This speech was given by Jedd Gould, of Mediabids, to the Suburban Newspaper Association and Southern Newspaper Publishers Association's Strategic Revenue Summit yesterday.

Advertiser's Expectations Have Changed, So Should You

10 years ago Mediabids launched and we have been doing per-response advertising in addition to our conventional online marketplace sales for the past 4 years.

I have been asked to speak a little bit about response-based advertising and there are specific methods that we have developed at Mediabids to handle the demand we have for per-response advertising in print. Not all of these may be right for your publication but here is how we do it:

-          We typically work with advertisers who are willing to pay for an unlimited amount of response.

-          Response is typically defined as a call, a web visit or a text.

-          Response based advertising is heavily reliant upon tracking of the response generated by an ad. At Mediabids we got into charging advertisers on a per response basis because we saw the need for tracking and better understanding the results that print ads were generating.  

-          Every ad that we place has a unique identifier, so we know what each publication is generating.

o   In 2009 we placed 66,350 per response ads for more than 500,000 total insertions.

o   Every single ad we placed had a unique phone number.

o    We then track using the data generated from 800 numbers to determine what a publication is owed.

o   Advertisers typically pay based on either a per-call or per-sale basis and the amounts vary depending on the type of product and the anticipated volume.

-          We give publications the choice of which advertisers they want to run, we resize the ad to their specifications, insert the unique phone number or url, upload it to the website where the publication can download it and then track the response.

-          As some of you may know, most 800#s are really transparent pass-throughs, allowing you to get the information on the caller and then point the call to wherever the advertiser wants the phone to ring.

-          Because we are not depending on the advertiser to provide us data on tracking, we know that the information we use to measure results and then pay publications is accurate.

 

Per-response advertising accounts for a small portion of what Mediabids does. We are primarily a marketplace for print in which advertising is bought and sold conventionally, in that advertisers pay for space.

 

However, what we have learned through per-response has influenced everything we do.

From what has gone on in the marketplace over the past 10 years, it is pretty clear that advertiser’s expectations have shifted faster than publications. However, despite what you may read or even hear at times at a conference like this, there is a lot of reason to be hopeful about the future because fundamentally print works. It is important to keep in mind that advertisers don’t love Google or Yahoo because they have some affinity to search based advertising. They spend billions with these two companies because they deliver measurable response.

At Mediabids we have about 17,000 advertisers who use our website to buy ads and in most cases they are spending more in print today than they did 10 years ago. They are not spending more because we are particularly good at selling (as evidenced by my dynamic speaking style), they are spending more because print delivers results and we can prove it.

Suggestion #1: If you are going to talk to advertisers about response you have to have confidence in your product.

Advertisers never tell publications that their advertising works. Your sales reps, people with years of experience, could probably count on one hand the number of times they have walked into an advertiser’s business or called them on the phone and had that advertiser tell them their ad was working well. The problem is that advertisers might be right, they might be wrong. But no one really knows. The tracking methods that advertisers use are weak. The person answering the phone who is supposed to remember to ask – how did you hear about us? Is not a tracking mechanism.  

This constant state of rejection and negotiation creates a type of institutional insecurity. The result is that many people who work at publications seem to have a sneaking suspicion that their product just does not work because, in most cases, that is what their advertisers are telling them- not showing them mind you, telling them.

If you are going to compete with products like Google and Yahoo, you have to believe your publication can generate results and work to make that happen. You have to understand your readers, their demographics and how that overlays on your advertisers’ products, goods or services.

Suggestion #2: acknowledge that advertisers have changed the rules

Google and Yahoo have let the genie out of the bottle. Advertising is no longer about a real estate style approach to a page  – getting an ad on a good page where people will see it – advertising for most companies is now about response, advertising for the sake of a brand is increasingly obsolete for large and small companies and everyday that goes by it becomes more obsolete. This is true in all mediums. Radio, television and the internet are all mediums which have adopted per-response based models and succeeded with them.

If print continues to suffer, it won’t be because of circulation or because publications cannot figure out a way to monetize content or their websites or deliver the product electronically in a compelling way. If print continues to decline it will be because publications still think they are selling real estate in an age when no one wants to buy. Google and Yahoo do not sell real estate, they sell response and results. Selling space against response to a group of advertisers who do not know how to track their own response is a very difficult thing to do.

