Tag: magazines

A single metric to compare different publications

You’ve received quotes for advertising from two publications or websites; one wants to charge $150 and the other $350. How do you know which is the better deal?

Creating an apples-for-apples comparison between different publications is difficult because it involves so many variables.

The most common calculation for this job is cost-per-thousand (CPM), which measures the amount of money it takes to reach 1,000 people. You can use it for any medium – broadcast, print and online. (But it won’t hold up if you try to compare one medium against another).

Here’s the formula:

CPM = Rate/(Circulation x .001).

So if an ad costs $250 and the publication’s distribution is 8,000 copies, the CPM is $250/8, or $31.25.

It’s a simple calculation, and it lets you compare the rates of different publications with different circulation sizes.

But it has limitations.

For instance, it only works when comparing rates in the same media channel – print v. print or online v. online. That’s because the economics to produce different media – and the results they generate – are so different. Even when using it to compare two similar offers, be aware of these complications:

Ad size: CPM for a half-page ad will be higher than for a quarter page ad in the same publication.

Frequency. The more ads you buy, the lower the price will be for each. That means a single publication will have a different CPM for every ad unit and every frequency rate. The Heights Observer, which offers a pretty typical rate structure, has 60 different CPMs depending on the size of the ad and the number of insertions you buy.

Page size: Move vexing, a quarter-page ad in one publication (The Wall Street Journal, for instance) may be much larger than a quarter-page ad in another (i.e. Reader’s Digest).

That’s why it’s helpful to take CPM a step further – CPM per square inch (CPM/i²).  It’s the cost you pay for each square inch of space to reach 1,000 people. Here’s the formula:

CPM/(height x width)

This will get you closer to that apples-for-apples comparison between different publications. It’s still not perfect. The bigger the differences between two publications, the less relevant CPM/i² will be. But in such cases, it may be the only tangible link for comparing  disparate ad products.

So what’s the best way to use CPM and CPM/i² to make advertising decisions efficient and painless?

Step 1: Decide which publications you’re interested in, based on who they reach and how you feel they’ll work for you. Then look up or request their rates.

Step 2: After getting past the sticker shock, decide how much you want to spend per week, month or year. (Plan to advertise consistently over an extended period. It works best when treated as a long-term investment.)

Step 3: Select ad units in each publication that fit within your price range. Include any extra charges for color. If you can afford a full-page ad in one publication but only a small ad in another, that’s OK. CPM/i² should become a smaller part of your decision but it’s still instructive in your evaluation.

Step 4: Using the same frequency rate (i.e. if you use the 12x rate in one publication, use the closest thing to a 12x rate in every publication), calculate CPM/i².

Now you can evaluate the pricing with confidence, knowing this is as close as you’ll get to an apples-for-apples comparison.

In the end, CPM/i² is only one metric; it should never be the your only consideration. Such factors as a publication’s acceptance among readers, the relevance of its content and its customer-friendliness are at least as important.

Your gut may have to take you the rest of the way.  But you’ll know there is at least some science behind the decision.

Image courtesy of Suvro Datta/FreeDigitalPhotos.net

 

Advertising 101: Frequency v. size v. color

If money were easy to come by, every ad would run in every issue as a full page. But a buck is hard to make and compromises are a fact of life.

So what’s more important: running a big ad or running an ad often?

Advertising – any advertising, whether print, online or broadcast – works best through repetition. Look at it this way: You know that if you send a direct mail piece or a mass e-mail, only a small percentage of recipients will actually open it.

Advertising offers better percentages, but the concept is the same; 10,000 people may read a publication, but only some of them will notice any given ad.

Conventional wisdom in the media industry says it takes 7 impressions to attract a reader’s attention. I’ve never actually seen any research to support this. But I think I know where it comes from. I’ve been involved with research at various magazines over the years that indicated 10% to 20% of readers were able to positively identify whether a specific ad ran in the most recent issue. Larger ads generally increased reader recall.

From that you can conclude an ad needs to run 5-10 times before everyone in the publication’s circulation can be assumed to have noticed it.

(A statistician could find about a dozen things wrong with this statement. And the research will vary widely depending on the publication, its audience, the number of pages and advertisements it contains, and a host of other factors. So please take it in the general spirit intended).

