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By Thomas Baekdal - April 2012

Magazines Still Try To Hide The Real Impact of Advertising

In a world where everything can be measured in extraordinary detail, how good an idea do you think it is to hide important data for people who needs it?

This is, however, exactly what the magazine industry is doing today on the iPad. Instead of telling advertisers exactly how an ad performs, they obfuscate the numbers and only tell advertisers irrelevant numbers for the publication as a whole.

This is nothing new. The magazine industry has always tried to hide the real performance from advertisers. It is how print advertising works.

The problem is that in the digital world, we can measure exposure, and we do. But magazines don't seem to realize that. Yesterday, the MPA (The Association of Magazine Media) announced a new set of guidelines to "drive growth in advertising on tablets".

As they said, "The tablet guidelines have been created to recognize the need within the advertising community for greater insight and understanding into how to best leverage this powerful new platform."

That all sounds good, but then they came up with these five measurements:

They are not actually talking about the ads. They are only talking about the package as a whole. None of this has any relevance to advertisers.

Imagine if Google only told its advertisers how many people who used Google Search as a whole, but did not reveal any numbers for each individual advertisement.

What advertisers want to know is:

More to the point. Magazines have to realize that, in the digital world, they are competing with Google Adsense, Facebook Ads, and Twitter's promoted stories. All of which can be purchased on a CPA model. Advertisers *only* pay when people engage with the ad, not when it is just being viewed.

It reminds me of the great quote from Ken Auletta's book "Googled". He tells the story about how the traditional culture clashed with the digital one, when Mel Karmazin, president of Viacom, met Google's founders to discuss advertising:

Here is a short excerpt:


It was Google's ambition, Schmidt and Page and Brin liked to say, to provide an answer to the adman's legendary line "I know half of my advertising works, I just don't know which half." To help them sort through the digital clicks, Google and other new media companies relied on what are called cookies, software files that reside on a user's browser and keep track of their activities online: search questions asked, Web pages visited, time spent on each Web page, advertisements clicked on, items purchased. Because of these cookies, Google's searches improve with use, as they become more familiar with the kind of information the user seeks. Although the cookie doesn't identify the user by name or address, it does assemble data advertisers crave and couldn't get from traditional media companies like Karmazin's.

And unlike traditional analog media companies, which can't measure the effectiveness of their advertising, Google offered each advertiser a free tool: Google Analytics, which allowed the advertiser to track day by day, hour by hour, the number of clicks and sales, the traffic produced by the keywords chosen, the conversion rate from click to sale-in sum, the overall effectiveness of an ad.

Thus, the several hundred million daily searches Google performed in 2003 (today the number is 3 billion) provided a tantalizing trove of data. Google helped advertisers target consumers not just by age, sex, income, profession, or zip code, but by personal preferences for leisure time activities, frequently visited locations, product preferences, news preferences, etcetera. Google took much of the guessing out of advertising. "Our business is highly measurable," Schmidt said. "We know that if you spend X dollars on ads, you'll get Y dollars in revenues per industry, per customer."

Karmazin was aghast. Most of the American media-television, radio, newspapers, magazines-depended for their existence on a long-entrenched advertising model. In the old method, at which Karmazin excelled, the ad sales force depended on emotion and mystery, not metrics.

"You buy a commercial in the Super Bowl, you're going to pay two and one-half million dollars for the spot," Karmazin said. "I have no idea if it's going to work. You pay your money, you take your chances." To turn this lucrative system over to a mechanized auction posed a serious threat. "I want a sales person in the process, taking that buyer out for drinks, getting an order they shouldn't have gotten." What would happen if advertisers expected measured results from the $3 million spent for each thirty-second ad for NBC's 2009 Super Bowl, or for the approximately $60 billion spent on television advertising in the United States each year? Or the estimated $172 billion spent in the United States on advertising, and the additional $227 billion spent on marketing, including public relations, direct mail, telemarketing, and sales promotions?

"That's the worst kind of business model in the world," he said-the worst, that is, if you're an old-school ad man. "You don't want to have people know what works. When you know what works or not, you tend to charge less money than when you have this aura and you're selling this mystique." For sixty years, network television sold much of its advertising in an "up-front" each spring and summer after the new fall shows were announced. Even as audiences were declining, executives created a cattle-stampede mentality by convincing advertisers they'd get shut out of the hit shows if they didn't buy early. Karmazin and the networks continued to charge ever-steeper rates because, he said, "advertisers don't know what works and what doesn't. That's a great model."

The Google executives were equally appalled. They thought Karmazin's method manipulated emotions and cheated advertisers; just as egregiously, it wasn't measurable and was therefore inefficient. They were convinced they could engineer a better system.

By then, Karmazin knew there was little he and Google could do for each other. "I was selling twenty-five billion dollars of advertising," he said. "Did I want someone to know what worked and what didn't?" Like the aging Falstaff, he had "heard the chimes at midnight." Karmazin trained his eyes on his Google hosts, his hands folded on the table, his cuff links gleaming, and protested, only half in jest, "You're fucking with the magic!"

From Ken Auletta's: "Googled, The end of the world as we know it".


This is the new world. As CMOs are put under increasing pressure to demonstrate a real return of investment, having useful and relevant data is absolutely critical. Not just for the advertisers, but also for the magazines' ability to sell those ads in the first place. It simply won't do to try to hide those numbers.

Conde Nast is doing slightly better. Three weeks ago they also announced a deeper level of insights for advertisers. They would provide:

Again, not very useful as it tells you nothing about the ads themselves. But 'premium' advertisers (those who also pay $5,000 to have clickable links), also get access to:

That is much better.

But there is a catch. Conde Nast will not tell you any of these up front, nor in real time. "It plans to give advertisers data on each new issue about 10 weeks after it comes out."

10 weeks? That means the CMO will be left in the dark until almost three months after the campaign is over. That's so long that the numbers, whatever they might be, are completely irrelevant. You can no longer use them for anything, and most brands will have moved on to other campaigns.

This is the same model as in the past. The one Karmazin talked about when he said, "I have no idea if it's going to work. You pay your money, you take your chances."

The magazine industry needs to wake up. The digital world is not a world of mystery, taking your chances, or trying to obfuscate the real numbers to make people believe something that isn't.

The digital world is one of data. If your data cannot demonstrate real results, you are out! CMOs can no longer afford to buy and forget. Providing real data is what gives you a competitive edge, and hiding them takes it away.


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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé


—   thoughts   —


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