I am not suggesting that per response is the only hope, in the sense that advertisers should only pay for the response that is generated. Advertisers have changed the rules, because they have changed their expectations.

Whether you use a per call, per sale or charge for space in a conventional manner, you are selling space to advertisers who now care more about the response they are generating than the benefits of branding. Every time someone buys an ad, there is an expectation of response and, unfortunately, most publications don’t have the tools in place to show advertisers how their ads are working.  When advertising works and you can prove it, how you charge is irrelevant. The method of the monetization is academic.

Suggestion #3: Own your data

If publications are going to thrive in the future they must take ownership of the results generated by their product. This is the biggest difference between newspapers and online offerings like Google and Yahoo.

Compare for a moment two mediums - online and print:

With Google’s Adwords an advertiser has real time access to how much money they have spent, how many clicks they have generated and with a simple software install, how many sales the clicks have resulted in. A quick calculation can determine definitively whether those ads are paying for themselves.

Now think about what an advertiser in a daily newspaper does to try to figure out how an ad is working.  A shocking number of advertisers, who are incredibly sophisticated in measuring other mediums, depend on the same devices that were available to them in the 1950s – coupons…  or worse, asking the customer why they called. If you have ever had the misfortune to listen to phone calls, you know that the average American consumer either is uncomfortable answering this question or has an astonishingly short memory, because few people know. In fact, an advertiser we work with did a test where they asked their operator to give the caller 5 choices of where an advertiser heard about a print ad– 4 real publications where their ad appeared and 1 completely fictitious publication. The fake publication outperformed 2 of the real ones.

Advertisers need to be provided the tools to understand how their ads are performing, regardless of whether they are paying per-response, per-sale, or for space.

Tracking for print should not be something left to the advertiser.

1)      Data is valuable. It can be used in so many ways.

2)      Conventional ad selling is, in large part, a negotiation and data is a very compelling selling tool.

3)      Advertisers are bad at collecting this response data themselves and should not be entrusted with this job. Left to their own devices they rarely track results effectively. Mediabids works with more than 17,000 advertisers and there might be 1% who track effectively on their own.

The problem is that when advertisers don’t track, they suspect the worst. We see this first hand – I started Mediabids 10 years ago because I wanted to figure out a way to sell print ads using the tools available through the internet. Thousands of advertisers use our site to buy print ads and four years ago we started to look into why many of these advertisers were increasing their budgets online and decreasing them in print.

The answer was very clear. Our advertisers were not making any effort to track on their own, we were not providing them with any tools and therefore most of the objections to spending we heard centered around the “my  ad is not working” argument. Nothing to back it up, no data, no proof – just a gut feel, the ad isn’t working.

Mediabids got into per-response advertising because we got into tracking.

Like everyone in this room, at Mediabids we knew- on some level - that print worked but we didn’t have any data, we couldn’t back it up, we were as insecure as our publication clients about results. The problem was.. that we really didn’t have a choice – we were really already selling response based advertising without any way of validating the response.

I say that we were selling response based advertising because that is what our advertisers thought they were buying – we were just doing a bad job selling. Because we were selling space, not results. Advertisers were spending money- paying for space - with little concern on our part (Mediabids) or the publicaations’ about the response that was being generated.

Today we track everything in both response-based ads and conventional ads.

What we have learned presents a much different picture than what you have heard about print recently. Here are a few common denominators of the results across advertisers:

-          Print is working

-          The leads generated by print are almost always more valuable than any other medium. More valuable than radio, television or the internet.

-          The ROI of print is almost always higher than other mediums.

-          The close rate on leads generated by print is better than other mediums.

-          The customer retention rate is better: The customers acquired via print tend to be better educated about the products they are buying and therefore are longer-lasting customers.

But Mediabids’ advertisers only know this because we show them and showing them has been worthwhile. In 2009 our revenue nearly tripled after doubling in 2008. Most of our advertisers, who represent a wide cross-section of business types and geographical focuses, spend more today on print than they did 10 years ago because we can show them it works.

Please know, I am happy to get into greater detail of the mechanics of how this is done later.