But just because people see your ad doesn’t mean they are currently interested in what you’re selling.

For instance, regardless of how large your ad is, you’re not likely to sell carpet to someone who’s renting an apartment month-to-month.

The more times an ad runs, the greater the number of people who have a chance to see it. Those who will be interested in your product or service are always a subset of that number.

But when that person buys a house and starts thinking about upgrading the floors, you want him to have noticed your ad in the past; you want him to go looking for your ad in the publication’s current issue.

Therefore, successful advertising isn’t just about getting noticed. It’s about 3 things:

  1. Getting noticed
  2. Being remembered
  3. Being there at the right time

That’s why I recommend frequency as the higher priority in advertising. Frequency is a factor in all three things while size is only a factor in No. 1. I’d confidently predict better results over time for someone who runs a smaller ad in every issue than a larger ad sporadically.

Further, spending too much on an ad can harm its chances of success. How?

If you sell houses for a living, a single commission can pay for a year’s worth of large ads. Selling a home is a big deal involving big money, and a big ad to discuss it seems reasonable.

But if you sell haircuts or ice cream cones your ad needs to attract a lot of customers just to cover its cost. The larger the ad, the better it has to perform just to pay for itself.

If you run a hair salon, how many strangers on the street would you have to approach and talk to before one of them says, “I was just thinking of getting my hair done and I’m not satisfied with my current stylist. I’ll head over there right now.” Would it be 100? 200?

Run through the math: If a publication has 10,000 readers, perhaps 1,000 of them (1 in 10) will take note of your ad the first time it runs. If 1 in 200 decides at this particular moment to abandon her old hair salon and try yours, that means it would be unrealistic to expect more than 5 people to walk through the door as a result of the ad. What is a reasonable amount to spend for those 5 people? And because this is an inexact science, what’s a reasonable amount to spend if the first time the ad runs, it’s only 1? Or none? (As in the bottom of the pyramid in the graphic above.)

So be realistic about how much business the ad is going to bring in – especially in the first few months – and don’t sign up for more than you can afford to spend out of existing cash flow. And expect the results to improve gradually over time, until a steady flow of people tells you they’ve noticed your ad.

There are moments when these rules of thumb may not apply. For instance, if you’re promoting an event or have some other short-term message, then it’s most important that your ad gets noticed right away by as many people as possible. That’s when you want to buy a large ad and negotiate (or pay for) the best positioning you can get.

Color too plays a role. Spending extra as needed for color will help get your ad noticed – though it has a lesser impact than size. Also, color probably has more impact on the way your message is perceived than on whether it’s noticed at all.

The small business owners who tend to be happiest with their advertising are those who buy a smallish ad, spend time developing its look and its message, and then commit to running it month after month, year after year.

Advertising works. It’s not so much an expense as an investment. So invest wisely and consistently. Do it in a way that you can afford to give it time to work. If you do, it will make your business better. 

The economics behind the media meltdown

What really happened that caused traditional media to shrink so much over the past decade – and why are so many still struggling to come back?
That’s the subject of this presentation, which I’ve given several times over the past few years.

 

Why the media meltdown from Bob Rosenbaum

Names make news (2.0)

reading paper_graur razvan ionut_freedigitalphotosTwo years out of college, as a young reporter for a business weekly in Upstate New York, I met the crusty old publisher of the Pacific Business News – a business journal in Honolulu. I didn’t like him much. I was idealistic and ready to change the world. I was living in the snow belt and learning how businesses work. I was reporting on Michael Milken (a Master of the Universe, the junk-bond king, deal-maker supreme) and leveraged buyouts. I was writing about how empires were made, how old cities were rebuilt, how capitalism made the world turn.

