ED KELLYPresident and CEOAmerican Express Publishing Company
P3 Partnership in Print Production LuncheonOctober 20, 2005New York, NY I appreciate having the opportunity to update you today about the progress of the Magazine Marketing Coalition.
Having just returned from the American Magazine Conference, I am very happy to report that the coalition completed a very productive and successful first year -- with notable progress! We've seen terrific momentum in the ad community and in our own industry. But we have much more to accomplish in this multi-year initiative to improve the perception of the value of magazines in the media mix.
Today, I want to accomplish several things:
Quickly review the Coalition's goalsUpdate you on our positioning and strategyRun through the program elements of our initiative from our research to our strategyAnd share how we'll move forward - building from this past year to further our success!
Before I hit on all of the notes, I'm going to roll a video that was shown at the American Magazine Conference. It demonstrates the significant progress of the Coalition.
(Roll video)
As you can tell, it's been a busy and productive time since Jack Kliger, our newly-appointed chairman of the Magazine Publishers of America who heads Hachette Filipacchi Media, spoke to you about this initiative a year ago. As you saw in the video, our efforts have spanned advertising, events, PR, sales materials and training focusing on our unique ability to engage consumers in an age of interruption. And we generated a lot of buzz along the way as well as a few laughs. As I travel the agency world, the feedback has been very positive. We feel the campaign is reaching its target.
Before I talk about the program elements, I will briefly review our initial goals. As many of you already know, our objective is to get consumer magazines to a better place. We all know that magazines uniquely connect and move readers to action.
All magazines have their examples and testimonials that show our unique ability to connect with our readers. This engagement is real! We move our advertisers' products.
As an industry, we are focused on increasing our share of the advertising pie. What does that mean in dollars? A lot! For every one percent gain in share, this translates into an additional $1.3 billion in advertising revenue. That's a monumental increase!
When I presented and shared this information with Time Inc. - I explained that in mathematical terms this one percent bump in ad share equals 14,000 pages for the Time Inc. publications. That is a lot of paper. And a lot of money.
Our Coalition effort is supported by the Magazine Publishers of America - the MPA, 35 magazine companies (both large and small) and you -- our supplier partners!
Your executives are among the key decision makers who comprise the Coalition committee. Ann Marie Bushell of RR Donnelley, Jennifer Miller of SAPPI Fine Papers, and LH Puckett of International Paper serve on this committee with top publishing executives.
Our target audience is everyone associated with the magazine industry! This includes the media/marketing decision makers, the agency creative executives, the press and the employees of the magazine companies. I can't stress enough the importance of having everyone on the same page.
In terms of our positioning, we hired HotSpring, a marketing strategy firm, and found that while consumers exercise more "choice and control" -- advertising must evolve from an "age of interruption" to "an age of engagement". This is a real, tremendous opportunity for magazines!
Our research reiterated this. For example, the findings of a recent Roper study (2005), found that 48 percent of those surveyed felt "Advertising adds to my enjoyment of magazines," more so than any other medium (radio (36 percent) and it goes down from here -- cable TV (32 percent), network TV (32 percent), and the internet (21 percent). Magazines offer unique strengths - we deliver engaged reach and play an important role in improving accountability and advertiser ROI! With all of this understanding, we went to work!
1). First, we ran four executions of an unexpected advertising campaign that would be surprising, engaging and fun. Our strategy reinforced magazines delivering engaged reach in an age of interruption. The advertising launched in the print press: national newspapers and trade publications - in late February of this year by Fallon NY. I'm sure you have seen these ads. My personal favorite is the tub! Read On (is our tagline)!
Fallon has since closed their NY office. But the Coalition is close to choosing another agency and will be making an announcement soon.
2). Our second element was the Futuristic covers playing off the idea that magazines are here to stay for the long run! More than 40 magazines have run or plan to run the faux cover wraps by year-end illustrating this theme of the future. This example is a creative interpretation from Travel + Leisure Golf. This was very effective and a great way to engage the editorial and production teams in the mission. You have probably seen examples from other member companies.
3). The Guerilla marketing at the NBC and ABC upfronts created surprise, "awe" and lots of buzz! As you saw in the video, senior television executives entering the upfront presentations only to be greeted by engaged magazine readers, donning t-shirts that used their top shows to get our message across…. I’m “Lost” without my magazines…I’m “Desperate” for my magazines...” This was a playful and very effective effort.
4). And another element were a number of events and programs we had that reached thousands with Coalition messages. The events ranging from Magazine Days in ten markets to the ANA and 4As conferences, to National Magazine Award and Kelly Award luncheons. We produced Magazine Speak sales kits that encourage consistent and smart messaging for our sales and marketing teams
Our "Magazine Speak" is starting to pay off - although there is much more work still to be done! The leaders in the ad community are picking up our language. And at our own companies, it's starting to gain traction. At Travel + Leisure and at our other titles - we've incorporated this language into our sales presentations. And, in talking with my counterparts at the other publishing companies, I know this is an industry wide effort. The Coalition has also written articles and advertorials that have appeared in major trade titles championing our efforts.
