I recently had the pleasure of interviewing two of the most influential forces in publishing today: Cathie Black of Hearst and Jane Friedman of Open Road Integrated Media at the Publishing Business Expo. We spent an hour talking about the impact of digital on the book and magazine industries and both Cathie and Jane were immensely impressive. To open our session entitled Reinventing ‘s Publishing Company, Cathie and Jane each spent 10 minutes in their opening remarks. Jane presented the 4-layered “cake” that is the structure of Open Road, and Cathie played a video and followed it up with an overview of the goal behind the massive effort that will roll out behind the campaign entitled “Magazines, The Power of Print.”
After she played the video Cathie said “We don’t have a print problem in magazine publishing, we have an advertising problem.” I couldn’t agree more.
The Power of Print video attempts to make a powerful statement about the importance of magazines – the industry is not struggling because of a lack of print subscribers – it is struggling because of the bottoming out of advertising rates. This is born out with the staggering statistic that pops up in the video: “The annual number of paid subscriptions is nearly 300 million.”
300,000,000 is a very compelling number – that’s one magazine subscription for every American. In fact, the publishers in the video see well over 95% of their revenues from print – be it paid subscriptions or advertising in those print magazines. Looking at those numbers one has to wonder why the industry has been hit with such a devastating loss of advertising value.
And therein lies the rub – the loss of advertising value is what we are talking about – not The Power of Print.
What is painful to watch in this video is the intentional avoidance of any mention of print based advertising – its methods, its metrics, and its ability to empirically demonstrate impact. This video, and the massive print campaign it is tied to, is intended to reach advertisers and remind them of the important of magazines as a tool to promote their products. To demonstrate the “power of print” the video shows a series of call out quotes. Looking at these quotes, even a novice in the science of advertising such as myself can see gaping holes in all of these factoids.
“Magazine ad recall has increased by 13% over the last four years.”
For starters, is there compelling evidence that “ad recall” helps sell products better than other forms of action based advertising? I have no problem accepting the notion that ad recall is important for branding and branding building – but by leading with that stat are magazine execs saying that brand building is the only form of advertising appropriate for magazines? Furthermore, does ad recall have anything to do with the number of ads per issue? If advertising rates and the number of ads running are both down, isn’t it logical to assume that fewer ads equal means less to recall, and therefore ad recall would increase?
“Adults 18-34 read more issues than adults 35 and older.”
The age of readership is clearly important, as advertisers are always seeking the holy grail of 18-34 year olds. Learning that this important demographic reads more issues than their older counterparts sounds like a very important stat. However, what does “reads more issues” mean? Do they read more articles per issue? Buy more newsstand magazines? Subscribe more often? Is this a new trend or has this always been the case? The lack of connection to something that an advertiser might care about such as response rates, buy rates generated from print magazine campaigns, etc., leaves me wondering about the true importance of the demographics of “readers.”
“The average reader spends 43 minutes reading each issue.”
The time spent per issue is intended to demonstrate the stickiness and immersive quality of the content as compared to the average website. We all know that only a few websites have anywhere near that level of immersion (though Facebook comes to mind as an example of one that does) and this stat tries to show that the average Internet site and search engine pale in comparison to the stickiness of a print magazine. But again, there is a big gaping hole in this assumption as the average magazine is a monthly – meaning that magazine readers are spending 43 minutes a month reading magazines. Comparing usage to the Internet is a bad idea as people on average spend a heck of a lot more than 43 minutes a month online. According to Nielsen/Netratings, “U.S. consumers were online… 12 hours, 6 minutes on the Internet in October, up 7.7% from 11 hours, 15 minutes in May.” That is 43 minutes versus 726 minutes – need I say more?
“Readership has actually grown over the last five years.”
Finally, what I consider the most important and hopeful statement of all. Note this does not say print readership – I will assume this is due to the fact that subscriptions have grown and all of these magazines have created a growing base of Internet properties that are finding more and more online readers everyday. To me, this points to a very hopeful future as the migration of readers online will lead to the kind of advertising opportunities that these amazing magazine brands do not deliver in print. Online or other types of digital properties will enable the magazines to carve out a constituency that only a content vertical company can pull off: a community of readers who value their content and the brand and authority of their magazine as a trusted resource. While less than 5% of their current revenues are derived digitally, there are many others out there that have already moved their businesses to the point where digital is their sole focus.
Take IDG, the privately held technology-publishing giant headquartered in the Boston suburbs. CEO Bob Carrigan recently told me that IDG’s print US revenues are down to 38% of total revenues! Mind you, this wasn’t an easy transition for IDG, as it had to re-engineer its entire orientation and focus on digital revenue streams. Yet Bob acknowledges that his audience (and advertisers) are steeped in the Internet in a way that broader based consumer magazines are not, making it somewhat easier for IDG to leap into the digital realm. However IDG saw only one possible outcome ahead and made the difficult decision to only look forward to how their business must operate, and not backward at how things used to be. IDG has, among other things, built its own online advertising network, enabling it to deliver not just the impressions needed to grow advertising, but the key metrics and click-through tracking that today’s advertisers require.
The key to advertising success is proving the value of the platform. As Google has demonstrated that click-through ads (as opposed to impression driven or display ads) are the most cost effective possible advertising, media companies have been set adrift trying to find ways to support their ever falling ad rates base. The rates have fallen as the click-through model is pay-per-performance, not pay-for-exposure. And what advertiser doesn’t want to pay for an action after it happens, versus simple exposure with no mechanism or guarantee of action? Only those looking for a brand building exercise could seriously consider the latter.
So here we are in a world of performance-based advertising, watching a video by the magazine industry trying to prove to potential advertisers the power of display ads.
There is clearly a power to print – but there is a far, far more powerful means for advertisers – and its digital.