consumer pays for a magazine to whether or not a reader was moved to act on an ad.

"Jack is right," said Mary G. Berner, president, Fairchild Publications. "It's absurd that reader value is still based on such arcane measurements."

Mike Klingensmith, exec VP, Time Inc., said he agreed that audience delivered is more important than copies delivered in measuring the returns for advertisers. "We also feel strongly that who the copies go to and how engaged these recipients are is more important than how much, or if, the recipients paid for the copies."

But with total paid circulation under scrutiny these days, publishers that have strived to maintain strong, unassailable paid circulation bases are less excited about abandoning a rate base model.

Another executive, speaking only if he would not be identified, pointed out publishers have control of certain circulation spigots under the current model. Audience fluctuates more widely and for less clear reasons, meaning an audience-centered business takes some control away from publishers and could leave them indiscriminately chasing eyeballs. "If this was reality you would not be able to walk into most high-traffic locations because there would be so many magazines they would fall on your head."

Not sold

And some buy-side executives said they were not yet sold. "It's a very convenient argument given everything going on right now with magazine circulation," said George Janson, managing partner and director of print at Mediaedge:cia.

Jack Hanrahan, senior VP-print, OMD, had another concern: smaller magazines can't provide the kind of third-party audience research-such as that sold by Mediamark Research Inc.-that could replace traditional metrics. "Rate bases serve a very important function for all magazines but especially at magazines that don't have syndicated research," he said.

And a publishing executive said Mr. Kliger's suggestions were fine by him but not yet alright with the ones who count the most. "If the advertisers want to rise up and say this is a waste of time, we don't care about paid circulation, we're just going to go on MRI, hallelujah," the executive said. "But I don't see them saying that."

Many attendees to the conference, which was co-hosted by the MPA and the American Society of Magazine Editors, at least seemed enlivened by Mr. Kliger's gauntlet-and even some of the less controversial moments.

ASME staged an extraordinarily effective pep rally when it unveiled 40 great magazine covers from the past 40 years. The MPA said its Web site briefly crashed as a crush of visitors tried to view the winning covers there (See Work, P. 46).

The spirit of industry-building, rather than intra-industry sniping, was strongest at the conference's first-ever Hispanic magazine summit on Oct. 15 (co-sponsored by Advertising Age), which attracted about 140 participants. In remarks that general-market publishers would echo later, speakers at the Hispanic meeting said they wanted to expand their collective business first and compete among each other second.

Attendance for the overall gathering fell to about 500 this year from around 600 in 2004, a dropoff that many attributed to the meeting's location in Puerto Rico, a slightly further haul than Boca Raton, Fla., last year.

With publishers and the rest of the crowd mostly back at their desks by the end of last week, all that remained was to see whether action will emerge from the talk-and whether any action successfully moves magazines up the media-planning food chain.

Though changes may come, some said, prepare to wait anyway.

"We crawl," said Robin Steinberg, senior VP-director of print investment at MediaVest, describing the magazine industry. "We don't even take baby steps."

On the Web

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