A Blog by Jonathan Low

 

Oct 13, 2015

Challenged By Internet, Magazines Offer Money Back If Ads Fail To Deliver

Of course, internet and mobile ads haven't been able to guarantee a causal relationship between ads and purchases either, but perceptions of a stronger and more immediate connection there are driving performance in competitive fields.JL

Jeffrey Trachtenberg reports in the Wall Street Journal:

Money back—or free ad pages—if sales don’t increase after running print ads in their publications.16 major media companies representing 72% of the total magazine audience in the U.S. qualify to offer the program. These include Time Inc ; Meredith Corp. ; Hearst Magazines, a unit of Hearst Corp.; and Condé Nast, a unit of Advance Publications Inc.
Magazine publishers say it is an offer advertisers can’t refuse. Their money back—or free ad pages—if sales don’t increase after running print ads in their publications.
The new industry guarantee was organized by the MPA, the Association of Magazine Media, which said that 16 major media companies representing 72% of the total magazine audience in the U.S. qualify to offer the program. These include Time Inc. TIME -0.76 % ; Meredith Corp. MDP -0.87 % ; Hearst Magazines, a unit of Hearst Corp.; and Condé Nast, a unit of Advance Publications Inc.
A year ago, the industry trade group moved to boost publisher credibility with marketers by launching a monthly audience measurement tool that counts how many readers are consuming magazine content in print and online (including video), and via their smartphones, computers (desktop and laptops) and tablets.
Both initiatives reflect the association’s efforts to counter the perception that magazines are losing clout with readers as witnessed by a decline in print advertising. U.S. magazine print ad spending is expected to shrink 1.8% this year to $17.4 billion, according to a forecast from ZenithOptimedia, a media buying firm owned by Publicis Groupe SA.
“Print is the heritage format of this industry and advertisers have pulled their business back disproportionately,” said Mary Berner, the trade group’s former chief executive, who quarterbacked the guarantee strategy. This week she joins radio station owner Cumulus Media Inc. as its CEO.
Magazine publishers say it is an offer advertisers can’t refuse. Their money back—or free ad pages—if sales don’t increase after running print ads in their publications.
The new industry guarantee was organized by the MPA, the Association of Magazine Media, which said that 16 major media companies representing 72% of the total magazine audience in the U.S. qualify to offer the program. These include Time Inc. TIME -0.76 % ; Meredith Corp. MDP -0.87 % ; Hearst Magazines, a unit of Hearst Corp.; and Condé Nast, a unit of Advance Publications Inc.
A year ago, the industry trade group moved to boost publisher credibility with marketers by launching a monthly audience measurement tool that counts how many readers are consuming magazine content in print and online (including video), and via their smartphones, computers (desktop and laptops) and tablets.
Both initiatives reflect the association’s efforts to counter the perception that magazines are losing clout with readers as witnessed by a decline in print advertising. U.S. magazine print ad spending is expected to shrink 1.8% this year to $17.4 billion, according to a forecast from ZenithOptimedia, a media buying firm owned by Publicis Groupe SA.
“Print is the heritage format of this industry and advertisers have pulled their business back disproportionately,” said Mary Berner, the trade group’s former chief executive, who quarterbacked the guarantee strategy. This week she joins radio station owner Cumulus Media Inc. as its CEO.
 One media buyer said the guarantee could spark an increase in print spending, although it is too early to tell.
“Any time you can provide data that proves print works, it’s a good thing; a guarantee makes it even better,” said Brenda White, an executive vice president of the media-buying agency Starcom USA, a unit of Paris-based Publicis Groupe SA PUBGY -0.66 % .
To qualify for the guarantee, a print campaign needs to reach approximately 125 million adults 18 years old and over an average of three times during a 12-month period, be it through ads in a single title or across a company’s entire portfolio of magazines. This assures that enough people see the print advertising to drive sales. Marketers also have to increase their business with individual publishers, in part to help cover the cost of providing measurement for the campaign.
In addition, the products being advertised have to be sold by retailers whose results are measured by third-party research firms such as Nielsen Catalina Solutions, which measures data from drugstores, grocery stores, supermarkets and mass merchants like Target Corp. TGT -0.06 % and Wal-Mart Stores Inc. WMT -0.18 %
One antitrust attorney, Michael Lindsay, a partner and co-chair of the antitrust practice at Dorsey & Whitney LLP, a national law firm based in Minneapolis, said the industry guarantee didn’t appear to violate antitrust law. The issue of an antitrust violation would only arise if there were an implicit or explicit agreement between the members of the magazine trade group that limited competition between them, he said.
Ms. Berner said that the trade organization’s members were free to offer any guarantee they chose.
Nielsen Catalina Solutions matches magazine subscriber data to shopper loyalty cards and then links them to anonymous households. The results are compared to a similar panel consisting of households not exposed to the ads to determine if sales were increased by exposure to the print ads.
“It’s about assuring a level of accountability,” said Adam Paulisick, senior vice president of marketing and strategy at Nielsen Catalina Solutions.
A number of magazine companies have tested guarantees in recent years. Time Inc., TIME -0.71 % for example, has offered a print ad sales guarantee across all its magazines since January, and says it has shown that on average every dollar invested in a print ad returns an uptick of $17 in sales.
Meredith Corp. MDP -0.80 % , which owns such publications as Shape, Family Circle, and Better Homes and Gardens, has offered its advertisers a print ad sales guarantee since 2011. Meredith said it has never had to provide a cash rebate or free advertising space to a marketer.
“There is a control group that receives our magazines, and a second group that doesn’t,” said Tom Harty, president of Meredith’s National Media Group. “We’re able to prove that the only reason that one group’s spending on specific products has increased is because it saw our print ads. That’s why this program is so interesting. It works.”




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