Evolv­ing Au­dit Bureaus

By Steve Chap­man, Se­nior Di­rec­tor Global Con­tent Part­ner­ships

The Insider - - CONTENT -

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Over a cen­tury ago, the Au­dit Bureau of Cir­cu­la­tion (ABC) was founded in the US to in­still trust and trans­parency be­tween pub­lish­ers and ad­ver­tis­ers in the print me­dia mar­ket. And while ABC’s goals were hon­or­able, the re­sults did not live up to the au­dit bureau’s in­ten­tions, or stake­hold­ers’ ex­pec­ta­tions. Cir­cu­la­tion ended up driv­ing pub­lish­ers to print more copies than would ever get read in their ef­forts to raise ad­ver­tis­ing rates to cover their high costs.

Back in that hey­day of print, the pub­lisher-ad­ver­tiser power fun­nel tipped in fa­vor of pub­lish­ers who could in­crease their cir­cu­la­tion num­bers through bulk dis­tri­bu­tion to news­stands, ho­tel rooms, News­pa­pers in Ed­u­ca­tion (NIE) pro­grams, airport gate, etc. And de­spite the au­dits per­formed by ABC to try and val­i­date those bulk or­ders, ad­ver­tis­ers started to lose trust in the num­bers, cre­at­ing a grow­ing chasm be­tween them­selves and those who con­trolled the in­ven­tory.

That fren­emy re­la­tion­ship con­tin­ued for many decades un­til the dig­i­tal revo­lu­tion hit the in­dus­try like a sledge­ham­mer. In an in­ter­net minute things started to take a dra­matic turn. As ad­ver­tis­ers’ blin­ders were re­moved and the prom­ise of true trans­parency be­came a re­al­ity, a com­plete in­ver­sion of the pub­lisher-ad­ver­tiser power fun­nel started to take shape.

To­day, the buy­ers are call­ing the shots and they’ve made it very clear that un­ver­i­fied cir­cu­la­tion num­bers, du­bi­ous dig­i­tal sub­scrip­tion data, unique page views and ad­ver­tis­ing rates, gov­erned by ar­chaic print mod­els retro­fit­ted for a dig­i­tal uni­verse, are not go­ing to cut it any­more.

Mean­while, pub­lish­ers are pay­ing the price for greedy ad­ver­tis­ers’ as­saults on read­ers with in­va­sive, poor qual­ity ads that gob­ble up mo­bile data and sig­nif­i­cantly im­pact their dig­i­tal read­ing ex­pe­ri­ence.

What should have been a tran­si­tion to a more trans­par­ent and trust­ing re­la­tion­ship be­tween pub­lish­ers, read­ers and ad­ver­tis­ers turned into an ad block­ing nightmare, not just in the US, but world­wide.

There’s more than one way to pay pub­lish­ers

And this is just the be­gin­ning. In the next five years, ad block­ers are ex­pected to cost pub­lish­ers US$27 bil­lion in lost rev­enues.

Ad block­ing didn’t hap­pen be­cause read­ers don’t want ads. The “Vogue Ef­fect” in mag­a­zines proves that qual­ity ad­ver­tis­ing does at­tract and re­tain the at­ten­tion of read­ers. What peo­ple don’t want is ad­ver­tis­ing that abuses their per­sonal data and their life on the web.

But there is hope. If pub­lish­ers, ad­ver­tis­ers and plat­form providers work to­gether and put the cus­tomer in the cen­ter of their busi­nesses they can cre­ate a new fu­ture that is sus­tain­able and prof­itable for all. There’s an old say­ing, “There is more than one way to skin a cat”, and the same is true in fund­ing pub­lish­ing. Ad­ver­tis­ing rev­enue is just one form of fund­ing; sub­si­dies are an­other and then there are…

Pay­ing with data

• Snapchat doesn’t pay pub­lish­ers a dime for their con­tent; they pay them through the data that pub­lish­ers col­lect through tags that show what a per­son is read­ing, how long they’re spend­ing with the con­tent, the ap­prox­i­mate age range and de­mo­graphic of the user etc. – high value data they can then mar­ket to ad­ver­tis­ers to help them bet­ter tar­get ad­ver­tis­ing on be­half of their brands.

Pay­ing with au­di­ence

• For dis­trib­u­tors with mas­sive and grow­ing au­di­ences through chan­nel part­ners (e.g. ho­tels, air­lines, Telco’s, li­braries, etc.) pub­lish­ers can get ex­po­sure with peo­ple they could not nor­mally reach on their own. The au­di­ence be­comes the cur­rency in this model.

