Falling Off A Cliff: Publishing circulation following revenue into the tank

The sky is falling. The days of sky-high newspaper circulation, anyway.  These numbers have always been pretty bogus, even the audited ones, and you can bet if the audit bureaus are showing steep drops in circulation, the real numbers are likely (at least) 10% greater still.  This isn’t totally unexpected, with the cutbacks that have been going on, and many publishers have been making (rightly so) targeted cutbacks on unpaid or very low paid circulation to save money.  But this has to sting, particularly at a time when struggling with ad revenues.  It’s got to be tough to hold the line on your rates when your circulation (advertiser’s potential exposure) is falling.

Here’s an analysis of the declines, but the part I find most interesting is a rather spirited discussion in the comments section about why newspaper websites can’t charge even decent rates for online ads.  I have a theory about this; it’s all in the numbers (an over-reliance on them, anyway.)  As questionable as print circulation figures typically are, readership numbers for websites are worse.  Sure it seems like a good idea to be able to track traffic and itemize every click to within an inch of its life, but in this case, it has turned out to be counter-productive.

Unique visitors, click through rates, page views, time spent online, etc all are numbers that can be misleading and can over and under-estimate your regular audience at the same time.  Basing your ad rates on these figures is, to put it mildly, quite completely insane.  For one thing, the results of advertising for the customer are not so easily quantifiable as the number of people who click on your ad.  And just because your web ad didn’t generate tons of click-throughs doesn’t mean that tons of people didn’t see it.

Unless your selling your old TV in a classified ad, advertising is not about instantaneous results; never has been.  A good advertising plan is about exposure and recognition, not immediate sales figures.  It’s always better to run ads consistently over a long period of time than it is to run once in a great while when you have something immediate to sell.  If, as a platform for advertising, we’re basing our rates on the number of people who actually call (or click) a given ad,  we’re screwed.

There’s a big push of late amongst media companies to enhance these mythical and largely pointless numbers to boost ad rates by incorporating technology that harvests personal data from web surfers, up to and including tracking other sites you visit, with the intent of using that information to further target ads to specific people.  While I find the notion of anyone harvesting my web surfing habits to help their bottom line appalling and a little frightening (Ever seen Minority Report?  The day they start using those iris scanner deals to transmit ads into a person’s brain is the day I move to a deserted island), it may be a moot point.  There’s already a much-needed push in congress to strengthen the rights of individuals in the face of this kind of egregious personal information collection that can put a serious damper on any such plans.  And well they should.

This whole mess illustrates something I believe is the biggest problem with publishing.  If you can’t quantify something clearly on a budget sheet, the decision makers see no value in it.  This is an industry that functions on many subtle levels of unquantifiable information.  The cutbacks to (almost) exclusively content producers is a result of this.  There is no clear way to equate a quality print product with revenue on a financial spreadsheet, so content and the people that produce it look like giant black holes of expense that bring nothing to the table.  That couldn’t be further from the truth, but try to explain that to a bean-counter exec who’s likely never even read said publication.  I have.  Trust me, it’s pretty frustrating.

Until we get away from this reliance on numbers, there won’t be much progress.  You simply can’t quantify what ad space is worth by siting page views, just like setting print ad rates based on raw circulation numbers is a losing game.  It’s not that simple, and to do us undervalues advertising space on the web by a large margin, and puts print ad rates at further risk of decline.  Especially as print circulation continues to fall, due not just to the economy, but now the decline in product quality from all the cutbacks.

All of this is indicative of an industry in its death throes.  We’ve failed to adapt to changing circumstances, ignored serious competition to our great disservice, and now, finally faced with the reality of having to deal with the internet, we’ve continued to let others drive our decisions, and make mistake after mistake.  Numbers can be manipulated lots of different ways, some to our benefit, some not, but they are far from a certainty.  To attach something as basic as ad rates to them is suicidal.  But based on the continuing stream of bad news and monstrous declines in the industry, you probably already knew that.

Published in: on October 27, 2009 at 5:52 pm  Leave a Comment  
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