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July-Dec 2015 ABCs: a media buyer’s view

With many publications experiencing circulation decline, how valuable is circulation analysis to the industry and, asks Jamie Higginson, what metrics should advertisers and agencies be considering when making investment decisions?

By Jamie Higginson

Shall we go to the pub? After the latest set of ABC figures, many publishers will have headed off to their local, some celebrating a growth in circulation, but most more likely drowning their sorrows following a circulation decline that has become the norm in consumer magazines. They might have to walk a bit further to find such an establishment though, as in recent times, the local pub has seen a decline which has many parallels with the magazine industry.

Importantly, both have seen a cultural shift resulting in much less usage (of their traditional forms) by consumers. This has meant a fall in revenues, which combined with rising operating costs (rent and brewery vs paper and content), has led to numerous closures. For every disgruntled regular bemoaning their favourite boozer turning into luxury apartments, there is an upset reader disappointed they will no longer receive a copy of Company, Nuts or FHM.

A more positive similarity though is the sense of belonging and so the feeling of endearment that both engender with their consumers. We visit both to get away from the world for an uninterrupted period of ‘me time’, that allows us to engage deeply with others (either our friends or the writers of each feature) in an environment we enjoy. These conditions create a unique mindset that is extremely difficult to replicate, where we are open and positively engaged.

This unique relationship and the associated mindset do not change because less people are visiting, nor because other places that we do not visit (be they pubs or magazines) close. In short, a declining market does not affect the remaining consumers’ relationship with a product. This is important for publishers given it is this proven relationship (and mindset) that advertisers have historically invested into with magazines and still want to exploit.

In this context, our current focus on scale as a form of measurement is rather odd. The industry macro-view of declining circulations as a rationale to reduce magazine investment is understandable, yet flawed. If we continue to nearly exclusively consider circulation as a barometer and make advertising investment decisions accordingly, the future of magazines is definitely ‘glass half empty’.

Single Measures

On traditional circulation measurement, the latest results bear out what most of the industry have known for some time. Yes, we should disregard the sensationalist headlines and the exaggerated reports of the ‘death’ of print. It would be remiss though, not to acknowledge that printed magazines are in decline. This is once again evident in this most recent ABC report.

We see a familiar trend from previous ABC releases of printed edition circulation decline, which in some markets is ameliorated by digital editions but never reversed: Celebrity & Fashion Weeklies -13.5% print circulation (-13.4% print & digital editions combined circulation); Fashion & Luxury Monthlies -5.7% (-5.5%); Traditional & Real Life Weeklies -9.4% (-9.4%); TV Weeklies – 4.8% (-4.8%); Home & Gardening -5.0% (-5.0%); Grey Sector -11.8% (-11.8%); Motoring -3.3% (-2.1%); Men’s Magazines -9.7% (-7.7%); Teen & Pre-Teen -1.5% (-1.5%); and Sport -1.0% (-0.9%).

As ever, there are exceptions; for example, the News & Business sector saw printed editions rise by +2.1%. With quality opinion or commentary less readily available for free on digital platforms, publishers in this market have been able to capitalise on the demand created. This is not to say digital platforms are not utilised, quite the opposite. When print and digital editions are considered, this sector’s growth increases to +7.1%, with notable contributions from The Spectator and The Economist who won at Cannes for their smart use of real time data in driving circulation.

The Food & Travel market has been buoyed by debut ABC figures for both Foodism (109,296) and Escapism (101,749), the Square Up Media duo driving a +4.9% sector increase. Meanwhile, Women’s Monthlies experienced a print circulation increase of +3.3%, almost exclusively propelled by the performance of Cosmopolitan with a huge 45.1% growth. A significantly reduced cover price (£1) from the October issue is the major factor. The growth is even stronger if you consider ‘total’ circulation which would include the approximate 100,000 copies which are distributed free of charge each month (at shopping centres, gyms, salons, festivals and universities), as part of Cosmo’s ‘pick up and pop up’ programme. Given their success, this ‘hybrid’ model between traditional newsstand and free distribution should be considered by more publishers.

Indeed cover price (or lack of) and distribution points are key to success throughout the figures, with free distribution publications all seeing positive results. Stylist, ShortList, Time Out and Sport all increased in circulation over this period, while Dennis launched new ‘freemium’ title Coach (who will not debut an ABC result until the next release). Emma’s Diary Pregnancy Guide (403,300) pushed the Baby & Parenting market into a +1.0% (+1.1%) growth, while the Film & Music sector increased +91.5% (+87.6%) with NME moving to a free model and delivering a 306,590 new circulation figure.

