Today we were exposed to the underbelly of media and ad buying compliments of the Wall Street Journal. I will say that these at the moment are allegations; however, as a media buyer, situations similar to this have bugged me for years-especially on the local level.
The WSJ allegedly using a controversial scheme to boost its European circulation
Essentially, ad prices are based on circulation numbers. Larger publications are regularly audited by an outside organizations to ensure that the numbers are correct and accurate.
Most circulation audits similar to which we speak of are done by organizations such as the Audit Bureau of Circulation. Television has Nielson, Radio has Arbitron.
In this case, the Wall Street Journal is accused of using a scheme in which they themselves essentially buy up copies of their own paper to keep circulation up and thus ad prices up.
So, if the BIG guys that are audited are gaming the system, let’s consider those that are NOT audited and what they can do to game the system.
Local Media and Ad Buying Implications
If you look at the audited number for the Gainesville Sun: (Circulation averages for the six months ended: 3/31/2011)
| Publication Name | Frequency | Circulation Type | Total Circulation* | Filing Status |
| SUN, GAINESVILLE (ALACHUA CO.) | SAT M | DLY | 32,392 | |
| SUN, GAINESVILLE (ALACHUA CO.) | SUN | DLY | 42,764 | |
| SUN, GAINESVILLE (ALACHUA CO.) | AVG M (M-F) | DLY | 33,444 |
So here we have a 3rd party the circulations that we can do our calculations as to CPM, etc.
Now imagine, if a local periodical was allowed to just make up their own circulation numbers.
Yes, if they are not audited – that is exactly what is happening. We must rely on the media to tell us as ad buys their circulation.
Games Played by Local Periodicals & Magazines
As media buyers, we see three games being perpetrated by unaudited periodicals and magazines.
1) They just make it up.
We have seen several examples, in which we estimate the periodical or magazine’s revenue using FULL rate card for each ad placed in said magazine.
We then price the same periodical for printing, using same materials and the number they claim to print.
It is NOT even close.
2) They just make it up – mutliplier.
Some are not as blatant as mentioned above – they just ‘fudge’ a little.
What they are doing is telling you a printed number increased by a fabricated “readership multiplier”.
The theory goes something like this “A magazine sent to my house is 1 printed copy, but it is read by me and my wife. It should count as 2.”
This is sometimes also referred to as as “pass-along.”
Here is some reading critical of that approach.
Dispelling the Myth of PR multipliers.
3) They print more than are actually put into circulation.
We have on occasions, found bundles of magazines in the recycle bin versus being distributed. Yes, they are printing them – but only if dumpster divers are your target market does it make sense to buy these ads.
What should you do?
Just realize that if the publication is unaudited, all bets are off.
In truth, the ad prices are NOT based on circulation, but on what the market is willing to pay for it.
- Ask if the publication is audited on their circulation.
- If not, ask two questions – how many do you print? What is your estimated readership?
- Ask detailed questions about distribution? Direct Mail? Or do they just drop off 500 copies at doctors’ Offices who then trash 498 of them?
- If you think you are being taken advantage of, do the market test. Get the rate card, estimate the ad revenue, call a printer and estimate the cost to print. If the numbers are anywhere near even, you have something to discuss with your ad rep. (Secret – most ads are not sold at rate card – some are given away for charity, others are sold at reduced rates because of negotiations.)
- Negotiate, negotiate, negotiate Again, the price is NOT really based on circulation, but on what the market is willing to pay.
