Marketing midterm

Chapter 11

Using Magazines

Chapter Objectives

After reading this chapter you will understand:

1. The history and development of the American magazine

2. How magazine space is sold to advertisers

3. Characteristics of consumer and trade publications

4. The role of magazines as a targeted advertising medium

5. The usefulness of magazines in national media plans

6. The effect of new communications technology on magazines

Chapter Overview

Most magazines today appeal to niche readers, particularly those in categories with special value to advertisers. Virtually, all magazines are targeted to the special interests, businesses, demographics, or lifestyles of their readers. Magazines have adopted Internet technology to provide Web versions of their publications as a way to reach new readers, increase loyalty among readers, and to generate advertising revenue.

Lecture Outline

1. Introduction

A. The pros of using magazine include:

1) The number and range of specialized magazines provide advertisers with an opportunity to reach narrowly targeted audiences.

2) Magazines provide strong visuals to enhance brand awareness and they have the ability to deliver a memorable message to their niche audiences.

3) Most magazines offer some form of regional and/or demographic editions to provide even greater targeting and opportunities for less-than-national advertisers.

4) Magazines are portable, they have a long life, and are often passed along to several readers.

a. Business publications are especially useful as reference tools and leading publications within various industries offer advertisers an important forum for their messages.

B. The cons of using magazines include:

1) In recent years, magazine audience growth has not kept up with increases in advertising rates. Magazines are among the most expensive media on a per project basis. The growth in advertising rates has exceeded growth in audience size.

2) Advertising clutter has become a concern of many magazine advertisers.

a. Many magazines approach 50 percent advertising content and consequently time spent with any single advertisement is often minimal.

1. Most magazines have relatively long advertising deadlines, reducing flexibility and the ability of advertisers to reach fast-changing market conditions.

0. In the age of the Internet during which consumers are used to getting up-to-date information on demand, this poses a problem for some advertisers.

4) Despite the obvious advantages of magazine specialization, the downside is that it means a single magazine rarely reaches the majority of a market segment.

a. Therefore, several magazines must be used or alternative media must supplement magazine buys.

b. With thousands of consumer magazines, advertisers have difficulty in choosing the correct vehicle.

2. Advertising and Consumer Magazines

A. In 2005, 4.7 percent of U.S. advertising dollars was spent in magazines.

*****NOTES: Use Exhibit 11.1 Here*****

B. After television was introduced in the 1950s, magazines began to market themselves as a specialized medium to reach targeted prospects within the more general population.

1) Magazines focused on the quality rather than the quantity of the audience.

a. The modern niche magazine evolved, similar to the evolution of narrowly formatted radio stations.

2) Magazines must continue to adapt and change to be successful with today’s competitive and economic pressures.

1. Magazines share the problems of other media.

a. As with radio and newspapers, the segmented and fragmented nature of magazine publishing means that publications are constantly seeking to define audiences in more narrow ways.

b. Like radio, marketers invest the majority of advertising dollars in the leaders in the media category, leaving a small share of ad dollars to others.

c. Magazines have turned to editorial differentiation to attract special interest readers.

d. As with newspapers, magazines share concerns about the cost of paper,

delivery, and marketing to readers and advertisers.

4) The National Directory of Magazines reports over 6,300 consumer magazines.

a. Gaining and maintaining readership is difficult, however, as evidenced by the proliferation of discounts now offered to attract readers.

5) On average, five new magazines are introduced each week on very diverse topics.

a. Women’s magazines, although popular and profitable are experiencing numerous changes. Their designs are being revamped to fend off competition from lifestyle magazines.

6) Two primary factors affect the consumer magazine industry:

a. Selectivity.

b. Cost versus revenue considerations.

C. Selectivity

1) Successful magazines are characterized as having found narrow editorial interests and audience segments, or niches.

a. Niches include both readers and advertisers.

1. In a world of fragmentation, the right editorial formula is often hard to find.

( *****NOTES: Use Exhibit 11.2 Here***** )

3) There are few large homogeneous groups instead there are homogeneous segments within more general groups.

a. Publishers have long tried to reach the valuable teen market. However, they find that no market as such exists.

1. Boys and girls differ markedly now only in what they read but also in the amount of reading they do.

4) The Evolution of the Modern Magazine.

a. Audience and editorial selectivity is rooted in the historical development of magazines.

b. Even mid-nineteenth century magazines were targeted to special interest audiences and carried little advertising. Primary formats were:

1. Literary.

2. Political.

3. Religious.

c. In the latter years of the nineteenth century with a rising middle class, mass production and national transportation, national branded goods came about.

