MPA Speeches--Jack Kliger AMC 2005

October 17, 2005

Jack Kliger
President & CEO
Hachette Filipacchi Media U.S.
Incoming MPA Chair

American Magazine Conference 2005
October 17, 2005
Fajardo, Puerto Rico

Thank you, Nina, for that introduction and for the fine work you’ve done as president and CEO of the MPA.

I’d also like to take this opportunity to thank you, Tom, for serving our industry with such dignity and credibility these past two years as chairman.  You always demonstrated your personal commitment to openly and forthrightly airing our issues and I’ve enjoyed working with you as vice chairman.

Everyone in this room knows that the magazine industry is facing some immense challenges…and complacency is really not an option now.

I believe we must market our medium as never before, and we must change procedures, and perceptions and re-invigorate our value proposition.

We are looking at a fluctuating media landscape, and this can be a good situation for us. Those fortress walls of television advertising are crumbling, and if we evolve to take advantage of this change, we will benefit individually and collectively.  By breaking free of outdated practices at this most precipitous time, we will move forward into this new landscape as a unified entity.

It is my honor to accept the position of chairman of the MPA for the next 2 years.  I’ve been in this business for most of my professional life, and I feel passionately about it, and I am committed to doing what we need to do to stay healthy and vibrant.

During the next two years, there are five key issues I would like us to focus on as an industry.

First, to maintain the editorial integrity so essential to achieving the credibility that is our major point of distinction to consumers and advertisers.

Second, to continue work as an industry on distribution issues, particularly on postal reform.

Third, to work together to aggressively market our medium to advertisers.

Fourth, to create more timely forms of audience measurement to make magazines more comparable to other media in metrics related to advertising effectiveness and ROI.

And finally, to use technology to not only improve measurement, and  leverage our brands and content onto screen-based platforms, but to use technology to make it easier for our advertisers to do business with us. 

My first point regarding editorial integrity…

Product placement in our editorial pages has been called integration, but I believe it can only lead to dis-integration of credibility – both ours and our advertisers: with readers.

Nothing could be more damaging to our position as the medium consumers trust most, both in editorial and advertising, than blurring the readers’ ability to know the difference between an editorial and commercial message.

We are committed to promoting magazines as THE engagement medium, and we should recognize the danger that product placement represents to our basic premise. Product placement is an advertising solution driven by commercial avoidance on television. 

Countless studies show that readers like the advertising in our pages. We know that readers don’t avoid the ads in magazines.  In fact, they value them. As Erwin Ephron has said about product placement…  “If you notice, it’s bad.  But if you don’t it’s worthless”.  

Point 2…we have a number of distribution challenges which we must continue to address and we must stay focused on the issue of postal reform. We have come together when there was no alternative but to act as an industry in working on government affairs, particularly on postal issues, and it has been effective. 

Not as effective as we’d like, but we have made substantial progress and we must stay committed to achieving true postal reform in order for our industry to manage our costs going forward.

Point 3, the magazine coalition strategy to market our medium to advertisers was overdue and essential for our industry’s health.

The concept that magazines are the best medium for consumer engagement is at the core of the Magazine Coalition campaign.  Again, we have no choice but to work together …..as an industry….and present a unified effort to gain advertising share for magazines.

Engagement is emerging as a key currency for advertising value and we must seize the opportunity to prove that magazines are best at delivering engaged consumers to our advertisers.  We have to carry the message in every conversation – on every sales call – and in our coalition campaign.  And we all have to commit to being part of that effort on an ongoing basis.

The buying-selling dynamic between magazines and advertisers has effectively kept us in a closed community where we compete primarily against each other.

But to get into the bigger game, we have to act boldly and decisively on two fronts: 

To continue to market our medium strongly.

AND we have to demonstrate that advertising in magazines improves advertising effectiveness and boosts ROI.

This brings me to point #4.

If we expect to capitalize on our engagement advantage, then our audiences must be measured on a timelier basis that is more comparable to audiences of other media.  Every medium is being challenged for more accuracy to some degree. 

Paid circulation rate-base guarantees are a legacy of an era that predates modern audience measurement metrics.  Circulation-based metrics are irrelevant in calculating advertising ROI. And our current system has encouraged business practices that are not beneficial for publishers or for advertisers.

Too many of our resources are focused on efficiently achieving an average paid circulation rate-base guarantee…rather than focusing on distribution profitability and readership development.  This focus has led to inefficient practices and missed opportunities.  These are symptoms that suggest an illness in the system, and we have to change the system.

The fact that our metrics aren’t comparable to those of other media puts us at a clear disadvantage. Everyone else deals in audience; we deal in circulation. 

Distribution measures should not and will not go away.  Net distribution -- of which paid circulation is a part-- but not the only part-- provides a necessary and valuable tool for measuring readership.

Why should an advertiser care whether a magazine copy is paid or unpaid—or how much, or by whom—if it delivers engaged readers who are appropriate targets for their products?

Let’s evolve to a system of measurement that shows the connection between net distribution and readership more effectively.  The recently announced Audience Measurement Initiative—a program established by the 4As, ARF, and ANA to examine measurement in all media, is a move we applaud and should support.  And, we want to insure that magazines are a part of that evaluation from the beginning. 

And, as we look ahead, technology offers us many great opportunities as well as challenges.

We are producers of branded content who’ve mastered one platform and now have an opportunity to transition to others. We are positioned to extend our reach and build new, engaged consumer relationships—particularly with the younger consumers.

Technology gives us the ability to measure distribution and audiences faster, and to create new products for a screen-base culture. But technology also gives us the means to make it faster and more cost effective to order, to place and to pay for magazine advertising.  The IDEAlliance is taking a lead in the effort to reduce the process cost of advertising in our magazines, and I believe our industry should make it a priority to streamline the magazine advertising buying process.

So what’s the bottom line on where we need to go over the next two years? 

We need to protect the trust and credibility we’ve built with our readers and the engagement advantage of magazines for advertisers by preserving the boundary between editorial and commercial messages.

We need to commit as an industry to a continuing effort to achieving postal reform and to an ongoing effort to market the medium to advertisers as effectively as we market our own brands.  

We need to develop a system which better connects our distribution and audience so we can measure our readership in a more timely and comparable way and fully participate in the discussion of advertising effectiveness and ROI. 

And we need to utilize technology as an accomplice to better measurement, to create new products and to making it easier and faster for advertisers to do business with magazines.

So having said all this about the world we operate in and the issues facing us, I must add that I don’t think that human nature has changed all that much throughout history.  

We have evolved from the time when cavemen drew their stories on walls, rocks and trees.  They could look at their drawings by firelight (once they discovered fire) and discuss them as a group (once they invented speech) to share their experiences.

Communication was enhanced and better understood by every step of development.

The modern world has made it possible to take the pictures and stories off the walls…and now all manner of communications devices can be held in your hands and speed you through your day.

They beep, and ring and vibrate and buzz at us…yet no matter how many devices distract us, magazines remain an invited companion and a one-to-one form of communication that human beings want and need.  Cave drawings have evolved.  We’re not cavemen – most of us smell better for one thing – but our industry too must evolve.

Clearly, some things do need to be changed. But the basic premise of magazines is, in many ways, more relevant today than ever.

Is there a lot of work to do?  Yes – absolutely.  But there has never been a better time to commit to doing it.  We have a great deal of talent in our industry and by united action, we will move through this new landscape with great success.

I pledge my full and best effort to doing so.  We will need your best efforts too.  Together, I believe we will pilot this industry to a profitable and dynamic future.

Thank you.