Pumped PMB results won’t up ad rates – yet

One can imagine pallid-faced marketing managers - those who channel the bulk of their communications through magazine ads - with calculators in hand, crunching numbers following the release of new Print Measurement Bureau numbers June 21.

One can imagine pallid-faced marketing managers – those who channel the bulk of their communications through magazine ads – with calculators in hand, crunching numbers following the release of new Print Measurement Bureau numbers June 21.

The new data, based on the recent reading methodology rather than the old-style through-the-book approach, saw a sharp spike in readership across the board and pushed several publication audiences up by close to four million. Special interest pubs seem to have fared the best by the new study, seeing sharp increases in both readership and readers per copy.

But while the new findings indicate that past numbers were consistently depressed, many media buyers don’t feel the latest survey will produce any significant ad rate hikes – particularly not in the near term.

Hugh Dow, M2 Universal president, says that while top-line readership numbers are important, there are other key factors that play into media decision-making, including the composition of the audience, demographic make-up, editorial aspects, and relevance of the editorial to a particular ad campaign. It would therefore be very difficult for magazines to boost rates proportionately based solely on the surge in their readership results.

‘I’m certain if any attempts are made to base rates on the differences in the audience numbers, there will be considerable resistance on the buying side,’ he says.

Some magazine publishers are not so sure.

Canadian Geographic saw its audience go from 844,000 in the 2000 survey to over 4.6 million, and from 3.5 readers-per-copy to 20.2. And while the magazine agreed to hold rates in check this year, publisher John Thomson says that if next year’s numbers are consistent, well, he’s not committing to anything.

‘We’ll take a look at the market in 2002 and see how the situation is,’ he says. ‘Over the long term, I think the marketplace will find its own level and advertisers will pay fair value.’

While not surprised at the audience numbers – internal research already suggested much stronger numbers than the old methodology had reflected – Thomson says he couldn’t be happier.

And why not? Canadian Geo went from the nether regions of PMB 2000, somewhere next to Shoppers Drug Mart’s custom-published HealthWatch, to the forth-largest audience (12+). HealthWatch, incidentally, added some 3.7-million readers vaulting it to over 4.9 million, second only to Reader’s Digest.

It’s easy, then, to see that the new methodology has had significant impact on the landscape.

Under the old through-the-book approach, in place since the early ’70s, survey participants were shown a magazine cover and asked if they had read it. With recent reading, participants were given titles and asked if they had read any recent issues. Not surprisingly, the latter method generated a higher readership in all.

But because the approaches are so different and since more studies under the new regime are needed to gage a consistent pattern, media analysts and magazine executives suggest that comparing the two methods has no real value.

For John Ludgate, a research expert and manager of integrated marketing at Reader’s Digest, one important message in the new numbers is that Canadian magazines can effectively compete with other media.

‘It’s a way of putting our best foot forward,’ he says.

This benefit is important because until now, there was a perception that magazines were too expensive and not cost effective in terms of the media-buy mix, says Jacqueline Howe, publisher of Canadian Gardening magazine – the sudden recipient of a tenth overall ranking.

‘What this [survey] does confirm is that magazines are extremely cost effective. They should get their fair share of the media pie,’ she says.

‘I think the concern a lot of agencies have is that the magazine industry is going to take this and use it as a rationalization for driving up ad rates. I am not expecting that that will happen.’

Rather, Howe believes the result will be an infusion of more ad dollars to her magazine at current rates and its inclusion on more media schedules, she says.

That said, she doesn’t rule out a moderate rate increase down the road that takes into account a range of criteria, including paid circulation and the competitive environment around the book, along with the new PMB data.

Steve Rosenblum, account director, research at Harrison, Young, Pesonen & Newell, says that boosting ad rates based on increased readership could offset any gains made by magazines in terms of demonstrating viability as a competing medium.

‘They’ll basically be neutralizing the advantage of having moved up in the first place by making it prohibitively expensive to buy them,’ he says.

Still, he believes there could be gradual rate adjustments slightly above the annual increases of 3% to 5% of the last few years.

‘It would be reasonable for them if they are looking to collect on the significant change in the rankings to pursue a several year phase of modest increases.’

Rosenblum adds that despite the changeover, some fundamentals remain constant across survey approaches: Major competitors such as Time and Maclean’s, and Canadian Living and Chatelaine, continue to hammer away at each other in close proximity when you look at adults 18+.

When you look at it in those terms, little has really changed.