This old guy, meanwhile, was living in paradise and frustratingly pragmatic. Standing before a room full of wide-eyed people like me, he was asked to dispense some advice to us young guns. After something like 50 years in business, you know what he came up with?
“Names make news,” he said. That was it.
To look at his newspaper was to understand how this pedestrian philosophy played out in the real world. While it has been updated over the past 25 years to get ahead of changing times, the product I saw that day was gray and cheap. Articles were short, reading as if written by flacks and hacks. Every person’s name that was mentioned – there were a lot of them – was bold-faced. Some articles seemed concocted for the specific purpose of highlighting a large roster of names.
I was unimpressed. I promptly forgot that old publisher’s name and promised myself I’d forget his tired old advice too.
What I discounted was his experience. He’d been running the same publication for something like 50 years. It’s possible, I now realize, he had learned and discarded many other truths along the way – distilling his success into one rule of thumb that fostered success for his product in his market at his time.
Names make news.
I never did manage to forget that advice. While it’s not the only rule I’ve lived by over the years, I’ve had many occasions to apply it, and it has never failed me.
It came back in a rush this morning when Seth Godin’s most recent blog post came through my e-mail. Seth is a marketing guru; he dispenses more good advice in a week than many of us dispense in a lifetime.
Seth’s advice on the subject doesn’t come across like that of a crusty old publisher marking time in Hawaii. It’s contemporary, directed at social media marketers, online journalists, bloggers – would-be masters of the new digital universe.
But it’s equally concise and to the point. When people look at photo albums, he says, they go directly to pictures of themselves.
He writes:
Knowing that, the question is: how often are you featuring the photo, name, needs or wants of your customers where everyone (or at least the person you’re catering to) can see them?
So listen up Internet 2.0ers. Your self-indulgent rants, your complex business models, your highly-designed user experiences are all well and good. But as media change, some things don’t. Names make news. They always have and they always will.

Image courtesy of graur razvan ionut; FreeDigitalPhotos.net

Sales of digital content improve thanks to some new tools

As digital readers improve the online reading experience, people seem to be getting more comfortable with the idea of paying for online content. With that progress, what publishers need now is an effective and easy way to accept payment for content – whether they want to offer content on a metered, per-use or subscription basis.

Amazon’s Kindle Fire has, perhaps broken a barrier with the easiest access to online magazine subscriptions I’ve seen. That’s the strength of the Fire: it’s an incredibly effective portal for buying content – and, frankly, anything else Amazon has to offer. The Fire’s downsides are:

Size: The 7-inch screen is simply too small for enjoyable magazine or newspaper reading. Even the magnification feature doesn’t go far enough, and it intereferes with smooth nagivation on the page and from one page to the next.

Weight: Holding the fire is a little bit like holding a flat, shiny, somewhat sexy brick. It’s a load – though it might provide interesting synergy with a bodybuilding magazine.

More-than-occasional glitchiness: The touch-screen doesn’t always respond well; sometimes it seems too sensitive and others not sensitive enough. For magazine and newspaper viewing, that makes page scrolls and page turns an unpleasant guessing game.

Limited media offerings: All of the other issues will likely be mitigated in subsequent versions of the Fire. But where Amazon’s strength has always been the scope of available content, periodical choices seem limited. Perhaps I’m wrong on that; perhaps the available choice reflect the current  range of publications that have dedicated themselves to the future of digital content consumption. But if Amazon wants to emerge as the leading content delivery platform, than it’s going to need to move away from teh curated approach that it takes with apps and seems to be taking with periodicals.

So what other options do magazine publishers have if they don’t want to be limited by (or captive to) Amazon’s subscription model?

Here’s an interesting new approach: TinyPass.com is a startup paywall service that offers the kind of flexibility publishers need. Payment can be accepted through any means – from PayPal to Amazon to Google Wallet to a dedicated merchant account. And content can be delivered in any distribution model: paywall, metered, pay-per-use, etc. According to PaidContent, it even accommodates varied content models – such as the ability to split revenue with contributors.

TinyPass is a young copy and I’ve not done enough due diligence to predict its success. But it certainly represents the kind of flexibile functionality that the publishing world needs if its growth curve for selling digital content is going to continue.

The time has passed for revenue-enhancing digital products

A small B2B media company contacted me to talk about enhancing revenue by adding some new digital products to its portfolio. The company already offers a digital edition, business directory, email newsletters, web-seminars and a number of other digital B2B staples. Non-monetized but just as important, it has a reasonable Twitter following, a large group on LinkedIn and a Facebook page that is basically just a placeholder.

I’m sure there are more products the company could implement. It doesn’t have any mobile offerings to speak of, and its website represents first-generation internet thinking – a source of information but not of engagement and interaction. With a little bit of study and a few billable hours I could have made some recommendations.

