Are Print Ads More Valuable Than Online? It Depends

Given the number of "studies" I've seen that claim to show the "superiority" of print over online, I've gotten a sense of desperation on the part of publishers. (And given their financial results and dropping ad revenue, no wonder.) The latest has some interesting data:

Among Web users, nearly two-thirds (63%) of banner ads were not seen. Respondents' eyes "passed over" 37% of the Internet ads and "stopped" on slightly less than a third, McPheters & Co. found.

In contrast to online ads, TV and magazine ads generated a strong propensity to be seen and recalled. Full-page, four-color magazine ads were determined to have 83% of the value of a 30-second television commercial, while a typical Internet banner ad has 16% of the value.

Here are the major findings from the press release issued by the market research firm that undertook the study:

• Within a half hour, magazines effectively delivered more than twice the number of ad impressions as TV and more than 6 times those delivered online.
  
• Though TV doesn't deliver as many ads per half hour as do magazines, net recall of TV ads was almost twice that of magazine ads; magazines in turn had ad recall almost three times that of Internet banner ads.


• 85% of Internet ads served appeared on-screen and could be identified by brand.


• Among web users, 63% of banner ads were not seen. Respondents' eyes passed over 37% of the Internet ads and stopped on slightly less than a third.


• For Internet ads, almost all net recall could be attributed to ads that were seen.


• Internet video ads appeared much less frequently than banner ads, and their exposure skewed heavily towards young men. When they did appear they were twice as likely to be seen as banner ads.

In my experience I definitely avoid looking at banner ads. But there are some enormous suppositions and biases here:

• The report does mention online vehicles other than banner ads, but only mentions video ads as appearing less frequently than banner ads and skewing heavily toward young men. But that is one of the most desired demographics for marketers. And, apparently, it didn't seem to measure text ads, which are surely the most prevelant form of online marketing today.


• Recalling an ad is not necessarily the same as ad effectiveness. Consider the famous example of the hilarious Alka Seltzer ad series from the sixties. They had huge recall, but the company dropped them because no one remembered the product, just the humor. Also, if you find an ad irritating, is there any transference of that feeling toward the manufacturer?


• Although it may be in the study, I don't see any mention of the intent of the ad. Was it meant to sell product? Recall doesn't show whether people buy, or even if they become more inclined to favor the mentioned brand.


• Where is the audience spending its time? Even if magazine and television ads are more effective in a more extensive way than recall, is that the medium that consumers prefer to consume? If they read news and watch video online, then placing ads in print and on television starts reaching a smaller audience.


• That last point has another implication: cost. Print and television ads cost more to run than online ads. So how much does it cost to acquire and maintain a customer? That must be part of the equation, particularly when budgets are constrained.

And now for the really big point, in my opinion. Conde Nast and CBS Vision (described by CBS as a new research initiative to explore changes and opportunities in the media marketplace) sponsored the study. I've generally found that sponsored studies almost always mean that the results are only released when they support the underlying goals of the corporate sponsors. For example, can you imagine a drug company backing a study showing that a cheap alternative to an expensive prescription medicine was superior?

But publishers and broadcasters all claim to be interested in online as a medium. (Disclosure: I cover high tech for BNET, which is owned by CBS Interactive.) But this clearly delivers the impression that the sponsors are interested in having older media -- which deliver more ad revenue and profit -- shown to be superior to online. In other words, it's the old dog at the media companies trying to kill off the upstart medium, with the Internet still a business toddler compared to print and broadcast. How are the media companies ever going to make the transition they say is coming if they do everything in their power to defeat it? This is why tech companies like Google and Amazon, which are big in online advertising and media, are likely to be the real winners in the media wars. They aren't spending significant resources and time trying to debunk the very businesses they say they are anxious to establish.

Money and Blogging

Dan Lyons write a piece in Newsweek about how you can't make money with a blog. The money may be small if you're trying to collect advertising dollars, but there is a different way to look at it. I'd strongly suggest reading How I made over $2 million with this blog by Dave Winer. He's no con or shill. Ever hear of RSS? He invented it. He's been a major Mac software developer, a research fellow at Harvard, and general tech heavyweight who has also made his share of cash along the way. Winer's been blogging for years and understands this medium like few others. His point is that he's made a large pile of cash indirectly because of his blog, and because that's how he wanted to talk to his customers. It's worth the read.

One More Point on an Ad Slowdown

BusinessWeek had an excellent point the other day: ad sales slow down in advance of magazine publication. Sometimes the ads sell well before issues close, particularly with larger (read as more important) advertisers that buy on frequency-based contracts. Getting assignments today only means that there are enough ads to cover the issue coming out in a month or two. Where the real issue is likely to arise is mid-November to December, when publications are now considering February or later. That's when a big slowdown in ad spending is more likely to begin, and that would trigger making magazines smaller and, therefore, reducing the number of editorial pages.

How the dollars flow—or rather don't flow—in any downturn can shape events in ways obscured until much later. As strange as it sounds today, the tech bust that started in 2000 meant that total dollars spent on online display advertising declined 21% between 2001 and 2002. And as strange as it sounds today, many established media organizations used that decline as a rationale for deemphasizing the Web in favor of their traditional businesses—and underinvestment allowed all manner of Web-only startups to outflank them in the one medium that's still growing. While online display ads will still be up in '09, says BMO Capital Markets analyst Leland Westerfield, that growth rate will likely slow. Look for search advertising to hold up, so Google should be hurt the least.

In other words, the reaction to a business slowdown sometimes takes some time to manifest. Don't expect the web to escape, though given the more favorable economics (no paying for paper or print) it could be that publishers will emphasize online even more than they are now. One analyst is predicting a 5.5 percent pullback in ad spending, which is worse than it sounds because markets expect business to increase, so the perceived drop from expectations could run closer to 10 percent, causing executives to worry (stock performance being seen as a reflection of their efforts) and cut expenses even more.

