Jack Kliger - Magazine Marketing Coalition Rally

February 15, 2006

Jack Kliger
President & CEO
Hachette Filipacchi Media U.S., Inc.
Chairman
Magazine Publishers of America

Second Annual Magazine Marketing Coalition Rally
McGraw Hill Building
New York, NY
February 15, 2006
 

Thank you, Edward, and good morning, everyone. 

I believe – having come from the ad sales side – that I know how hard your jobs are and you’re under a lot of pressure from all sides.  Clients are either cutting back their budgets or they’re shifting to other media and their demands just to maintain spending are bigger than ever – asking for product placement -- integrated marketing programs -- multiplatform ideas and all at lower rates. 

Remember the good old days?  We used to bitch a lot in the good old days.

Seriously, I’m aware that you’ve got your hands full.   But I want to underscore that you have good reason to take pride in your industry and look forward to a future with many opportunities.

We are in dynamic times, and there are a number of forces that are working to our advantage, mostly driven by our strong consumer relationships.

I’m going to touch on some issues that I think are important to the future of our industry.

I want to underscore what I believe are three priorities for our industry:

First we must ensure our credibility not only with readers but with advertisers.

Second, we've got to overhaul our audience measurement system to be more timely and comparable to other media audiences and their accumulation. 

And third,  we must utilize the new developments in technology to:

1. create and distribute our content

2. streamline and simplify the buying and selling process

3. And, speed up and improve our measurement systems.

Let’s start with credibility.

More than any other medium, readers trust magazines - our editorial and our advertising.  That trust is our biggest asset, and our editorial integrity and objectivity are essential to preserving it.

And nothing would damage that trust more than to make a business of product placement,  blurring the boundaries between editorial and commercial messages so that readers can't distinguish one from another.

I’ve said this before and I’ll repeat it.   Product placement is a solution to a problem our medium doesn’t have. TiVO and remote-control zapping have enabled TV viewers to avoid commercials.  .  .  . but advertising in magazines is not an interruption.  Magazines haven’t been shown to have a commercial-avoidance issue actually, quite the opposite.  Numerous studies have shown that magazine readers value the advertising in our pages and view it as a part of the content.  Magazines are on the right side of the engagement issue which is so essential to our USP and we need to make sure to protect against practices that weaken that attribute.

But, as important as it is for readers to trust our editorial content, it is equally important for advertisers to trust what we claim about our circulation.  Our integrity as businesspeople is at stake. And we have to earn advertisers' trust through actions, not words.  That means publishers must act on the industry's commitment to follow “the highest standards of circulation reporting.”

Practices that are unacceptable in any other field should certainly not be tolerated in ours.   My dad once had a restaurant and he told me:  If you won’t eat something that tastes terrible, then don't feed it to your customers. They won't come back.

We need to embrace and not resist – transparency in circulation reporting. Each of our companies needs to take a hard look at its circulation policies and eliminate anything that has even the potential for being misleading.  

Simply put, no magazine company should claim that someone got a copy who didn’t, that someone paid for a copy who hasn’t, or that anyone paid more for a copy than he or she actually did.

At the same time, how we measure our readership is a different issue.

You’ll continue to hear about readership and audience measurement in other forums.  In order to compete with other media, magazines need faster and more comparable audience measurement and measurements that makes the connection between readership and distribution.  We have to start thinking and talking more in terms of audience and readership, not just circulation and distribution.  If magazines are to compete on advertising effectiveness measurement, the metrics must be based on our audience as all other media are measured.

This is an area where this group doesn’t necessarily have much control.   Yet, I want to assure you that the heads of your companies, along with the MPA and key players in the research field, are working to make improvements in the timeliness and comparability of magazine audience measurement. 

Again, for magazine audience measurement to be truly connected to advertising-effectiveness measurement and ROI, it must include all of our readers – and this means both paid and non-paid sources. 

MRI data shows that in 2005, 24% of magazine reading was done in public places, up from 14% in the last 10 years.  And the same 24% of our insert card subscriptions came from public place copies.   A number of studies show that the magazines read in public places – such as medical offices, hair salons, and fitness centers – bring substantial readership and return to the advertiser.

Research has consistently shown that the quality of engagement with a reader is not determined by how much – or whether – he or she paid for the magazine, or by the circulation source. 

I ask you to learn to passionately and effectively tell the story of your magazine’s audience and that you include all sources.  There’s nothing in public place readership that should make you defensive……and using another magazines public place as an example of weakness is a very self destructive act to our business.

For my third point, I’m going to turn to technology. So please, put away your Blackberries and listen up.

Technology really has the power to recharge our industry.

You know that today’s consumers have more control than ever over what information and entertainment they receive, as well as when, where and how they receive it. 

In this content-hungry environment, magazines have some real advantages. We have always operated from the perspective that the consumer is in control, so today's greater media interactivity is nothing threatening to us.  Magazines create trusted, branded content – the kind consumers keep coming back to, even in a world with near-infinite media choices and as time compression continues, the role of editors will be more important than ever.

We are beginning to see how we can use technology to build new, engaged consumer relationships – particularly with young, tech-savvy consumers.  It’s not only opening a gateway to new distribution platforms, it’s making it faster and cheaper to create printed magazines of a higher quality than ever.

Not only is technology helping us produce and distribute our magazines faster it’s also enabling the development of new processes that will simplify and speed up the advertising buying process.   E-business is an important area where magazines can create a faster more profitable advertising model, and we need to push on it to make your jobs easier and more buyer friendly.  We owe that to our readers, our advertisers and to our sales staffs. 

So where do we need to go?

1. We need to protect the trust and credibility we've built with our readers by preserving the boundary between editorial and commercial messages.

2. We have to weed out misleading circulation practices that endanger our credibility with advertisers. 

3. We must develop metrics that connect distribution – paid and non-paid - to audience metrics.

4. And we need to embrace technology as a full partner in our efforts to develop new and better products, new distribution channels, and new systems that make it faster and easier for advertisers to do business with us.

You can be proud of the industry that you’re in and in the products that we produce.  Those of you who have worked with me – or sold against me, in some cases – know that’s I’m passionate about magazines.

I feel that excitement and commitment more than ever.  We are redefining the word magazine to mean more than just content on paper.   Magazine means excellent and trusted content delivered to you in formats that fit your lifestyle and needs.

You are in the business at an exciting and dynamic time.  I implore you to learn to be as effective in marketing your medium as you are in marketing your title.

Thank you.