As I said earlier, Google and Yahoo let the genie out of the bottle and recalibrated advertisers’ expectations but that does not mean that print cannot adapt and succeed by incorporating some basic tracking and measurement devices. In some cases that may lead to a per-response deal. In other cases, a conventional ad sale. But in all cases, we have found at Mediabids, the more data a company has on the response generated by its ad, the more likely they are to feel like their money is being spent wisely.

 

From MIN: 

As part of its new promotion of magazines to consumers and advertisers alike, the ‘Power of Print’ campaign launched a video into the YouTube ecosystem yesterday. The lions (and lionesses) of print—Time Inc. CEO Ann Moore, Condé Nast president and CEO Charles Townsend, Wenner Media chairman Jann Wenner, Hearst Magazines president Cathie Black and Meredith National Media Group president Jack Griffin—all mock the bloggers and pundits who have declared the death of print at the hands of the Internet.

“What actually happens is that people find room in their lives for the new medium alongside the media they already love,” says Moore. This will continue as long as the old media continue to provide “an irreplaceable value,” adds Townsend.

Watch it here . The video is part of the multititle in-print push to defend and promote the enduring value of magazines. The campaign will appear across thousands of ad pages in scores of titles in coming months.

The YouTube video has been viewed just over 3,100 times as of this morning.

By The Associated Press (AP) – Feb 8, 2010

Average single-copy sales at newsstands and other retail sites for leading U.S. consumer magazines during the second half of 2009, among magazines that reported totals to the Audit Bureau of Circulations:

1. Cosmopolitan — 1,753,368 (down 1.4 percent)

2. People — 1,325,330 (down 10 percent)

3. Woman's World — 1,168,958 (down 4.9 percent)

4. First — 1,041,011 (down 6.4 percent)

5. Us Weekly — 812,089 (up 1.9 percent)

6. In Touch Weekly — 746,973 (down 10.5 percent)

7. Family Circle — 715,000 (down 9.4 percent)

8. In Style — 689,705 (down 6.8 percent)

9. O, the Oprah Magazine — 662,304 (up 5.8 percent)

10. Glamour — 587,677 (down 4 percent)

11. Lindy's Football Annuals — 580,509 (down 5.8 percent)

12. Star — 574,927 (down 6.8 percent)

13. National Enquirer — 562,292 (down 9.3 percent)

14. People Stylewatch — 536,934 (up 1.9 percent)

15. Woman's Day — 469,068 (down 7.2 percent)

16. Life & Style Weekly — 461,958 (virtually unchanged)

17. Men's Health — 438,238 (down 13.8 percent)

18. All You — 432,801 (down 1 percent)

19. Vanity Fair — 421,833 (up 5.1 percent)

20. Real Simple — 411,705 (up 6.2 percent)

21. OK! Weekly — 404,423 (down 17.5 percent)

22. Good Housekeeping — 395,289 (down 30.7 percent)

23. Seventeen — 392,262 (up 0.1 percent)

24. Every Day with Rachael Ray — 367,744 (down 3 percent)

25. Weight Watchers — 364,396 (down 2.1 percent)

Source: Audit Bureau of Circulations

Before you get too excited about this report from MediaPost, read the very last paragraph. Full story here Bargain Hunters Start With Newspaper and Magazine Ads