We launched "Inside the Covers" an editor panel event, with the business magazines at the ANA Print Forum, and took it many steps further with Funnyman Jon Stewart at the Jazz at Lincoln Center. Stewart interviewed four editors-in chief: Jim Kelly of Time, Graydon Carter of Vanity Fair, Kate White of Cosmo, and Dave Zincenko of Men's Health on the subject of humor in magazines. And, it was funny, festive, and at times a little awkward, but we treated the industry to a wonderful evening! You might have read about this event in the press? It created a lot of exposure - that's for sure!
We have influenced the adoption of "engagement" as a major factor in advertising. In the last year, companies like Roper and Yankelovich and agencies like Starcomm and Mindshare have conducted research into advertising receptivity, finding that magazine advertising is more enjoyable and connects/engages more than that other media. And the ARF, 4As, and ANA have formed a group to explore how to measure engagement. Our effort has been influencing much-needed change in research metrics!
And speaking of engagement, as a result of all we're doing, the MPA's Web site, Magazine.org, has seen a 66% increase in traffic year-to-date while the READ ON site alone received 22,300 visitors in the 7 months since the campaign was launched! That's impressive momentum!
So if I was grading us, and remember this is an unprecedented effort, I'd give us high marks. But I'm not grading us. We initiated an independent TRACKING STUDY to do that! The first wave was conducted in February prior to the launch. The second wave was conducted in August. The study was conducted over the Internet to a random sample of agency and client executives. Approximately 300 people responded in each phase.
The findings are very encouraging. When asked, "Over the next two years, will your magazine share of advertising increase, decrease, or stay the same?" the number of respondents stating that they would increase spending rose 21% or 7 points - from 34%-41%.
To put this in context, the Internet was the only other medium to show growth, increasing 10% or 7 points from 73%-80%. This is not bad news. The Internet is not the enemy! Magazines are invested in interactive businesses and in companion web sites.
Conversely, television is in trouble. Even cable television showed decline. Those planning to increase their investment in Cable TV spending dropped 21% or 10 points - from 56% to 46%, while network TV was near the bottom of the chart, with only 15% stating that they would increase spending next year, down from 17% in February.
The positive growth in those planning to increase magazine spending was driven by the Coalition's message of engagement. The number of people who cite magazines as a medium whose audience is most engaged in advertising rose 15% or 5 points in the last six months from 33%-38%. Looking at the competitive landscape, again magazines and the Internet are on top of the heap. The Internet now garners 36% of the vote, while the belief that advertising in network TV is engaging declined 63% or 9 points -- from getting 23% of the vote to only 14%.
While many elements contributed to the more positive outlook for magazines, research showed that the futuristic advertising also played a positive role. When Affinity Research studied an issue of the Wall Street Journal, which carried one of the futuristic ads. Our half page ad tied for 6th place out of 22 ads, beating full-page ads - consumer product advertising that included financial services and automotive.
So the momentum is building! This year, we must continue to change attitudes while improving magazine advertising revenue!!
And, how can you help? The good news is that there are many opportunities and plenty of time for all of us to get involved by sharing ideas and coming up with creative concepts to reinforce and extend our "engagement" proposition! Remember, this is the beginning of a three-year campaign. We have a tremendous chance to make a difference and get our entire industry to a loftier place.
Support the program! I want you to share the excitement and tell your family and friends! Go back to your offices and share the excitement with your staffs!! We have our sales kits and some examples of the futuristic covers available to you as you leave today's luncheon. These takeaways will familiarize you with magazine speak.
The advertising is an essential part of the communications mix, but we must recognize that the industry sends out thousands of messages each day in the form in personal sales calls, presentations and promotional materials. So how we communicate through these channels and how consistent our messaging is critical. We are arranging our second sales summit in January to empower, excite, energize and engage our teams who are selling our medium, day in and day out -- who are getting our message out! We must "talk the talk" and "walk the walk!"
Just imagine the impact of thousands of sales people every day spreading our coalition message… one voice... one positive voice about the power of our medium... magazines engage like no other medium. At the end of the day, that's the goal, the real benefit of this Coalition!
With that in mind, I am now going to end my monologue by showing you an important message from two members of our Coalition Committee… Jack Haire (EVP, Time Inc.) and Greg Osberg (EVP, Worldwide Publisher, Newsweek), who originally spoke to more than 350 members of our initial selling summit last December through this video.
Let's take a look at this "Inspiring" video.
(Roll Jack Haire/Greg Osberg video)
Thank you for your partnership in this important endeavor.
Before I head off to Detroit to share my excitement about this campaign, I have a few moments to answer any questions you may have…
READ ON !!!!
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