It is fair to say then, with a few noteworthy exceptions, most publications are in steady circulation decline and that only the free-distribution model is maintaining positive ABC results. There is no evidence this trend will do anything but continue, so how should publishers deal with this decline?

Pub Food For Thought

As with many industries, the prevailing wisdom for threatened traditional products has been to diversify its offering and embrace future trends. Moving back to our pub trade analogy, landlords have had to adapt their offering to keep customers coming through the door. The 25 year gastropub paradigm, where we could enjoy breakfast and coffee in our local pub now seems to be ending as we move into a new ‘craft’ beer revolution. In magazines, diversification largely comes in one form: digital.

We have learnt from mobile, that ‘The Year Of …’ does not exist. It does feel though that we have reached an unprecedented point that is seeing publishing (rather than print) come to the fore. This is not just digital editions which only account for 1.7% of total combined circulations, but all aspects of digital platforms, apps and devices. Even the most traditional print publisher is now operating as a multi-channel brand, the data is becoming stronger (eg. the formation of PAMCo), publishing bodies are adopting a channel-neutral approach (eg. Magnetic), and agencies are skilled enough to deliver multi-platform publishing recommendations at a supplier level.

Additionally, publishers are agreeing ever closer partnerships with technology companies. Snapchat’s Discover platform will enable you to access content from Cosmopolitan, National Geographic or Vice, while a host of traditional print publishers have struck a deal with Apple News available on iOS9. While these content distribution channels may not be ideal environments, they do give publishers huge reach and importantly access to younger demographics.

The utilisation of digital technology is key as it allows personalisation, which enables businesses to thrive on knowing their audience well (through data) and so serving them the right content. This is the entire concept of entities such as Flipboard, while successful recent examples include Spotify and Netflix. Publishers need to follow these examples by using technology and data to get their content to the right audiences.

Apple News has not been the instant success many hoped, with a relatively timid uptake by consumers and only basic data back to publishers. The theory is sound though. While app engagement is still relatively low, with ad-blockers on the rise, we can expect more and more consumers moving in-app where publishers can deliver personalised experiences. On a slight side note, there is real progress in Variable Data Printing so a personalised experience of a paper product is no longer inconceivable and this would be a real game-changer, albeit some years away.

Publishers must embrace digital technology and utilise the platforms consumers are spending their time on, keeping up to date on new trends and gambling on those that will get real cultural traction. The next challenge is monetising any new digital ventures which, although difficult in a market where quality free content is an expectation, will benefit greatly from a multi-platform audience measurement system that we are moving towards. Beyond this though, and moving back to pure-play print products, how does measurement need to change to better reflect the role of magazines for advertising brands?

Closing Time

To reiterate our point from earlier: a declining market does not affect the remaining consumers’ relationship with a product. The fact that many pubs have closed does not stop us enjoying the time we spend in our local that is still open. Likewise, the real benefits of magazine advertising that often secures its place on a campaign (ie. an individual’s unique relationship with a physical magazine that provides a trusted, deep engagement) are not altered by falling circulations.

Traditional measures of media performance, such as ‘circulation’ or even ‘time spent’, are much less important than we as an industry have fallen into accepting. Indeed, it could even be argued that current metrics actually penalise traditional media (such as magazines) and benefit new digital media due to the differing standards applied in benchmarking.

One example would be the IAB industry standard for viewability in online video, which is currently 50% of the ad in view for a minimum of two seconds (and even this ignores the autoplay and in-feed context considerations). Despite this, online video investment is growing significantly. If we consider magazines readers of Marie Claire are spending 40 mins consuming the product or Empire where reading duration is 50 mins on average, to compare magazines like-for-like alongside video without factoring in this strength of engagement is imbalanced.

To change this, we all need to shift focus away from simplistic measurements of scale (such as circulation), and move towards engagement. This is a more valid analysis which recognises the true benefit that traditional media still has to offer advertisers. If you want to explore this more, I suggest we head down to the local hostelry for further discussion over a couple of drinks, as even though there are fewer pubs to choose from, the experience is very much still the same.

* All figures are UK Actively Purchased, except free distribution models (eg. ShortList), where the Monitored Free Distribution figure from ABC is used. % Change figures quoted are year-on-year.

* Average Time Spent Reading figures from NRS January – December 2015