1. During the 1890s a number of publishers provided the foundation for today’s ad-supported, mass-circulation magazine.

a) In 1900 the Ladies Home Journal had a circulation of 1 million.

d. Until the advent of radio in the 1920s, magazines remained the only national advertising medium.

1. Magazines eventually had to share national advertising revenues with radio.

2. Magazines were the only visual medium available to national manufacturers.

e. In the 1950s, magazines became a class rather than mass medium. This change continues today with publications appealing to a fairly narrowly defined market segment.

D. Costs and Revenues.

1) Most magazines are largely dependent on advertising and have 47 percent of their content devoted to it.

1. Many advertising cancellations followed the 9/11 tragedy.

1. Subsequently, tobacco advertisers substantially curtailed advertising in the wake of the anti-smoking movement.

2) Publishers are concerned about profitability.

a. Marketing costs.

1. It is becoming more expensive to gain and maintain readers.

2. 70 percent of all consumer magazines are sold through subscriptions as opposed to via newsstands.

3. It takes huge sums of money to gain new readers and keep current ones.

4. Printing and postage costs have been escalating.

5. Competition prevents price increases for subscribers creating a cost squeeze.

6. 55 percent of magazine revenue comes from advertising.

b. Postage and distribution costs.

1. Since 1995, the U.S. Postal Service has imposed several postal rate increases at a rate exceeding the rate of inflation.

2. Cost of newsstand distribution has also gone up.

a) Consolidation has created streamlined and limited distribution channels.

b) Magazines are losing distribution levels due to wholesalers limiting the number of titles they will sell.

c) It is harder for publishers to get new titles on newsstand shelves.

3. Publishers are placing greater reliance on subscription sales to help offset upward spiraling costs.

c. Concentration of advertisers.

1. Publishers receive a disproportionate amount of advertising revenue from a very few product categories.

1. 12 categories account for 87 percent of all magazine revenue.

1. Ten companies provide one-third of these revenues.

1. In 2005, Procter & Gamble paid 6 percent of all consumer magazine revenue.

1. A cutback in spending by these few could have significant impact.

2. Magazines have been attempting to shift their costs to readers.

*****NOTES: Use Exhibit 11.3 Here*****

d. Increases in discounting.

1. Magazine ad rates have been slow to grow due to slowing of the economy.

2. Many magazines offer large discounts off the regular rate card to regular advertisers.

3. As advertisers push for more efficiencies in their media plans, magazines have been pushed to provide a wider array of discounts and value-added opportunities.

E. Cross-Media Buys.

1) Most magazine, television, or newspaper companies have been replaced by multimedia conglomerates.

1. These conglomerates have interests in all traditional media.

1. They also have interests with the Internet, interactive media, and various forms of direct response advertising.

2) If magazines can be sold as part of a multi-media package (cross-media buy), it can be of great benefit.

a. Because magazines reach niche audiences, they can often reach prime prospects who are light users of other media.

b. Companies such as Time Warner and Disney can offer advertisers hundreds of option for their advertising messages, often at a significant discount compared to buying on an individual basis.

c. In the sports arena, Disney can offer package deals with ABC, EXPN, ESPN The Magazine, and ESPN radio programming.

1. There is a complementary nature of magazines and television in reaching different segments of the population.

1. This combination not only extends reach, but also provides diversity of advertising themes and creative execution.

1. Despite the advantages of cross-media buys, advertisers are cautioned to be careful in selecting the right choice and fit, tailored for their target audience.

*****NOTES: Use Exhibit 11.4 Here*****

3. Magazines as a National Advertising Medium

A. Advantages of Magazine Advertising (as a primary or secondary medium).

1) Primary considerations in determining inclusion in a media plan are:

a. Does it work? (contribute to sale and profit).

1. Research indicates that it does (especially in the package-goods field).

*****NOTES: Use Exhibit 11.5 Here*****

b. Audience selectivity.

1. Magazines excel at reaching selected audiences.

2. Magazines are read by virtually everyone each month.

3. There are magazines for almost every demographic and interest group.

1. Readership is a secondary consideration to insuring reach to target audiences.

( *****NOTES: Use Exhibit 11.6 Here***** )

c. Long life and creative options.

1. Magazines are not perishable. They may be read many times by many people (i.e., doctor’s reception room, friend’s homes, or at work).

