Was Nat Mags the first domino in the move to monthly figures?

Monthly Magazine Figures - Since NatMags moved to offer advertisers more frequent sales data, the sector has been buzzing with talk of the ramifications. Caitlin Fitzsimmons explores the knock-on effect of the move to monthly

Magazine executives are busy people at the best of times. But last week, between the business lunches at The Ivy and the flying visits to New York, they were forced to squeeze in urgent discussions on the issue of monthly circulation data.

Advertisers and their agencies have been pushing for more detailed circulation data for magazines for years, but the issue came to a head last week when the National Magazine Company dropped a bombshell and announced it would provide a monthly breakdown of its magazine sales.

After days of frantic meetings behind closed doors, rival publishers closed ranks, declared they were happy with the status quo and would not be following NatMags’ lead in the foreseeable future.

But the reality is these publishers will now find it increasingly tough to resist a domino effect being set in motion in the wake of NatMags’ move.

In fact, many in the industry believe it is now only a matter of time before the rest on the industry follows, ultimately and irreversibly changing the way magazine advertising is planned and traded.

So far, rival magazine publishers are adopting a wait and see approach and many are quite critical of the way NatMags has sprung this announcement upon them, with no consultation with the Periodical Publishers’ Association.

One insider said NatMags’ maverick approach undermined the PPA as the forum for decisions affecting the magazine industry as a whole.

However, Phil Cutts, the PPA’s director of marketing and communications, disputes this.

“NatMags’ move was a reasonable surprise, but these are competitive publishers that make competitive decisions,” Cutts says. “It’s part of normal business that these things occur in business. The PPA is a bigger organisation than that.”

Rival publishers also warn that the release of additional data could undermine the six-monthly average reported by the Audit Bureau of Circulations as the industry’s accepted currency.

Sylvia Auton, chief executive of IPCMedia, says: “Meaningful media currencies underpin the entire advertising supply chain – from client to agency to media owner. It is vitally important to all of us to protect the integrity of those currencies.

In a broadside at NatMags, she adds: “Where changes are necessary, they should be discussed and agreed by all stakeholders and not introduced in an abrupt and destabilising way.”

The knives were also out at BBC Magazines, where managing director Peter Phippen issued the following statement: “We’ve always been a strong advocate of transparency in ABC reporting, but have also always thought it better that the industry takes a consistent approach.

“One minute NatMags is having to restate its figures, the next it appears to be trying to gain competitive capital out of openness and transparency,” he says, referring to the fact that NatMags had to reissue its ABC figures in 2003 after inadvertently infringing the rules on bulk sales.

BBC Magazines was initially opposed to following NatMags’ lead, but has taken a softer approach after examining the details and giving the matter further consideration.

“If there’s a consensus across the industry that this will serve the market well, we will be completely cool about it,” Phippen adds.

Emap, another publisher that has been forced to restate ABC figures in recent years, is keen to make a name for itself on the issue of transparency and accountability.

One agency insider tipped Emap as the most likely candidate to be next to follow NatMags’ lead.

But Emap, so far, is holding the line, issuing only the following comment: “We’re happy with the current level of transparency and value Emap offers advertisers through our commitment to reporting active purchase only circulation figures on a six-monthly and annual basis.”

Condé Nast declined to comment for this article, but MD Nicholas Coleridge issued a statement in his new capacity as PPA chairman.

“Magazines already report more information based in general on fewer numbers of issues than newspapers. Submitting ourselves to issue-byissue ABC auditing would pile on audit and administration costs.

NatMags has announced it will provide a retrospective publisher statement, which is a very different issue from an independently audited analysis.”

He pointed out that ABC certificates already include a variance report when magazines sold more than 20%above or below the average but, so far, there have been few examples of this.

Meanwhile, Hachette Filipacchi declared that it would “watch industry trends carefully and make our long-term decision accordingly”.

Commitment will come

Yet media agencies are confident that rival publishers will eventually commit to releasing monthly data. If another major publisher – such as IPC or Emap – buckles to the pressure and follows NatMags’ lead, the rest of the industry would fall into line, they predict.

Paul Thomas, managing partner at MindShare, says it will be six to 12 months before anything happens, but believes other publishers will eventually follow NatMags. “They’ll want to see how it goes,” he says.

Steve Goodman, group press director at MediaCom, says no publisher will be forced to release monthly circulation figures, but he has every expectation that they will.

“I hope they do. I think they will,” Goodman says.

“They won’t want to be seen as if they’re holding anything back.”

