The Economics of Publishing:Public Place Copies May Represent the Best Value for Advertisers
By Rebecca McPheters

March 2004

From an advertising perspective, the appropriate role of media is to provide qualified audiences for an advertiser’s message. Since audience size and quality are the key determinants of media value, I am sometimes amazed - not only with the attention focused by advertisers on circulation, but by erroneous perceptions of what constitutes circulation “quality”. One of these longstanding myths is that public place copies provide less value for advertisers than newsstand or subscription copies. In fact, more often than not, the opposite is true.

Now don’t get me wrong; not all public place distribution is valuable. For public place copies to be of value, they have to go into appropriate locations where there is not only high traffic, but also a fit between the clientele and the publication. In other words, they have to generate readership. When we examine publishers’ circulation strategies we often encounter elements of public place distribution that contribute little or nothing to measured audience. However, in many cases, these public place copies provide substantially greater value than copies distributed to individuals.

Late last year, Scott McDonald - Senior Vice President of Research at Conde Nast - and I presented a paper at the Worldwide Readership Symposium that set forth the results of our efforts to document the contribution of public place copies for 3 Conde Nast titles. Through the use of statistical regression techniques, we were able to determine that for these 3 titles, public place copies were contributing an average of 30 readers-per-copy to the total audience measured by MRI. When we broke public place down into its component parts, we found that copies distributed to beauty parlors contributed in excess of 50 readers-per-copy for these titles.

One of the reasons that advertisers feel that public place copies are not as valuable is that they believe the readers of these copies are less desirable in terms of both demographics and involvement with the publication. While it is true that public place distribution may provide a lower concentration of readers in key targets, such as those with household incomes of $75,000 or those who plan to buy a car in the next 12 months, our analysis showed that even with substantially lower comps for some key targets, the public place copies offer advertisers a multiple of the value offered by those bought via subscription or on the newsstand.

Let me illustrate. A typical subscription copy generates about 3 readers-per-copy. Let’s assume that a third of these readers fall into a specified target. In other words, one of the three readers is a target reader. A public place copy reaches 30 readers per copy, and only 10% fall into the target group. This copy is providing the advertiser with 3 target readers. Which would you rather have - 3 potential buyers or only one? In our real life examples, Scott and I were able to use MRI data to show that even for the most selective targets, the public place copies provided many more qualified readers.

A publication’s audience is the natural outgrowth of its editorial and circulation strategies. Getting all of the elements to work in harmony is akin to conducting a symphony. So what are the lessons to be learned?

• Publishers need to manage their brands and their circulation to maximize value for advertisers. This approach has substantial benefits for publishers, as well.
• Advertisers should focus their attention on metrics that reflect that value; reach of specified targets, advertising effectiveness, and ROI.

Then both camps should sit back and listen to the music!