A copy is a copy is a copy...or is it?

For those of us who have accepted as holy writ that paid, subscriber copies are the gold standard for this business, there are now some fairly heavy duty voices that aim to knock us out of our complacency.

Take for instance this startling article by consultant Rebecca McPheters in the October 10 Media Industry Newsletter (subscription required). It argues that advertisers (and, by extension, publishers) should pay less attention to the methodology of distribution and more to whether the magazine actually gets the readers editors and advertisers want. (This is part of the larger argument about ROI and also relates to the value of public place copies.) I have boldfaced a couple of thought-provoking passages.

It’s Time to Call A Copy A Copy…

by Rebecca McPheters
Media Industry Newsletter
October 10, 2005

After weeks of waiting for the other shoe to drop, it would seem that the contents of an entire shoe store have now been dumped at the doorstep of the publishing industry – all because of arcane and rapidly changing criteria about what differentiates “paid” from unpaid subscriptions. It’s time to stop the insanity and call a copy a copy. Why should advertisers care about whether a copy is paid or unpaid, much less how much was paid for it, or who paid for it - if the copy delivers engaged readers who are appropriate targets for their ads? And why should publishers waste time, energy, and huge sums of money to document and manage to these metrics that are unrelated to the value offered by their publications?

The value magazines offer advertisers – just like the value offered by television, radio, the internet, et al – is in their audiences. Consequently, if advertisers are going to be concerned with issues relating to magazine distribution, their concern should be whether or not copies get into the hands of consumers. Audience data will provide the information needed on how many consumers and which consumers actually read the publication. The concept of paid circulation is no longer relevant and is causing a huge misallocation of resources in an industry with plenty of other problems that should be more pressing. Advertisers don’t negotiate television based on the number of TV sets or the amount viewers pay for programming. Internet advertising is not evaluated based on the number of computers or how much users are paying for the content.

All too often, advertisers are using current circulation metrics to negotiate prices downward, irrespective of the advertising value being offered. Shame on us for allowing this to occur! Shame on them for offering incentives for publishers to reduce the value they deliver to advertisers. As a result, publishers now find it almost impossible to realize price increases commensurate with either increases in cost or improvements in audience delivery. In the last 6 years, the number of readers-per-copy (RPC) across our industry has increased by a whopping 20%. This represents an enormous increase in the value provided to advertisers. Nonetheless, publishers have yet to reap any discernible benefit from this trend.

The concept of paid circulation is a costly anachronism that we can no longer afford. Just as it distracts publishers from more appropriate concerns, it similarly distracts print buyers. A truly horrific example of this can be seen in the debate currently raging about the value of public place copies – almost surely a major contributor to the industry-wide increases in RPC. When used appropriately, public place copies can generate as many as 50 readers per copy, in contrast to 4 or less for a typical individually served subscription copy. Even allowing for differences in composition, copies generating 50 readers can be counted on to produce several times as many readers in virtually any target group as a single subscription copy.

Similarly irrational perspectives are being applied to discrete categories of subscriptions that in many cases can be shown to provide readers substantially more desirable than the average. A recent analysis that we have undertaken for Synapse, a leading marketer of magazine subscriptions, has shown that their CAPS, partnership and sponsored programs – all now requiring special disclosure on ABC statements – generate readers who are substantially more affluent, better educated and more likely to be in professional or managerial occupations than average readers. Furthermore, these readers also score well on involvement measures.

Editorial resonance and distribution practices are the key drivers of audience. Indeed, if an editor loses touch with the intended audience or if a magazine is distributed in such a way that it fails to reach readers, these things should and do show up in measured audience. The key to whether distribution is valuable hinges upon whether it ends up in the hands of consumers, generating readership among individuals who are targets of the magazine’s advertisers. A better question than whether an individual has paid for a copy or how much they paid is whether that copy was in fact distributed in such a way that it reached readers. A system of reporting net copies distributed would be more meaningful than one based on paid circulation. In any case, it is measured audience that will provide the ultimate test of whether a publisher’s distribution practices are indeed appropriate.