This Magic Moment…
Challenge #1:  Magazines Are More Expensive to Buy
April 4, 2005

Magazines are uniquely positioned – for the first time in decades – to increase their share of total ad spending.  However, one obstacle that must be overcome is the high cost of planning and purchasing magazines relative to other media.   No, I’m not talking about CPMs.  I’m talking about process costs that provide a substantial disincentive for media-buying organizations to purchase magazines. 

Media-buying organizations are, first and foremost, businesses.  Most are publicly held.  As a result, their success is evaluated based on financial success like that of most publishers.  Unfortunately, buying magazines is inherently less efficient than buying television.  Informed sources estimate that 10 times the staff is needed to administer $1 billion in magazine spending as is needed for a comparable amount of television. There are three reasons that magazine buying is so resource intensive: 

• Front-end systems not only streamline the aggregation of information needed to plan television advertising, but allow for efficient buying as well.
• Magazines are bought and sold title by title, while television is purchased in packages of GRPs.  Consequently, buying print is more labor intensive than buying television. 
• Finally, there is as yet no industry standard for billing.  As a result, even the process of paying for print is less efficient.

Television is sold in packages of exposures that are delivered to broadly defined target groups by a number of different, and often unspecified, TV programs.  This has contributed substantially to TV's success.  It differs from publishers’ corporate selling, in that the mix of "programs" is flexible and secondary to target rating point delivery.  Near-seamless planning and buying systems allow for the less labor-intensive and more automated purchase of television advertising.  As a result, the buying process can largely be undertaken sitting in front of a computer-screen. 

In contrast, magazines are evaluated and planned individually and then aggregated.  It is analogous to planning television program by program.  Each publication is assessed using information on audience and circulation, along with other pertinent information.  The systems which support syndicated audience data are different from those providing information on circulation.  They are not readily integrated.  As a result, the process of assembling the highly granular information needed to plan print is more labor intensive. 

Then there are sales calls.  Representatives of every magazine that might possibly be included on a given advertising schedule are calling - or trying to call - on the media planner, media supervisor, AMD and media director et al.  Sometimes they call on the chain of command on the client side as well.  Sales calls require scheduling, preparation and follow-up, all of which take time and resources on both the selling and the buying side.  It is very expensive for all concerned. 

Lastly, even paying the bill for magazine advertising involves more labor than for television.  Billing formats are widely divergent and require substantial manual intervention.  The information that agencies need to readily process and allocate magazine charges is not always included, much less in a consistent format for which the process could be automated.  AdsML is an international specification for managing all aspects of print advertising workflow - including ad insertion, tracking, and billing.  It is being advocated as a U.S. standard by the IDEAlliance, an organization active in setting standards for print production and distribution, working alongside the 4As and the ANA.  Several publishers are testing AdsML.  If adopted, it will be an important element in helping to make the print buy more efficient. 

Until we can bring the cost of buying magazines in line with those of television, we cannot reasonably expect media-buying agencies to be media neutral, when buying television has a more beneficial impact on their bottom-line.  Publishers need to rethink the sales process and make a choice of whether they prefer to be architects of change, or its casualties.  At stake are improvements to magazine revenue, cost structure, and competitive advantage.  These are worth the effort that will be required.