2. Magazines are portable.

3. Magazines are used as reference sources; article read, clipped, and saved.

4. Magazines are often re-read.

5. Magazines, as a visual medium, have creative options.

1. Suited to long copy.

( *****NOTES: Use Exhibit 11.7 Here***** )

d. Availability of demographic and geographic editions.

1. It is rare that a national magazine does not offer demographic or geographic breakouts of its total circulation

2. These special editions are called partial runs .

e. Qualitative factors and engagement.

1. Advertisers are interested in how readers think of themselves when they read a particular publication -- the Playboy man or Cosmopolitan woman.

2. Offer high-audience involvement or engagement (what does a reader think?).

3. Understated creative approaches are often used instead of hard sell techniques.

*****NOTES: Use Exhibit 11.8

Here*****

1. See the PRIZM technique in Chapter 7 to see how lifestyle can be used with magazine readers.

( *****NOTES: Use Exhibit 7.2a Here***** )

5. Editorial content also makes a connection and creates synergism as magazines are considered an information and idea source by readers

6. A 2003 survey by Knowledge Networks gave evidence that reader involvement is linked to advertising recall.

7. The ultimate measure of success is whether the right audience can be delivered at a competitive cost.

B. Disadvantages of Magazine Advertising:

1) High cost.

a. Magazines are generally the most expensive medium on a CPM basis.

b. In niche marketing, however, CPM is not as important as the quality of the audience being reached.

c. To achieve reach goals, several magazines might have to be used. This increases cost and risks duplicated audience levels and overlaps in readership.

2) Long closing dates.

a. Because of the printing process, most magazine advertisements must be in far in advance of the actual printing.

b. This could be as long as 8–10 weeks in advance, which makes responding to current market conditions or events difficult.

1. Inflexibility in scheduling and developing competitive copy.

2. Consequently, magazine must keep copy very general.

c. Magazines have space reservation dates and material submission dates.

d. To overcome the competitive disadvantage of long closing dates, fast-close advertising is available.

1. This allows advertisers to submit ads closer to publication dates.

2. In past years, advertisers paid a premium for this privilege, but competitive pressure and improved print technology has allowed very little or no extra charge.

4. Features of Magazine Advertising

A. Partial-Run Magazine Editions.

1) Partial-run editions refer to any magazine space buy that involves purchasing less than the entire circulation of a publication.

2) The oldest, and still most available, form of partial-run is the geographic edition.

3) The next most available forms are the demographic and vocational/special interest editions.

a. Partial-runs allow a general magazine to compete with smaller niche publications for specialized advertisers.

b. A good example of this is Time, Newsweek, and People.

1. Time offers hundreds of ways to buy advertising in partial-runs, including both demographic and regional editions.

4) Computer technology and advances in high-speed printing allow magazines to meet these advertisers’ requirements.

B. Split-Run Editions.

1) Split-run editions occur when, as a version of the partial-run, the advertiser uses the edition for testing of various ad concepts.

a. Many times different ads are run in every other issue within a regional edition.

b. Each advertisement is the same size and runs in the same position in the publication. The only difference is the element being tested.

c. By inserting a coupon, the advertiser can tell, which version of the ad had the highest response.

d. This split-run technique is called an A/B split, with half the audience getting version A and half version B.

2) Magazines themselves will run different covers for the same issue for testing purposes or to take advantage of a story in that issue of regional interest.

3) The benefits of the partial-run and split-run editions are:

1. Geographic editions allow advertisers to offer products only in areas where they are sold.

( *****NOTES: Use Exhibit 11.9 Here***** )

b. Partial-runs can localize advertising and support dealers or special offers from one region to another.

c Split-run advertising allows advertisers to test various elements of a campaign in a realistic environment before embarking on a national rollout.

d. Regional editions allow national advertisers to develop closer ties with their retailers by listing regional outlets.

4) The disadvantages include:

a. CPM levels are usually much higher than full-run advertising in the same publication, and close dates can be as much as a month earlier than other advertising.

b. In the case of demographic editions, the lack of newsstand distribution for these advertisements can be a major disadvantage if single-copy sales are significant for the publication.

c. Some publications bank their partial-run advertising in a special section set aside for such material. There may also be special restrictions placed on partial-run advertising.

