By Rebecca McPheters
Media Industry Newsletter
December 15, 2008
In our industry’s own variant of the movie Groundhog Day, distribution of magazines to public places seems destined to remain an issue which rears its head each year during planning season. Advertisers declare an unwillingness to pay for public place copies in excess of X – where X is typically 5%. Publishers push back to negotiate the best deals that they can, armed with an extensive array of information documenting public place quality – much of it supplied by our company. Unfortunately, to minimize the scope of the argument, many publishers have acceded to advertiser preference by reducing the copies they distribute to public places. The irony is that not only does reduced distribution to public places result in a disproportionate diminution in the value realized by advertisers, but for all but the largest magazines, 5% of distribution to public places is often not enough.
The simple truth is that for most publications, the copies which provide the greatest value for advertisers – in terms of delivering their messages to responsive and engaged audiences – are public place copies. It is ironic that many advertisers feel that they should pay less or not at all for those copies which contribute disproportionately to their ability to meet their goals – whether they measure response in terms of sales or other objectives like awareness or purchase intent. In a more rational industry, publishers would be able to command higher prices for these copies because of their dramatic impact on the underlying value proposition.
Another truth is that there are a finite number of public place outlets. We estimate the number at about a million. This includes approximately 240,000 doctors’ offices, 225,000 beauty parlors, 110,000 dentists’ offices, 30,000 barber shops and 25,000 gyms and health clubs, as well as a variety of other less frequently used locations. Whether a magazine’s public place distribution is truly excessive is more a function of the number of appropriate outlets available than the % of its distribution. The number shrinks when you start qualifying outlets in terms of their suitability for an individual title, but not as much as you might expect. The fact of the matter is that regardless of the type of outlet, most public place venues skew upscale.
For a magazine with a total circulation of a million, 5% – or 50,000 copies – often will not begin to cover the range of appropriate outlets available. We estimate that the average copy distributed to a public place generates 30 readers, while the average subscription copy generates about 4 readers. As a result, were the publisher to shift 50,000 copies from his least desirable subscription source to public place distribution, the public place copies could be expected to generate 1.5 million readers of which fully 1.3 million would be incremental.
Our recent AudienceLab™ Study of Public Place Engagement found that public place readers are not significantly different from other readers in terms of demography or engagement with the publications they read. The study found that readers seek out their favorite titles in public places and that over a third of readers actually prefer public place reading to reading at home. Given similar levels of engagement and demographic quality, rational advertisers should have a strong preference for an audience of 1.5MM to one of only 200,000.