Tara Marus, a board director at BJK&E, says other publishers would act quickly once they decided tomake a move.

“They’re very reactive and, for most of them, they’ll have been considering it themselves anyway,” Marus says.

The figures released by NatMags last week are not audited by the ABC and the industry has only the word of managing director Duncan Edwards and his staff that the figures are correct.

No one is seriously questioning their honesty, but ultimately, media agencies would like the figures to have the ABC stamp of approval.

At this stage, it does not appear to be an option.

An ABC spokesman told Media Week that the bureau would neither audit nor endorse NatMags’ figures, because it was prevented from doing so by the industry-approved rules and methods of reporting.

“The ABC doesn’t create rule changes or make any decision on behalf of the industry,” the spokesman said. “Once rule changes have been agreed, it’s the ABC’s role to provide the means to do this.”

The bureau is a non-profit organisation and the cost of auditing monthly figures would be borne by the publishers.

Suck it and see

NatMags released 18 months’ worth of retrospective data last week as a test and the results will be keenly observed by everyone in the industry.

Edwards is adamant the data is there solely for planning purposes and his sales teams will continue to trade on the six monthly ABC averages, as they have always done.

“If it suddenly turns out that our sales people are spending huge amounts of time deflecting retrospective rate negotiations on different issues, then that would make us think again,” Edwards said.

But media agencies may have other ideas.

While planners agree that the information will be extremely useful in analysing trends and promotions, it seems likely it will affect buying as well.

Goodman believes it likely that trading will continue based on the six-monthly ABC averages, given that newspaper rates are generally based on annual figures, despite the release of monthly data.

However, he says it is possible that trading will change and that might not be “such a bad thing”.

“It might be that media owners and agencies agree on an appropriately lower price [for some issues], but this would be offset by higher prices [on other issues],” Goodman says.

BJK&E’s Marus says advertising in a magazine could become more like advertising on a TV show, with the rate based on what is actually delivered.

“It should, in essence, offer some flexibility with rates,” Marus says. “You could build a plus or minus consideration into the rate.”

For the PPA’s Cutts, this is precisely the reason that its members oppose the release of monthly data – because such a shift would add to the cost of advertising.

“More complex trading means more of sales people’s time,” Cutts says.

The NatMags data is new information for the company’s sales staff, as well as for press buyers, and it remains to be seen how it will be used.

If the results are positive – as NatMags and agencies seem certain it will be – rival publishers will find it hard to resist the pressure to follow suit.

Either way, there are bound to be a few more of those high-level meetings in the coming months.


What the other media are doing

Television

Barb reports average viewing figures and commercial reach, per every minute of viewing time, the next day. The system has incorporated developments such as video and multichannel TV, but is yet to take account of trends such as out-of-home viewing.

Chris Hayward, head of TV at ZenithOptimedia, says the system has credibility as it’s electronic and done through a third party. “In terms of current TV data there is an absolute glut of it, really,” Hayward says. “It’s more easily accessible ... and more detailed than it’s ever been.”

Radio

Rajar measures radio listening using a diary system, releasing figures every three months on a rolling basis. For larger stations, the figures are based on three months’ worth of data. For smaller stations it’s six or 12 months.

Rajar is currently holding an industry-wide consultation to produce a new specification in 2005.

More frequent reporting would require larger sample sizes, which could add to the cost, but a switch to electronic measurement could help.

Cathy Lowe, head of radio at PHD, says planners and buyers would like Rajar to release monthly figures on a monthly basis, but adds that “most agencies would be reluctant to pay any more than they’re paying now.”

National newspapers

The Audit Bureau of Circulations audits national newspapers on a monthly basis and reports circulation as an average of about 24 issues (an average of about four issues for Sunday titles).

Steve Goodman, group press director at MediaCom, says newspapers need to be more accountable. At the very least, he would like to see the average Monday to Friday figures broken out from the average Saturday figures. Better still, would be to break out the average sales for every day of the week, so you could compare the average Monday with the average Thursday.

Ultimately, Goodman says newspapers should emulate television and provide single-day circulation data.

Regional newspapers

The ABC reports every six months. Also facing calls for more detailed data.

Internet The industry, through the Interactive Advertising Bureau, recently agreed on a global standard for online measurement. Ad impressions are measured through the ABCE in the UK.

With online, advertisers can choose how many impressions they want to pay for.

Outdoor

Measured by Postar. The system was overhauled several years ago and is now generally held to be working well. The system does not capture ads on public transport or ambient media

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