C. Selective Binding.

1) Selective binding is binding different editorial or advertising materials directed to various reader segments in a single issue of a magazine.

a. Using computer technology and sophisticated printing techniques, advertisers and publishers can develop advertising and editorial material specifically for one group or even individual readers.

b. This technique began in farm publications in the 1980s.

c. It is most useful when there are significant subcategories of larger target markets, such as segments by age, income, etc.

d. Many advertisers believe selective binding is more suited for business and farm magazines than consumer magazines.

e. This technique has major implications for direct mail, combining the targeting nature of direct mail with the high-prestige environment of the magazine.

f. The major drawback is that it can only be used for subscribers.

1. There is also concern for invasion of privacy.

D. City Magazines.

1) City magazines as publications are not a new idea.

a. Town Topics was published in New York City in the late nineteenth century and San Diego was published in 1940s.

b. Today, city magazines are virtually in every major city.

2) Some publishers are combining traditional strengths of city magazines with specialized publication content.

a. Examples include, Chicago Bride and Atlanta Business Chronicle.

3) They have in common a homogeneous, upscale readership, and an editorial mission directed to the local community.

a. Attracting some national advertisers wanting to target individual markets.

4) When the advertising market goes soft financially, this is among the first media dropped.

1. Magazine network. Approximately 90 city and regional magazines have come together to sell space less expensively to advertisers.

( *****NOTES: Use Exhibit 11.10 Here***** )

E. Custom Publishing.

1) It is one of the fastest growing sectors of the magazine business and consists of advertiser-produced publications intended to reach prospects or current customers in a communication environment totally controlled by the marketer.

2) This idea is also not a new concept.

a. In 1949, GM published Friends, a magazine sent to Chevrolet car and truck owners.

b. Custom publishing is seen as a cross between direct mail and traditional magazines.

3) Most mainline magazine publishers have customized publishing divisions and offer custom publishing services to their advertisers.

4) The objective of this form of publishing varies from company to company.

5) Custom publishing is usually part of an integrated marketing campaign, made possible by market research.

6) These publications are beginning to look like traditional publications.

1. Some publications have even accepted and included outside advertising.

5. Magazine Elements (finding optimum best design, placement, and format)

A. Size.

1) The page size of a magazine is the type area, not the size of the actual page.

2) Traditional sizes include:

a. Standard size—8 by 10 inches (like Time).

1. Small—4 3/8 by 6 1/2 inches (like Readers Digest).

1. Oversized publications (like Rolling Stone).

B. Position, Color, and Size of Magazine Advertising.

1. Space in magazines is generally sold in terms of full pages and fractions thereof.

( *****NOTES: Use Exhibit 11.11 Here***** )

2) The small ads in the classified pages of many magazines are generally sold by the line.

3) The positions that demonstrate the highest readership, and are the most expensive, are the covers.

a. The front cover of a magazine is called the first cover.

1. Rarely sold in American consumer magazines.

b. The inside of the front cover is called the second cover.

c. Inside the back cover is called the third cover.

d. The back cover is called the fourth cover.

1. Four-color is usually worth the extra expense, whereas two-color is not.

( *****NOTES: Use Exhibit 11.12 Here***** )

5) Most advertisers request right-hand placement at the front of the magazine; preferably near related editorial material.

a. Known as FFRHPOE , “far forward, right-hand page opposite editorial.”

1. Size does matter, however, as size of an advertisement increases, the audience does not grow proportionately (nor does the cost).

( *****NOTES: Use Exhibit 11.11 Here***** )

a. Larger space does allow more creative flexibility; and have greater impact and recall over time.

1. The quality of the message is most important in ad readership and recall.

b. Specific objectives and creative approaches must be considered in designing magazine advertising.

C. Bleed Pages.

1) Bleed advertisements are printed matter that runs over the edges of a page, leaving no border or margin.

2) Does not have appearance of being confined to a particular space.

3) They are generally seen by 10 to 15 percent more of the readers than non-bleed pages.

1. There is no standardization for bleed charges.

1. Some magazines do not charge a fee, but offer the bleed option as a value-added or extra incentive.

( *****NOTES: Use Exhibit 11.13 Here***** )

D. Inserts and Multiple-Page Units.

1) Inserts and multiple-page units cover a variety of different formats.

2) The most common form of multi-page units is the facing, two-page spread.

a. Used most frequently by automotive manufacturers.

b. This form increases impact to the message and eliminates any competition for the consumer’s attention.

c. Gatefolds go from the front cover and are normally two or three pages.

3) Cost is a big factor when considering these formats.

