Spinning Your Circ Numbers

Circulation Management, June 1, 2004

Byline: BARBARA LOVE

Now more than ever, the advertising community is scrutinizing circulation and making value judgments on your numbers. How you present your circulation and how advertisers view your numbers can make a big difference in the success of your sales reps.

In this workshop, based on comments made at the Direct Marketing Association Circulation Day, questions posed by advertisers are put to Shaun Gurl, VP, consumer marketing, American Express Publishing; Tom Masterson, VP worldwide circ director, Business Week; and John L. Brown, VP consumer marketing, People Group.

Spinning "wantedness"

One of the things asked most frequently in the marketplace is the desirability and 'wantability' of a magazine. Advertisers relate this back to what price people are willing to pay for that magazine.

"Regarding the Northwestern study on readership (conducted for MPA), what's interesting is that they're people give value for magazines, in money yes, but also in their time - how much time they're spending with an issue. It's not just money," Masterson said. "With readers per copy, four out of say five of those people might not be paying anything, but they're still spending their time with that magazine, reading it."

"I don't really know from a technical standpoint how Northwestern did the study," Brown said. "I'll admit that Shaun and I might sound totally parochial, because [due to our high prices], it's to our advantage to go out in the marketplace and tell advertisers that (price) is important.

"We all know that price matters, because when we lower price in our direct mail, we get better response. Why? Because we're getting slightly less committed buyers."

Spinning average price

"One of the things I worry about is that the [ABC net average price] measure hasn't been out there a long time," Gurl said, "but inevitably, over time, you'll have ups and downs. A lower average price could easily result from a source mix change that is [actually good, like a sound affinity partnership], where the price paid by the consumer might be a bit lower, but these are better renewers [than some other sources]."

"At the end of the day, when we go talk to agencies, we let them know that we run circulation for profitability," said Masterson. "Agencies have a legitimate concern in knowing that in general you have healthy circulation, but ultimately, [very detailed probing into individual sources by media buyers] is mainly a negotiating tactic on their part. They're buying audience, but negotiating on circulation. We answer most of their questions, but there are certain things that we will tell them are proprietary."

It takes a total advertising sell-through, Masterson said. "You can't just leave it at the agency. You have to get to the client to have that discussion, because ultimately it's their dollars. And you have to talk about the efficacy of what you're doing from a consumer marketing standpoint."

Spinning acquired lists

There have been magazines that have failed in the past few years, and other publishers have acquired their circulation lists. Is that good business? And ultimately should salespeople be going back into the marketplace and telling the advertiser, clients what the renewal rates were on those acquired subscribers?

Again, as with partnerships, it's all about affinity, said Gurl.

Masterson added: "As long as you disclose it, then it's up to the marketplace to sort it out. You can make a sound argument that the overlap [of actual individual readers] is probably small, but there is that affinity, so it's good for the advertisers."

Renewal rates vary somewhat for different reasons that all consumer marketers understand, Masterson pointed out. "It's the possibility of having to explain the [normal types of circ reasons renewal rates fluctuate] on an overall basis that makes me leery of reporting renewal rates [across all magazines]."

"I feel pretty strongly on the renewal rate front," Brown added. "Our business is a complicated business. If you have good affinity, you get decent renewals. But what is decent?

"If renewal rates on transfer circulation, in aggregate, were - let's just say - anywhere between 10 to 15%, that might be good when compared to response to a soft offer. Trying to explain that [to agencies] is almost a non-starter."

There are audiences for which renewal rates mean nothing, Brown pointed out. "I'll go on record as saying that Teen People has a lousy renewal rate, because it's the nature of the audience - true of all teen titles, parenting titles etc.," he said. "As an industry, we would do well not to assist the advertising industry's desire to boil everything down to a single number."

Spinning continuous service

What effect does continuous service have on renewals? Is it being used as a fair marketing practice to the consumer?

"It's an absolutely valid marketing practice," Masterson said. "It's highly regulated by the FTC and other agencies, and our in-house lawyers are very careful to comply with all regulations. It's a pretty typical way to buy products/services - with newspapers, for example, a lot of people including myself authorize them to take payments out on our credit card. It makes a lot of sense.