iewPoint | Volume 2 | Number 1 | January 2006
A forum for news about Verified and the business in which we thrive.

This Month's Features:
Magazine Readers Love Ads
Newspapers to Prove Claims of Effectiveness
Free Dailies Don't Cannibalize Their Paid Counterparts
Events Calendar
Price Paid Not an Indicator of Reader Value
Guide to Your Audit: Target (Bulk) Distribution


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Magazine Readers Love Ads

In a recent speech , Jack Klinger, MPA Chairman and President-CEO of Hachette Filipacchi Media US said, "Magazines are not plagued by TiVo or zapping problems, which have lead to TV commercial avoidance. Not only do magazines not have an audience-avoidance problem, but quite the opposite is true." Klinger cited numerous studies that show magazine readers actually welcome advertising in print and view it as part of their reading rather than an interruption.

At the ANA Print Forum in June 2005, Erwin Ephron said that magazine engagement metrics are built on two factors: relevance and control.

When readers are in control, advertising intrudes more gently. When print ads are of interest, readers read them. When ads aren't of interest, they turn the page. Readers don't, however, click to a different magazine.

Print also offers greater relevance of the ads they run. If magazines target the right readers and advertisers choose the appropriate magazine, relevance increases significantly. "This is different from the TV model, where many ads are not relevant to most viewers. Few need Cialis or the patch, drink Grey Goose, plan to refinance a mortgage, eat at Subway, or use Serenity Fresh Pads," said Ephron.

It could even be stated that advertising is part of the pleasure of magazine reading. Dr. Scott McDonald of Condé Nast said as much in a study on the topic. In his conclusion, he wrote:
"If a reader doesn't fancy an ad, he or she can skip it easily because the reader is always in control. Thus, though this study does not prove it directly, it reinforces our sense that greater reader engagement in a magazine is associated with greater receptivity to the advertising in that magazine. Magazine advertising does not fight against the medium in which it is found, does not interrupt the flow, and does not reduce the reader's sense of control over the magazine experience."





Newspapers to Prove Claims of Effectiveness

USA Today and The Dallas Morning News, along with the Newspaper Association of America (NAA), are developing programs that can help put hard data behind a newspaper's claims of effectiveness.

USA Today has introduced a unique, research-based program in which advertisers can get customized information on the performance of their ads. The program is still in its early stages.

"Advertisers have been demanding more accountability and transparency," says Susan Lavington, Vice President of Consumer Marketing at USA Today. "This was our solution."

The Dallas Morning News is developing a similar program through the use of a third-party software product from Sweden's Infodata called Research and Analysis of Media (RAM).

The paper has run ads in the Morning News and on its Web site asking readers to participate in the research. Since May, the paper has created three groups of 350 people each. Each week at least two groups are asked to evaluate ads using e-mail, says Leigh Straughn, the newspaper's Director of Advertising Communications and Strategy. The survey includes questions such as, "Was the brand recognized and the ad easy to understand?"

Currently, the Morning News is just gathering data internally, but progress is ongoing. "We are now starting to go out and start conversations with advertisers," said Straughn.

The NAA is also in the initial stages of developing several programs on newspaper effectiveness. Additionally, the organization is getting involved in a way to standardize metrics to determine an ad's ROI.

USA Today's Lavington thinks the program will only strengthen relationships. "If an ad is not working, the advertiser will figure it out one way or another. We would rather be a partner with them," she says.




Free Dailies Don't Cannibalize Their Paid Counterparts

Free dailies can offer publishers targeted opportunities to reach new and existing advertisers, as well as new and hard-to-reach readers. However, the emergence of the free daily newspaper over the last three years has not created as major an impact as some newspapers expected. This conclusion comes from a recent readership study by Project for Excellence in Journalism and the New York Times. The study made four main conclusions:

Free papers don't cannibalize paid papers.
While free dailies have gained readership, the levels of the paid dailies studied did not suffer as a result. Researchers found that readers weren't choosing papers by price—so free papers don't have a perceived cost-savings benefit.

Readers of free dailies closely resemble paid newspaper readers.
Compared to paid newspaper readers, people who read free papers were generally younger and more ethnically diverse. They are from households with somewhat lower incomes. However, the difference in education levels isn't significant. The study suggests that free dailies may be a way for publishers to step into the desirable younger demographic, but the change in readership demographics is not as dramatic as originally expected it might be.

Free daily distribution methods have a major impact on readership.
Many of the free dailies were distributed at major transportation hubs. The research suggests that the readership is based more on the transportation behaviors of readers than pricing or other demographic factors.

Readers of free papers are very likely to be reading paid papers already.
The study found high levels of free-to-paid duplication. In addition, free readers were more likely to buy more than one paper when available.




Events Calendar

Alliance of Area Business Publications 2006 Winter Conference
Verified in attendance!
January 27–29, 2006
Presidente InterContinental Resort, Puerto Vallarta, Mexico
www.bizpubs.org

John Lowman, Director of Sales for Verified, will be attending the AABP 2006 Winter Conference. John would be happy to answer any of your questions and talk about the valuable services Verified provides.