1. One problem with the above formats is it has lost its novelty to consumers.

1. The most effective multiple-page units are for advertisers with an interesting product, a new story to tell, and an interested and involved group of prospects.

6. How Space is Sold

A. Advertising Rates, Negotiation, and Merchandising.

1) Advertising rates, negotiation, and merchandising are all receiving special attention in the competitive marketplace; and providing added value to magazine advertising.

a. Publishers are seeking to differentiate themselves with merchandising and value-added plans.

1. During the 1980s, magazine advertising experienced a downturn and magazines began to negotiate with individual advertisers for special rates. This practice of one-to-one negotiation is called going off the card.

1. One of the most common means of magazine merchandising is through brand extensions. The Good Housekeeping Seal is the oldest and most recognized tool; after lab testing it is applied to products and services, which meet quality standards.

( *****NOTES: Use Exhibit 11. 14 Here***** )

3. These services also take many other forms such as real estate services, greeting cards, and clothing offerings under the magazine brand name.

1. The key to successful merchandising programs is to coordinate the magazine’s reputation and expertise with marketing techniques that help advertisers sell their products.

( *****NOTES: Use Exhibit 11. 15 Here***** )

B. Magazines and the Internet.

1) Magazines were among the earliest media to use the Internet and hundreds remain heavily involved.

a. The most common usage is the online version of the print publication often designed to help build brand loyalty.

b. These online editions can be advertiser supported and are value-added for advertisers.

1. These online vehicles are intended to extend audience reach to online users.

1. Both magazines and advertisers can benefit from this multiplatform tie-in (print and online).

2) Joint ventures with other businesses have now become popular.

a. Some magazines have entered into joint ventures with cross-media programs such as CNN and Sports Illustrated.

b. Some magazines have co-ventured with established Web sites to create a synergy between the expertise of the company and the visibility of the magazine.

1. Magazines have also used the Internet as a traditional e-commerce business.

a. Targeted audiences of magazines offer an ideal marriage for the one-to-one

marketing over the Internet.

C. Magazine Rate Structure.

1) Magazine rate structures are typically broken down by size of the space purchased (full-page, or partial-size page) and a graduated scale of rates, depending upon the number of times an ad is run.

a. In Vogue, a 4-color full-page ad would sell for a one-time rate of $115,200; or $105,984 per advertisement for a twelve-time rate.

2) The cost efficiency of a publication can be computed and compared to others under consideration.

a. The CPM can be derived by dividing the cost per page by the magazine’s circulation; for Vogue, that would be $115,200/1,293,185 x 1,000 = $89.08.

*****See Illustration of a rate card on page 361 of text*****

D. Discounts.

1) Frequency and Volume Discounts.

a. The one-time, full-page rate of a publication is referred to as its basic, or open rate.

b. Frequency discounts are volume discounts based on the number of pages run.

c. The volume discount gives a larger percentage discount based on the total dollar volume spent for advertising during a year.

*****See Illustration of Frequency and Volume Discounts on page 361 of text*****

2) Other Discounts.

a. The most common discount is that given to advertisers who combine buys with other publications or media owned by the same magazine group.

E. The Magazine Short Rate.

1) The magazine short rate, based on a space contract, is the rate charged if the advertiser uses less space than anticipated in their formal year contract.

*****See Illustration of a short rate calculation on page 362 of text*****

F. Magazine Dates.

1) Magazine dates are those used in planning and buying magazine space. The sets of dates are:

a. Cover date: the date appearing on the cover.

b. On-sale date: the date on which the magazine is issued.

c. Closing date: the date when the print or plates needed to print the ad must be in the publisher’s hands in order to make a particular issue.

G. Magazine Networks.

1) Magazine networks are groups of publications that can be purchased together simultaneously using one insertion order and paying a single invoice.

2) Currently, there are dozens of magazine networks, representing dozens of titles.

3) As with other media networks, advertisers benefit from a choice of several magazines at lower CPMs and gaining a larger audience than with a single magazine.

4) They generally fall into two categories:

a. Single publisher networks—a single publisher owns several magazines and allows an advertiser to buy all or any number of these as a group.

1. For example, Hearst Magazine Group publishes and offers over 20 magazines.

2. To a degree, the single publisher network is being replaced by cross-media buying.

b. Independent network—made up of different publishers that market magazines with similar audience appeals. A rep firm contracts individually with each publisher and then sells advertising for magazines within the group.