Here’s what I told them instead: The opportunity to increase revenue by adding digital products has largely passed, and simply adding new products will probably hurt the business by:

  • spreading the editorial staff even thinner;
  • raising digital development costs;
  • over-running the sales force’s competence;
  • stressing customers, who don’t have more money to spend on new products and will be forced to decide which products to support and which to ignore.

In essence, trying to invigorate the company by adding more digital products is just going to lead to more fatigue for everyone – and at best provide only incremental revenue gains.

The real opportunity – and the only real option – is to use digital tools to increase the organization’s footprint and prominence.

Here’s the argument:

In B2B media, ad revenue and unit yields have been stagnant for a decade, and there is no reason to think that’s going to change for the better. As hard costs continue to rise, print circulations have been on a forced retreat. Publications that have maintained controlled circulation levels are doing so by cutting in other areas or – more likely – by winning market share and profits from other, lesser competitors. Neither is sustainable.

Given that it’s not economical to add print readers, the real value of a digital strategy is to present the brand to new people – either by expanding outside the magazine’s traditional market (taking a step upstream, toward the advertisers’ suppliers, for example) or its traditional geography (i.e. international).

That doesn’t mean simply launching a digital or iPad edition. These are passive – cool media in Marshall McLuhan’s lexicon.

But extended audiences demand hot media. They need to be actively engaged; they need learn for themselves how a media brand is valuable to them. Engagement at that level means creating a different kind of relationship based on interaction with community, expansiveness of content, and flexibility in the way content is applied. These are the strengths of digital tools – when those tools are skillfully and strategically applied.

In the real world, it probably means a pretty significant website overhaul and, more significantly, redeployment of staff and restructuring of sales compensation.

Editors have to stop thinking in terms transferring knowledge from experts to the readers – instead becoming moment-to-moment conduits for peer-to-peer communication. Less like network news anchors and more like a highly specialized cruise directors.

Sales strategy has to evolve too. It’s less about products and more about platform – how the media brand provides a fluid and organic conduit between the advertiser and the market.

These are not small changes to make, and this is not a short-term project. But it represents the difference between relevance, growth and prosperity on one hand; and retreat into a niche position or extinction on the other.

How big is mobile computing? Really big.

Mary Meeker of Morgan Stanley made the following presentation at a recent meeting of technology wizards and gurus. (Notably she got the name of the event wrong; it’s the CN Summit.)

There’s a breadth of information here, ranging from adoption of mobile technologies to the potential for mobile advertising to the investment outlook for companies in the business.

The big takeaway for me is how it underscores the increasingly reasonable-sounding claims that mobile computing will change how we think about computing; and, no less, how important it is for media companies of all sizes to recapture their audiences on the small screen.

Internet Trends 2010 by Morgan Stanley Research

View more presentations from CM Summit: Marketing in Real Time.

ABC audit bureau dives into digital head first

ipad2For those – and there are many – who say the iPad won’t save publishing, here is evidence that the Little Tablet that Could might be more powerful than they expected.

ABC, the leading auditor of consumer and paid periodical circulation, has built a service that allows media to count readership across  multiple electronic platforms: apps, e-readers and mobile browsers.

Ordinarily slower than honey from the fridge, the audit bureau’s speed to provide meaningful data across the fast-emerging new-media platforms speaks to the urgency of its customers. The data means media will be able to sell advertising for new online formats almost as fast as they develop. That alone will hasten the already hurried development of unique offerings for smart phones, mobile websites and the iPad (as well as the fleet of act-alike products that others will inevitably produce).

It’s important because it’s a stay of execution for the advertising-based business model on which virtually all media rely but which has so far resisted the digital transition.

Why give the iPad credit for this? Since its introduction just a month ago, the conversation about mobile media has changed dramatically – as have reader habits.  Powered by the app, consumers are suddenly willing to buy subscriptions for online content,  Google has been declared a declining power in big media’s pursuit of traffic, and at least one of the major audit bureaus has been shaken to innovate. All because iPad provides a different user experience than any previous device.

I’m not ready to declare that the iPad is going to save publishing-as-we-know-it. But I’m pretty sure it will be right in the middle of publishing-as-it-comes-to-be.