November, 2009 | The MarketFarm

The startling drop in audited circulation

According to AudienceDevelopment.com, audited circulation levels are declining at historic rates.

This actually points to two trends — one economics related, and one customer-induced.

The first is that publishers are cutting circulation in order to reduce cost. AD states that “183 publications decreased circ 5 percent or more compared to 142 a year ago and 101 the year previous. Conversely only 41 publications increased circ five percent or more compared to 76 the year previous.”

OK, so publishers are cutting circulation to reduce printing and postage costs. It happens in every recession, and it won’t come back much, if at all, following this recession because advertisers won’t accept rate hikes in exchange for a larger rate base. There’s simply no money in sending more publications to more people.

But the second trend is bigger and more meaningful to advertisers and publishers – and it could put the auditors out of business. That is that publishers are dropping their audits altogether because the audit process provides decreasing ROI.

AD states: “Departing titles far exceed newly audited titles. A record 69 titles were discontinued or ceased being audited and only 23 titles were added to the audited ranks. The total number of audited “consumer magazines” fell from 545 a year ago to 499.”

More and more advertisers are changing their perspective from wanting to reach a verified audience to wanting to achieve a measurable response from whoever they reach – a painfully fundamental change that I’ve previously addressed, and which most publishers – especially in the glamorous consumer world – are still trying to tiptoe around.
A hundred valid responses from an unaudited audience is worth 10x more than 10 valid responses from an audited audience.
From a publisher’s perspective, if you can deliver the responses, the audit becomes irrelevant.

Based on this, the audit bureaus ought to be frightened.

And while abandoning your audit is still a bold step in the magazine business, I assume that most publishers who do so are reinvesting in products that deliver the kind of results their customers really want.

The parties I’m most concerned about are the publishers who haven’t talked about leaving the audit behind. Because if it hasn’t occurred to you, then you clearly haven’t been listening to what your customers want. And this is one of those watershed times when the only security is to be so close to your customers that you can feel them breathe.

So the Yankees won the World Series…

… and the sun came up this morning. (But you couldn’t see it in Cleveland.)

Iran is on, no off, no on again, and off again in negotiations over uranium enrichment. Jon Stewart made me laugh again, and Rush Limbaugh is about to pop an artery over something or another. My son left the lid up; my daughter stepped right over a pile of her clean laundry in the hall for the fourth straight day.

Another bank either raised my credit card interest rate, lowered my credit limit, or both. The bagger at the grocery store would have put the Coke 2-liter on top of the Wonder Bread if I hadn’t stopped him.

Someone from Nigeria just sent me a personal note, addressing me as “Dear Kind Sir” and offering to give me several million dollars if I will help to launder it by providing my bank account number.

The bottom of my feet hurt a little bit when I got out of bed this morning, but I slept like a baby.

For these things, nobody is going to throw a parade on Broadway. So why should they when the most reliable dynasty in sports does the probable?

God how I hate the Yankees. How nice it would be if I could love them instead.

I could more easily stop being left-handed.

In retrospect, was hanging chad so bad?

After 232 years of the USA you’d think we’d be pretty advanced at managing elections by now. But I’ve got this sick feeling we’re getting worse at it.

Back when I was a kid, my parents voted in mini-van-sized booths with curtains, dozens of little levers and one big, red master lever. When you pulled that, you got an audible whrrrr and a click to tell you your vote had been cast; you could see all of the little levers reset, to verify that your vote would be counted for each issue or candidate.

By the time I started to vote, we were punching holes in cards and sticking them into a metal lock box. The only verification that a vote would be counted was the “I voted today” sticker you got at the door – obviously more symbolic than utilitarian.

When I voted today, I filled out little circles with a pen – like the standardized tests I took back in grade school. Then I stuck the ballot into a scanner that was attached to the top of a plastic bin that looked disturbingly like a medium-sized Rubbermaid garbage can. Given all the hanging-chad problems with the previous method, I welcomed the electronic scan – figuring it would verify that all my circles had been filled completely and my ballot was not only cast, but also complete.

It didn’t. It just gave a little “bong” and swallowed my ballot. The elections worker said, “Thank you,” and they failed to offer me a sticker.

I’m thinking by the time my children start voting, they’ll probably do it by dropping a marble in a box, or sticking their finger on an ink pad. Hope they get a sticker.

All the news that’s fit to buy

The New York Times, according to one of its own, is close to deciding whether to try charging for online content. If you assume that the best way to bolster the future of news is to figure out how to get people to pay for it online, then this is important – and a good thing if The Times does, in fact, try charging for content.

The only way to get people to start paying for content is for a few leaders to simply take the leap and start charging. Rupert Murdoch’s News Corp. is implementing a plan to do so. Having The Times follow would only be good for the movement.

Can it work? That’s the big debate in media. Many think content wants to be free. Others, like myself, think consumers want it to be free primarily because they’ve been trained that content comes cheap. What nobody knows is how much people will actually pay, or whom they would pay, for real journalism.

If the news is to find its footing again – that is, if anyone is ever going to figure out a 21st Century business model by which journalism can flourish – the starting point is knowledge of the true value that journalism has to its end users. This is something that’s been obscured for the past 150 years.

Will consumers place enough value on it that they are willing to pay the full, unsubsidized cost of sending investigative reporters to do what they do (and defending against the inevitable lawsuits that are a byproduct of their work)? It would be nice. It would simplify the quandary of media executives, who are now gathering in solemn charrettes in search of a bew design for profitable media.

But the truth is that nobody knows. We don’t know what a newspaper would actually cost if paid for fully by readers? Or how its mission, staffing levels, range of focus and intensity of reporting might be adjusted over time to reflect the market-based measure of its value. How would it be distributed? How often would it be published? Who would its readers be?

None of these questions can be answered until enough media simply jump in and try to find out. Until now, few (the Wall Street Journal being the only one of any critical mass that I can come up with) have taken that risk. If The New York Times is getting ready to give it a try, desperation in the business may be reaching some kind of tipping point.

I’m fully confident that real journalism has a significant societal value. The problem is that it’s always been paid for indirectly. Once that value is untethered from the indirect means by which media have always monetized it (that is, advertising), then the real work can begin to right-size the industry and focus efforts where they deliver the most value.

There is real risk that the result would be even more “circular media,” in which celebrities are first manufactured and then covered by the same media organizations as if they were of real consequence (Jon & Kate and Lindsay Lohan represent two train wrecks in which the front of the train has crashed into its own caboose).

But I’m more optimistic than that. I have enough faith left that if news businesses got serious about charging for the news, they would eventually achieve market balance – knowing how much to spend, and optimizing that for the best impact, as defined by consumers.

I’m hoping the Gray Lady of New York is ready to give it a try.