2. 2
What Should We Expect?
Before we explore reasons why Print ROI may not be
accurately pricked up with econometric modeling methods
we should ask whether we expect Print ROI to be lower
than other media, or to have eroded over the past few
years of media innovation?
3. 3
Year Total
1997 18,047
2007 19,532
Number of Magazines 1997 vs. 2007
8% increase
*Source: MRI Fall, 2007, National Directory of Magazines, 2008, Oxbridge Communications
Distribution Has Increased
4. 4
Despite the enormity of media options, readership and the # of monthly
issues have both increased since 2003
Furthermore, an amazing consistency in coverage is apparent: 85% of
all adults read magazines!
Magazine Readers (000) 2003 2007
Adults 18+ 178,391 187,398
Index to 2003 100 105
Average Issues/Month 2003 2007
Adults 18+ 10.9 11.5
Index to 2003 100 106
Coverage 2003 2007
Adults 18+ 85% 85%
Index to 2003 100 100
And People Are Reading Them!
*Source: MRI Fall Studies, 2003 & 2007
5. 5
In defiance of the industry-wide trend of aversion toward advertising, readers of
magazines actually report an accepting opinion of advertising
• Magazines’ score more than doubles that of online!
Attitude Toward Magazine Advertising Positive
30%
46%
52%
61%
0% 10% 20% 30% 40% 50% 60% 70%
Internet
Radio
TV
Magazines
Percentage of respondents answering “very/somewhat positive” in their attitude toward advertising...
*Source: Dynamic Logic AdReaction 4, 2005
6. 6
Ads are such an integral and expected part of the magazine experience that they
rarely prevent a reader from enjoying the content within its pages
62%
55%
51%
49%
28%
0%
10%
20%
30%
40%
50%
60%
70%
Watching
Network TV
Watching
Cable TV
Listening to
Radio
Accessing the
Internet
Reading
Magazines
“For which of the following would you say advertising gets in the way of you enjoying...”
Magazines Ads Are Not Disruptive
*Source: Roper Public Affairs
7. 7
...And Least Annoying
24%
53%
66%
0% 10% 20% 30% 40% 50% 60% 70%
Internet/Online Ads
Television
Commercials
Magazine Ads
*Source: 2006 Hearst/Roper Magazine Engagement Study
“Which advertisements do you find to be the most annoying...”
Again, consumers can look at magazine ads on their own terms; they aren’t bombarded
like they are when watching television or when online
8. 8
The ability to provide contextually relevant advertising enhances the experience a reader
may have with a magazine
• For instance, fashion advertisements provide a means of assessing styles and available
accessories when placed within a fashion/beauty title
Magazine Ads Provide Enjoyment...
48%
36%
32% 32%
21%
0%
10%
20%
30%
40%
50%
60%
Reading
Magazines
Listening to
Radio
Watching
Cable TV
Watching
Network TV
Using the
Internet
“Advertising adds to my enjoyment of the following...”
*Source: Roper Public Affairs
9. 9
Advertising within a magazine ensures that the target audience has a greater propensity
to view a brand’s message and not instantly “tune out.”
...And Thus Are Least Likely To Be Avoided
“I am least likely to avoid the advertisements within the following media...”
*Source: 2006 Hearst/Roper Magazine Engagement Study
30%
46%
52%
61%
0%
10%
20%
30%
40%
50%
60%
70%
Internet Radio TV Magazines
10. 10
Declining Print ROI May Be A Modeling Issue Then
There are a few main reasons why econometric methods
may not accurately measure print (or any media’s) ROI:
• Data quality of print impressions not reflecting actual delivery of
medium
• Models are built to explain short term “aggregate” sales where
print may have a different role
• Media scheduling creates “multicollinearity” or difficulty in
distinguishing between media that are “on at the same time”
11. 11
Data Quality And Specification For Modeling
Models are highly data dependent and the data has to be specified in
such a way that it accurately represents the actual delivery or
consumption of the media.
For print, where there is:
• a reach build that continues for several weeks after initial publication,
• a frequency count that is hard to estimate on an ongoing basis,
• many national titles with sometimes little information on local market
delivery
the specification of the media term is more complex and often overly
simplified
12. 12
Aggregate Short Term Sales vs. Actual
Objectives
Most econometric models focus on explaining weekly sales directly,
however many media, including print, may have a slightly different
objective, focusing on upper funnel attitudes and behavior’s.
Often this roles are meant to work in concert with other media to drive
sales, so again specification is an issue – if models look for separate
impact of the two media and do not properly reflect the lead/lag
structure of the media’s role, then measurement may be compromised.
13. 13
The Problem Of Simultaneous Events In Modelling
Econometrics uses historical experience of data to quantify the effect of key sales
drivers. The key to establishing accurate measures is variation…
0
0.5
1
1.5
2
2.5
3
1-Jan-05
22-Jan-05
12-Feb-05
5-Mar-05
26-Mar-05
16-Apr-05
7-May-05
28-May-05
18-Jun-05
9-Jul-05
30-Jul-05
20-Aug-05
10-Sep-05
1-Oct-05
22-Oct-05
12-Nov-05
3-Dec-05
24-Dec-05
14-Jan-06
4-Feb-06
25-Feb-06
18-Mar-06
8-Apr-06
29-Apr-06
20-May-06
10-Jun-06
Week
Sales
0
20
40
60
80
100
120
140
160
180
Price/TVRs
TVRs Actual Sales Price
As the price change and TV
advertising occurs at virtually
the same time it would be
difficult to ascertain which is
driving the sales growth using
modelling this data
14. 14
Very Dependent On Long Time Series And Variation
0
0.5
1
1.5
2
2.5
3
1-Jan-05
22-Jan-05
12-Feb-05
5-Mar-05
26-Mar-05
16-Apr-05
7-May-05
28-May-05
18-Jun-05
9-Jul-05
30-Jul-05
20-Aug-05
10-Sep-05
1-Oct-05
22-Oct-05
12-Nov-05
3-Dec-05
24-Dec-05
14-Jan-06
4-Feb-06
25-Feb-06
18-Mar-06
8-Apr-06
29-Apr-06
20-May-06
10-Jun-06
Week
Sales
0
20
40
60
80
100
120
140
160
180
Price/TVRs
TVRs Actual Sales Price
As the price change and TV
advertising occurs at virtually
the same time it would be
difficult to ascertain which is
driving the sales growth using
modelling this data
Given a larger sample of data
with more variation, e.g. TV
without a price change, it
would be much easier to
accurately measure the
impact of the two sale drivers
This method of establishing correlations over time relies on variation is
sales drivers over time.
Econometrics uses historical experience of data to quantify the effect of key sales
drivers. The key to establishing accurate measures is variation…
15. 15
Alternative Techniques
Where models find it hard to separate between channels, testing
approaches, either traditional or virtual, can provide strong behavioral
estimates for channel impacts and ensure through DOE and/or
sampling rigor that each channel is given adequate chance to have a
measurable impact on sales.