New England Press Association Convention and Trade Show
February 10–11, 2006
Park Plaza Hotel, Boston, MA
www.nenews.org

Western Publications Association Maggie Awards
Entries Deadline: January 5, 2006
February 28–March 1, 2006 (Judging)
Westin Hotel at Los Angeles Airport, Los Angeles, CA
www.wpa-online.org

Parenting Publications of America 2006 Convention
March 2–4, 2006
Westin Philadelphia, Philadelphia, PA
www.parentingpublications.org
Relocated from New Orleans due to Hurricane Katrina

Southeastern Advertising Publishers Association Spring Conference
March 3–4, 2006
Gaylord Opryland Hotel, Nashville, TN
www.sapatoday.com

NAA Small-Market Newspaper Regional Symposium
March 16, 2006
Hilton Phoenix Airport, Phoenix, AZ
www.naa.org

Print Media Conference & Expo
March 20–22, 2006
Hilton New York, New York, NY
www.printmediaexpo.com

America East Newspaper Operations and Technology Conference
March 27–29, 2006
The Hershey Lodge and Convention Center, Hershey, PA
www.america-east.com

FOLIO: 2nd Annual Publishing Summit
March 28–29, 2006
Westin Michigan Avenue, Chicago, IL
www.foliosummit.com

2006 National Association of Hispanic Publications Convention & Expo
March 29–April 2, 2006
Hilton Las Vegas, Las Vegas, NV
www.nahp.org

Ontario Community Newspaper Association 2006 Spring Convention
March 31–April 1, 2006
Toronto Airport Renaissance Hotel, Toronto, Ontario
www.ocna.org

NEXPO 06
April 1–4, 2006
McCormick Place Complex, Chicago, IL
www.nexpo.com

Newspaper Association of America 2006 Annual Convention
April 2–4, 2006
Fairmont Chicago, Chicago, IL
www.naa.org

American Society of Newspaper Editors Annual Convention
April 25–28, 2006
Westin Hotel, Seattle, WA
www.asne.org

Cal Western Circulation Managers Association 2006 Sales Conference
April 26–28, 2006
El Dorado Hotel, Las Vegas, NV
www.cwcma.com




Price Paid Not an Indicator of Reader Value

In recent years, approximately 24% of magazine reading is done in public places, up from 14% over the last decade. That represents about one in four magazine readers.

Ongoing research suggests that what is important is how the reader reads the magazine, not how they obtained the copy or the price they paid. There is little difference in the subscriber characteristics or reader involvement. Magazine readers don't draw the distinction between paid and non-paid, and that's what really counts.

John Lavine, Director of the Media Management Center for Northwestern University, has found that people react in similar ways to advertising regardless of whether they pay for a magazine or if they get a free copy. The relative likelihood of readers to buy or to have influenced purchase behavior based on whether they bought a subscription, purchased at the newsstand or read in public place does not predict the reader's probability of purchasing a product. Public place readers are as likely to be buyers as magazine subscribers.

Readers per copy (RPC) for public place provides advertisers additional exposure. They typically generate many more readers per copy than paid sources. The MPA reports that a magazine sold at a newsstand will generate four readers per copy, while a public place copy attracts as many as thirty.

TargetCast's Audrey Siegel says, "The most valuable reader is the person who actively sought out the publication. That doesn't mean they paid for it, but that person actively chose to engage, not just picked it up because it was there. A magazine reader is intimately involved with the edit and the ads."

Rebecca McPheters, a media research consultant, has developed an online survey audience measurement tool called readership.com. "We think the major ad value lies with audience," said McPheters. "That's how all other nonprint media are evaluated. Print is disadvantaged because publishers don't have the [readership] data to be as accountable as electronic media. We're trying to level the playing field."

How many readers per copy and how engaged they are is a more important measurement of reader value than where they pick it up. She doesn't believe that the price consumers pay for their magazines predicts their quality as a reader.

Said McPheters, "Good public place distribution reaches enough readers per copy so that regardless of how narrow the [advertiser's] target group, more of that target is reached than with a subscription or newsstand copy."

"Bulk is no longer an issue. Public place is what it's about," says Dan Capell of Capell Associates. "Advertisers should be saying, 'The more public place the better.' This circulation has value and it's cheaper than going out and buying 50,000 direct mail orders."

Ultimately, circulators and advertisers have the same goal: Capture the attention of as many readers in their targeted demographic as possible.




Guide to Your Audit: Target (Bulk) Distribution

Verified defines Target (Bulk) distribution as delivery of five or more non-addressed copies to a single location that are available to the public at no charge.

For the audit, please provide an issue summary report of drops and returns by location. Original, complete, and accurate sets of route lists should be retained for each issue. Route lists should include name and address of drop location (including ZIP/Postal Code), notations for returns, closed locations, and adjustments, and other points of reference.

For in-house Target distribution, please provide payroll worksheets showing information such as total deliveries for each pay period, adjustments, mileage, bonuses, and proof of payment (e.g., copies of canceled checks, bank statements, EFTs) to the drivers. We will request detailed payment information for a sample number of drivers during the audit.

For a contract distributor, please provide original invoices and documents establishing proof of payment for distribution (such as copies of canceled checks, bank statements, and credit card receipts). Invoices should indicate the total number of copies actually distributed (not just received) by the distributor.

It is important that returns are tracked on every route, at every location and for every issue. If locations are closed at the time of delivery, it should be noted on the route list. Verified recommends that a separate trip be made to collect returns in this situation. If this is not possible, the average return rate for locations where returns are tracked must be applied to closed locations (preferred method) or a flat 10% return rate applied to the closed locations. This return adjustment should be noted on the route list and reflected in numbers reported on the QPD.

If a driver fails to return their route list, the above rule applies and estimates should be made for returns. Every attempt to collect all route lists should be made. The average return rate on the route from previous issues should be applied. Please make note of the missing route list and the estimated returns should be reflected in the numbers reported on the QPD.

Verified reports net Target distribution (gross less returns) on your Audit Report and Publisher's Statements. Complete and accurate driver records make easier reporting on the QPD and helps you successfully manage your distribution. If you have questions, please contact Verified at (415) 461-6006.



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