by Jack Loechner, 2 hours ago

According to a recent Adweek Media/ Harris Poll, 23% of adult Americans believe that newspaper and magazine advertisements are where they can find the best bargains. 18% believe online advertisements are most likely to help them find the best bargains. 10% say direct mail and 12% catalogs, 11% television commercials, and just 2% say radio. And, 34% of Americans believe the type of ad makes no difference when they are looking for the best bargain. When looking for the best bargains, different age groups have different ideas of where to look: 18-34 year olds are more likely to say online ads (22%) and television commercials (17%) are the best places to go 35-44 year olds go online (26%) 24% of those 44-54 and 33% of those 55 and older say newspaper and magazine advertisements those are media most likely to help them find the best bargain Advertising Most Likely to Help Find Bargain - Age (Base: All U.S. adults; % of Category Respondents)   Age   Total 18-34 35-44 45-54 55+ Newspaper/Magazine advertisements 23% 15% 16% 24% 33% Online advertisements 18 22 26 17 12 Direct mail and catalogs 12 13 13 14 10 Television commercials 11 17 12 8 7 Radio 2 2 3 < .5 1 None- the type of ad makes no difference 34 31 31 36 36 Source: Harris Polls, January 2010 Among the genders, women are more likely than men to say newspaper and magazine advertisements, and direct mail and catalogs are more likely to help them find a bargain. Men, on the other hand, are more likely to say online advertisements are more likely to help them find a bargain. There is also an interesting educational difference in the media people believe can help them find the best bargains: One-quarter of those with a high school education or less say newspaper and magazine advertisements are more likely to help them find a bargain, compared to 20% of those with at least a college degree. 29% with at least a college degree believe online advertisements are more likely to help them find a bargain compared to 12% of those with a high school education or less Advertising Most Likely to Help Find Bargain - Gender & Education (Base: All U.S. adults; % of Category Respondents)     Gender Education   Total Men Women HS or less Some college College grad Newspaper/Magazine advertisements 23% 22% 24% 25% 23% 20% Online advertisements 18 21 16 12 18 29 Direct mail and catalogs 12 11 14 12 12 12 Television commercials 11 12 10 12 12 8 Radio 2 2 1 3 1 1 None- the type of ad makes no difference 34 32 35 36 33 31 Source: Harris Polls, January 2010 The report concludes that, while newspaper ads are still slightly ahead of others among all adults when it comes to bargain hunting, online is not far behind. And, online ads lead newspaper and magazine ads, as a source of information about bargains, among younger, better educated consumers, who are much more attractive to most advertisers.

Interesting blog (Reflections of a Newsosaur) on how newspapers can capitalize on the expected popularity of the IPad. Full story here

Excerpt: 

How media can profit from new iPad

While it may be difficult for Apple’s new iPad to live up to the hype that accompanied its release today, there can be no doubt that this slick new device has raised the bar for interactive content delivery.

Unfortunately, as discussed previously here, most media companies already are late in developing editorial and advertising strategies to meet this new challenge.

 Significantly, publishers and broadcasters should be single-mindedly focused on finding ways to charge (checklist at left) for all the exciting new content, services and advertising opportunities that will be enabled by the ’Pad and the imitators that follow.

 

Meredith and Hearst are taking two of their online properties to print. As web-based advertising becomes more and more fractured will this be a growing trend?

From Mediaweek. Read full story here

Excerpt from the story-

Is reverse publishing becoming a growing trend for magazines? Normally, magazines launch Web sites from print brands. But Hearst is going in the opposite direction with the launch of Light & Delish, a bookazine based on content from Delish, a food site it launched in 2008 with MSN.

Meredith, meanwhile, is moving forward with a magazine it tested last year based on Mixing Bowl, an online social network it built around food. Meredith published a second issue of Mixing Bowl.com magazine last week and plans to do another this year while exploring other such affinity-based titles.

In Hearst’s case, Light & Delish will hit stores Feb. 2 with a distribution of 300,000. Priced at a $9.99 cover price, the bookazine is meant to be consumer driven, although it will carry three paid ads from Kraft, which was a launch sponsor of Delish.

Light & Delish is one of several bookazines the company plans to create this year as it looks for low-cost ways to serve up new revenue. Hearst published three bookazines in 2009, based on Good Housekeeping and Country Living, and expects to do at least four this year based on its existing magazines and Web-only brands, which include RealBeauty.com, RealAge.com and Kaboodle.com. Hearst also hopes to turn Light & Delish into a series.

At a time when it’s hard to whip up excitement for magazine advertising, it’s fitting that Hearst sees print as a way to feed its online growth rather than the other way around. Just a year after launch, Delish ranked No. 9 among food sites with 3.6 million unique visitors in December 2009, per Nielsen Online, and the company is eager to fuel that growth.

Meanwhile, Hearst saw double-digit ad-page declines last year across its magazines like O, the Oprah Magazine; Harper’s Bazaar; and Cosmopolitan. The bookazine also is seen as a way to promote Hearst’s other brands like Good Housekeeping and Country Living, where many of the publication’s recipes come from.