What Are Advertisers Buying? Part 3: Why Circulation Matters
Here is part 3 of our ongoing series of white papers covering the disappearance of audits and reader service cards.
Our meetings with magazines and AIM’s own internal media analysis show that the percentage of circulation at B2B publications that is one-year qualified vanished (perhaps one of the reasons rep knowledge about circulation disappeared). A one-year qualification means that the magazine is annually contacting every reader to check whether those readers are still interested in receiving the publication and to update their contact information. The higher the percentage of one-year qualified circulation, the better from a return-on-investment point of view.
Direct response people know this; they actually pay for a premium for people who “purchased shoes” in the last three months than people who “purchased shoes in the last year.” If you are selling shoes, it’s a good thing. But if you are selling T-shirts, it may or may not be so good. The same logic applies (or did apply) to B2B circulations.
In the 1990s, for example, reps touted their qualified circulations; “one-year qualified” was the gold standard of readership list management. Savvy advertising agencies and media buyers shunned a publication if its circulation had a sizeable percentage of two- or three-year qualified names. A number of publications that we talked with during our exercise, however, showed three-year qualified names without even an explanation, which indicates that those readers are only being contacted every three years (for a BPA resource white paper on reading their status, go to this link: http://www.bpaww.com/bpaww. Plus, these publishers apparently didn’t think anything of presenting these names as the new normal. Indeed, one rep said that until he met with us, he had not been asked about an audit in the past five years! How valid is a list that hasn’t been maintained in three years? Between company mergers/acquisitions, layoffs, personnel moves and more, how many readers do you expect will still be at the same job at the same address and phone number after one year much less three years?
According to the U.S. Postal Service, a mailing list atrophies at the rate of 1% every week. In fact, 76% of the USPS Undeliverable-As-Addressed mail relates to individuals who have moved (for a handy fact sheet, download here). Imagine how much atrophy sets in after three years! If advertisers are buying ad space in a magazine based on a rapidly aging list, what are they really buying?
Prior to the electronic revolution, reps and publishers emphasized the quality of their circulations in their media sales presentations. With a BPA statement in hand, the rep would take the time to explain the composition of their audience and the importance of their circulation audits that supported their readership claims. Reps largely understood how their circulations were refreshed using ins/outs (number of qualified readers added and subtracted during an audit period), and they knew how their circulation compared to the competition.
Today, the percentage of one-year qualified circulations has slipped at magazines. Moreover, not one rep presented a BPA statement unless asked. One rep hadn’t even bothered to bring a statement along. The sales discussion has shifted over the years from a focus on quality circulation to razzle-dazzle presentations to promote cutting-edge or ancillary offerings such as webinars, social media sites, trade show sponsorships, and other spin-offs from their flagship properties.
Why do publication reps fail to present their BPA statements? Are they hiding something, lack of knowledge, or is it that advertisers have stopped demanding proof that a publication is reaching the audience they say they do? Are advertisers no longer interested in that information? Incredibly, several reps were confused when we simply asked — yes or no — whether their publication circulations were audited! Among those who could answer that question, not a single one could answer more advanced questions about what particular figures on their own magazines’ BPA statements meant, nor could they explain the basics of auditing processes. This demonstrated to us the monumental shift in how sales reps are positioning and selling their properties, as well as in what advertisers are asking to know. This disconnect, we believe, is at the core of the fundamental change going on in media purchasing today. Frankly, these media meetings indicate that BPA statements are moving toward irrelevance. After all, if no one asks for something, relevance disappears.
For more information on AIM or our sister companies, or for a complete set of our white papers on this topic, please fill our the form on our website, tell us a little bit about who you are, and we’ll send you the report. Thank you for spending some time with us.