BREAKING NEWS & VIEWS
Metrics That Matter: Proving ROI to Magazine Advertisers
Friday, August 7, 2009
The magazine industry has long been criticized for being slow to respond to advertisers' demands for accountability metrics. And it's only fair that magazines are held to the same evaluation standards as other media—because advertisers are under increased pressure to show how every dollar spent delivers results. There have been years of study and discussion by, among others, the Magazine Publishers of America, along with a fair amount of debate about how magazines can better prove their advertising return on investment (ROI).
The good news is that the magazine industry now has the metrics needed to make this shift to selling on accountability possible.
Mediamark Research & Intelligence Inc. (MRI) started down the path of improving ROI metrics for magazines more than three years ago by devoting a significant part of our research-and-development efforts to producing issue-specific audience estimates, thus allowing magazine advertisers for the first time to gauge the reach of their specific magazine ad campaigns. Now, with three years of data from our Issue Specific Readership Study at hand, we have a much better understanding of audience variation from one issue of a magazine to the next, including the factors that make certain issues achieve a higher-than-average readership. No longer is the industry dependent upon a six-month average-issue audience number as the sole readership reach metric.
Going a step farther, MRI recently combined learning from MRI Starch, our national Survey of the American Consumer, and the Issue Specific Readership Study to take print return-on-investment measurement to a new level by producing AdMeasure, which calculates how many readers saw or took an action after seeing a specific ad in a specific magazine.
As marketers continue to try to determine which mix of media vehicles will produce the greatest ROI, publishers must make sure these advertisers know the different ways they can view ROI for their print campaign. Fact: What metric you use makes a difference in estimating ROI.
For instance, the chart below is based on a real-world 2008 print advertising schedule for a well-known financial services company. MRI looked at 21 of this advertiser's insertions spread across one bimonthly, three biweekly, three weekly and 14 monthly titles. The numbers show that, based on circulation, the advertiser paid on average an approximate $171 CPM (cost per thousand), one of the highest averages among the five different methods of measuring CPM. The lowest CPM—at a bit above $37—was derived using MRI's Issue Specific Readership Study, which of course takes into account the total audience for the issues in which this advertiser ran.
Using the new MRI AdMeasure calculation of the number of readers who report they saw the ad—a much more important ROI metric for most print advertisers—the ad campaign cost $61 for every thousand ad readers. Finally, using even the ultra fine-tuned AdMeasure assessment of how many readers took an action as the result of seeing the ad (such as visiting the advertiser's Web site or purchasing the product), the CPM was $193—more, but not much more, than the CPM based on circulation.
If this advertiser and/or its agency used circulation alone to gauge the cost of the magazine campaign, both would be doing a real disservice to the perceived value of magazines. Moreover, they would not get a true sense of the impact of their campaign, since they are arguably more interested in how many consumers took action as a result of seeing their ad than they are in knowing the number of copies the magazines distributed. AdMeasure metrics lessen advertisers' historic uncertainty about whether readers are seeing the ads within the pages of a given title.
Recognizing the importance of providing advertisers with true accountability measures for print spending, leading companies such as Time Inc. and Starcom USA have endorsed MRI's latest enhancements to magazine audience measurement. There is no equivalent measure to circulation in any other medium; buyers don't negotiate television advertising based on the number of households that own a TV, for instance. Moreover, other media have evolved their audience measurement techniques to produce ever more granular data that facilitate true ROI analyses. After 65 years of program-based ratings, for instance, TV recently moved to C3 commercial ratings.
The time is now for magazines to leverage ROI metrics that fully promote the medium's value to advertisers.
Kathi Love is president and CEO of Mediamark Research & Intelligence Inc.
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