Pay­ing li­cense fees

• Most dis­tri­bu­tion part­ners use some form of rev­enue share with pub­lish­ers based on read­er­ship, but more and more we’re see­ing pub­lish­ers look­ing for dis­trib­u­tors to pay a flat fee for un­lim­ited dis­tri­bu­tion rights.

Pay­ing through gifted ac­cess

• In this new model ad­ver­tis­ers spon­sor ac­cess to a spe­cific is­sue of a mag­a­zine or full plat­form ac­cess for a pre­de­ter­mined num­ber of read­ers. Through this model, pub­lish­ers are paid a share of the ad­ver­tiser’s spon­sor­ship fee and also en­joy the added ben­e­fit of in­creased cir­cu­la­tion and au­di­ence reach as a re­sult.

Pub­lish­ers pay­ing to play

• This is the Snapchat model again where pub­lish­ers pay to have their con­tent dis­trib­uted through the plat­form through guar­an­teed ad rev­enue min­i­mums from pub­lish­ers.

Th­ese are just a few of the ways pub­lish­ers are com­pen­sated for their con­tent be­yond ad­ver­tis­ing. Now you may won­der why they are be­ing dis­cussed in an ar­ti­cle about au­dited cir­cu­la­tion. Well, pay­ment mod­els and au­dited cir­cu­la­tion go hand in hand; and if they don’t, they should.

To max­i­mize reach and rev­enues new forms of mone­ti­za­tion are con­tin­u­ally be­ing in­tro­duced into the in­dus­try and au­dit bureaus need to be able to adapt its rules to in­clude and align them with new ways of mea­sur­ing en­gage­ment.

Where do we go from here?

Pub­lish­ers, dis­trib­u­tors and ad­ver­tis­ers need to work very closely with the au­dit bureaus to help them to evolve so the re­la­tion­ship be­tween pub­lish­ers, dis­trib­u­tors, ad­ver­tis­ers and read­ers be­comes a win­ning propo­si­tion for all.

The first step is in­clud­ing en­gage­ment as an ad­di­tional met­ric to paid con­sump­tion – a fluc­tu­at­ing value that grows and shrinks based on the time spent, ar­ti­cles read or pages browsed for each reader.

Is­sues such as du­pli­ca­tion need to be bet­ter ad­dressed. With the mul­ti­tude of de­vices in the hands of read­ers, the chances of count­ing con­sump­tion for a sin­gle user more than once is a very real prob­lem. More so­phis­ti­cated de-dup­ing al­go­rithms are avail­able in the con­sumer space as users are reg­is­tered and tracked fairly eas­ily.

In the past, if a pub­lisher sold 10 copies of a printed mag­a­zine or news­pa­per to a ho­tel and 100 peo­ple read it, they’d only be paid for 10. To­day, if 100 unique peo­ple read is­sues on­line, pub­lish­ers get paid at least 100 times. So even though the abil­ity for dis­trib­u­tors to prove that it’s not the same dig­i­tal reader is prob­lem­atic, the en­gage­ment level is likely higher be­cause of the type of en­vi­ron­ments they’re in.

But not all au­dit bureaus take into ac­count th­ese high en­gage­ment en­vi­ron­ments. For ex­am­ple, Aus­tralia just ap­proved the dig­i­tal count­ing of is­sues in ho­tels and air­lines. The move came about as a re­sult of a trial per­formed with a ma­jor Aus­tralian mag­a­zine pub­lisher, the AMAA (Aus­tralia) and PressReader, that demon­strated th­ese busi­ness’ val­ues, not just to pub­lish­ers, but ad­ver­tis­ers as well.

It’s not easy en­sur­ing that proper ac­count­ing is done for print, dig­i­tal edi­tion, web and app con­sump­tion, es­pe­cially with all the dif­fer­ent bun­dles pub­lish­ers are now sell­ing. And com­pen­sat­ing pub­lish­ers the cor­rect amount, within the re­quired time frames by coun­try, is also a chal­lenge for global dis­trib­u­tors. But it is manda­tory that the in­dus­try start to ex­cel at this soon so that the power strug­gle trans­forms into a sym­bi­otic part­ner­ship be­tween all stake­hold­ers in the pub­lish­ing sup­ply chain.

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