By Paul DeBraccio, CEO, InteractiveRevenueCompany (Interevco.com)
With the recent articles in the ad trade about the imminent demise of magazines, newspapers, radio, etc., and the growth of the digital behemoth, publishers are scrambling to convert that lost revenue into digital impressions.
It isn’t going to work that way, folks.
Let’s assume that a given magazine lost 27 pages in 2008 and project a loss of an additional 12 pages in 2009. It may appear that there are efficiencies
in having the same sales team cover multiple media, but reality proves otherwise. This is a home run on paper but a strikeout in the game.
Traditional Media
Media planners create a media plan based on advertiser objectives. They buy magazines and sometimes newspapers while specialized buying groups buy other media such as spot & network TV, cable, radio and online. More often that not, these groups are at separate agencies. Of course these days the Digital Behemoth creeps into these plans in some way, such as sweepstakes Web sites promoted from traditional media and email addresses, etc.
Overall the buyers and planners focus on planning and buying traditional media.
There are sources of audience data, pricing, ratings, etc., that are used exclusively for media planning and buying. MRI and SMRB focus on demographics and behavior patterns of traditional media.
Digital Behemoth
I have been buying and primarily selling online media since 1996 and could not enumerate the various proposals, inventions, ideas and political battles the industry has seen in all those years about how online media has and will be bought.
There was talk about having TV, or cable TV, buyers buy online since it is more like broadcast than print. Then there was the idea that planners can add digital buying to their task lists.
Later, digital-only agencies flourished since traditional agencies did not want to be burdened with this new unimportant (read: low billings) media. They attempted to change the world. For years they were not taken seriously and the debate ensued ad nauseam among the early adopters in the business whether online would ever become a mass medium or a targeted medium or display medium.
As online usage grew to include mothers and fathers and grandparents, the big agencies embraced digital (or were forced to by their clients), and online buying groups emerged. With that acceptance came the syndicated audience data and pricing norms. Nielsen and comScore have become the de facto audience data standards, with CPMs becoming the currency of choice by the blue chips.
Since online media allows advertisers to retrieve performance data immediately, a few good behavioral targeting companies appeared to help increase ad performance. It took awhile, but after a few false starts this too is becoming de rigueur for publishers and desired by advertisers.
To add to the online buying tasks there are two primary RFP-type databases that the top agencies and publishers use as the conduit for proposals and screening sites that will receive the coveted big RFPs. MediaVisor and Atlas are the necessary banes of sales assistants and online media buyers across the land.
If by now you are noticing that those poor overworked online buyers have a lot to do on their to do lists, you are right. Most data from agencies and outside sources estimate that it takes 2.5 times more workforce to plan, buy and implement the Digital Behemoth than traditional media.
The dollars do not convert very well from traditional media to online, either. For example; LivingLife magazine charges $125,000 per page, and they have a Web site that generates about 50 million page views per month. If LivingLife wants to make up for lost pages by selling more advertisers onto LivingLife.com they would need to sell 25 million ad impressions per month for each ad page lost ($125,000/$5 Avg cpm=25M impressions).
It just does not compute.
However the Digital Behemoth can help to augment the core businesses of TV, magazine, newspapers, etc. Multimedia programs created by the traditional media companies will be attractive to most advertisers if they contain strategic digital components. Although many agencies have emerging media or online departments, the buys are still bought and implemented in the basic and efficient way they have always been.
I think publishers can take advantage of this by providing better offerings from their core businesses and augmenting them with digital opportunities.
Condé Nast’s digital reorganization seems to be a logical step. It frees the magazine publishers to focus on their core revenue generators.
The death of traditional media has been greatly exaggerated.
Please don’t repeat the PIB rate card data. Try and facture on the actual transitional price. I can’t speak to LivingLife’s discounting program but many/most titles are completely off rate card. The reduced range reported is sometimes as high as 50%.
Please use that kind of current math in your proposals of the future of the publishing business. I also found it “interesting” how the importance of real time digital data was completely glossed over, like it had no real value or interest to advertisers.
Sure let’s keep reporting our “pass-a-long” rates as verifiable real time data to advertisers. DUH!