There's nothing you can do about ad slowdowns themselves. Just look for alternative work or sectors that aren't likely to be hit as hard. The main thing is to start pushing now to find alternatives. If you know that things might slow down more significantly in a couple of months, that gives you some time to react.

Magazine Ad Trends: Products Advertised Equals Topics Covered

There's an old trick in the magazine business: if you want advertisers, then cover them editorially. I don't mean the ethically-challenged tit for tat we've all seen some publishers indulge. In this case, there's a more natural and obvious connection. If you never mention consumer electronics in your publication, then it becomes harder for ad salespeople to interest consumer electronics companies to advertise:

Ad salesperson: "This is really a great publication for you to reach your customers."

Corporate ad buyer: "But we sell nutritional supplements for older people and you have a magazine for kids. What interest are they going to have in geriatric products?"

Ad salesperson: "Ah, but one day they're going to be older, and think of all the mind share you would have built!"

Tough to make the sale if you can't show the natural interest. That's why you should take a look at this article from Crain's New York Business, which discusses the general state of magazine ads and which categories are up and down in the first quarter of this year as compared to the same time last year:

For the entire industry, rate-card-reported advertising revenue, which does not reflect discounting, came in at $5.2 billion, down 1.2% from the previous year. Ad pages—generally considered the more reliable industry bell weather—fell 6.4%, to 49,167.

The top advertising categories that actually showed growth were retail; transportation, hotels and resorts; financial and real estate; and food. "The category that includes the likes of Kraft’s macaroni and cheese and Lay’s potato chips almost single-handedly held up the magazine industry in the first quarter, according to numbers released Monday by the Publishers Information Bureau of the Magazine Publishers of America."

The categories getting hammered were led by automotive, which is no surprise in the combination of economic downturn and tightening credit market. It dropped 17 percent. Home furnishings and supplies lost 12%. The reporting is based on numbers from Publishers Information Bureau of the Magazine Publishers of America.

You might also check the numbers for how individual magazine titles did. Some of the big winners were All You, Backpacker, Cookie, Ducks Unlimited, Every Day with Rachel Ray, Family Fun, Field and Stream, Medizine Healthy Living, OK Weekly, Quick and Simple, ReadyMade, Remedy, Ser Padres, Transworld Snowboarding, Womens Health, Wondertime, and Relish.

Some of the big losers: ABA Journal, Auto Week, Boating, Businessweek, Coastal Living, Cycle World, Endless Vacation, Entertainment Weekly, Fortune Small Business, Golf for Women, Gourmet, Hemispheres, Kiplingers Personal Finance, Motorboating, National Journal, Reader's Digest, Rolling Stone, Scientific American, Tennis, US News & World Report, and the Los Angeles Times Magazine.

A caveat: these are all based on rate cards. But discounting is common, and there's no telling for sure whether the magazines that had gone up might have effectively dropped their price. (However, generally when you're selling a lot of ads, you don't have to drop rates so much.)

Newspaper Ad Revenue Takes a Tumble

If you like newspapers as a market, this is grim. The Newspaper Association of America reported that total print advertising was down 9.4 percent from 2006 to 2007, according to this report in Editor & Publisher. If you include online revenue the drop was 7.9 percent. That is not good, because the newspaper business is clearly related to that of magazines, so think of this as an early warning. And while online ads went from 5.7 percent to 7.5 percent of total newspaper revenue, growth is slowing:

There are signs that online revenue is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006. In 2006, online ad revenue had soared 31.4% to $2.6 billion. In 2005, it jumped 31.4% to $2 billion.

As newspaper Web sites generate more advertising revenue, the growth rate naturally slows.

It is true that growth rates will, eventually, slow as the pot gets bigger. However, when online advertising is jumping by 20 percent according to Jupiter Media, you really don't want to see newspapers lagging behind.

NFL Forces Photographers to Wear Product Logos

Although I wrote about this on my FotoCounty blog, I thought it might be of passing interest to professional journalists. The National Football League is forcing photographers who are covering NFL games to wear vests with a couple of corporate logos on them. Apparently it's not unheard of in the sports world to turn photojournalists into billboards. Here's the link to what I wrote. If they can get away with that with photographers, why not require writers to also don special gear?

When Pressured by Ad Department, Editor Leaves

According to a C/Net story, PC World editor Harry McCracken said that he had to get crackin' and left the magazine where he had worked for a dozen years. According to the story, he moved on because a senior vice president kept pressuring him to pass on stories that were critical of advertisers. For those writers who think that there is always an impenetrable wall between editorial and advertising, all I can say is ... wanna buy a bridge? Small bills only, please.

I can remember in the late 90s writing a piece for a major technology magazine. When I finished the draft and talked about it with an editor, I heard a lot of concern that my article wasn't complimentary enough to what turned out to be a class of advertiser the magazine wanted to approach. They ended up radically changing the article to make the advertisers happy.

In such a situation, there are only a few things you can do. Have your byline removed from the article if possible, and be sure never work for the publication again. And I think this is one of the few situations where you should become confrontational with the editors. Those who have talked to me about negotiation strategies know that I almost never suggest this, but there are principles involved and nothing to lose. Sure, they might go elsewhere and cause problems at another publication if you show up. But while lots of people note how small the publishing world is, remember that it's also pretty big. Maintaining your business is important, but there do come times that you have to stand up for yourself and for what is right, if for no other reason than backing down can sit with you for an awfully long time - like the rest of your life. And what business client or contact is worth that?