*****NOTES: Use Exhibit 11.16 Here*****

7. Magazine Circulation

A. The most common and reliable method of audience measurement is paid circulation.

1) Most consumer magazines have their circulation audited by an outside company.

2) Magazine rates are based on the circulation that the publisher promises to deliver to advertisers (called guaranteed circulation).

3) Because the guaranteed circulation is the number of readers advertisers purchase, it is also known as the rate base , upon which advertising rates are based.

4) Problems faced.

1. It is increasingly expensive to maintain high readership levels.

1. It is expensive to keep fringe, marginally interested readers.

1. Major auditing firms only count readers who pay at least 50 percent of the full subscription price for auditing purposes; thus, limiting marketing promotions.

5) Some major magazines have recently lowered their rate bases.

6) Controversy exists over publishers’ view that auditors should use an “average” monthly circulation figure.

7) Advertisers would rather buy space in magazines with a quality readership and the largest number of readers in their target audience.

8) A number of audited publications do not offer guaranteed circulations, but provide accurate circulation figures for past issues.

B. Readership.

1) Readership, in magazine terminology, usually means combined paid circulation (subscribers and newsstand purchasers) with pass-along readers.

a. The more general the publication’s editorial, the more likely it is to have significant pass-along readership.

2) There is concern that readership is being used as a substitute for paid circulation.

3) It would seem that total readership, accurately measured, would be a reasonable approach to measure audiences.

a. Emphasis has shifted from numbers of circulation to selling the quality of

readership.

b. The problem arises that media buyers regard pass-along readers of consumer magazines as inherently inferior to paid circulation.

c. The real issue is assessing the specific objectives of the publication and those of its readers.

8. Measuring Magazine Audiences

A. Readership has two distinct meanings:

1) The time spent with the publication.

2) Includes all readers of a magazine as contrasted with only those who buy a publication.

B. The Audit Bureau of Circulations.

1) The Audit Bureau of Circulations (ABC) is the largest of several auditing organizations that verify magazine circulation.

a. ABC reports are very matter-of-fact documents that deal only with primary readers.

1. ABC does not offer information about product usage, demographic reader characteristics, or pass-along readership.

( *****NOTES: Use Exhibit 11.17 Here***** )

C. Syndicated Magazine Readership Research.

1) There are two principal sources of syndicated magazine readership research: Simmons Market Research Bureau (SMRB) and Mediamark Research, Inc. (MRI).

a. MRI explores the readers who read magazines. MRI uses a combination of personal interviews and self-administered questionnaires, respondent reports of magazine readership and product usage; using a sample of 26,000 people.

b. SMRB samples over 25,000 adults and collects data from questionnaires and measures media usage, including data on several hundred magazines, with an emphasis on audience and product usage.

9. The Business Press and Business-to-Business Advertising

A. Business-to-Business advertising is advertising that promotes goods through trade and industrial journals that are used in the manufacturing, distributing, or marketing of goods to the public.

1) The level of communication and marketing differs significantly between this form and consumer magazines.

2) Prospects for business advertising are fewer and more concentrated and tend to be experts concerning the products they purchase.

a. Audience selectivity is more important than CPM or reach used in

consumer media.

1. Business publications efficiently reach major decision makers.

( *****NOTES: Use Exhibit 11.18 Here***** )

c. The tone and advertising of business publications differ significantly from consumer magazines.

d. The business press is a medium of reference and commerce.

B. Communicating the Business-to-Business Message.

1) The message must be directed at the profitability of the customer. This is a different communication format than that used in consumer promotions.

2) Business-to-Business Advertising. Business community communication considerations:

a. Appeal to prospects in terms of specific job interests and demands.

b. Sell the benefits to the buyer and not the features of the product.

c. The job of business advertising, particularly of high-end products, is to support and facilitate the sales function.

d. Avoid product puffery.

1. Business advertising needs to have clear objectives and these objectives need to be measurable in terms of the specific publics that the message is directed toward.

1. A significant number of business publication readers receive their magazines on a pass-along basis and are viewed as valuable by the advertisers.

C. Corporate Branding.

1) Business-to business selling is about buying the reputation of the companies with which other companies do business.

a. The future of a business can be at stake when a major purchase is made.

2) More emphasis is now being placed on corporate branding.

a. Corporate branding attempts to integrate a company’s total image through a coordinated marketing communications process.

b. Brands should help a company to establish its reputation and set it apart

from competitors.

D. Audiences of the Business Press.

1) Characteristics:

1. Reading publications for business people is part of their job.

1. Business magazines must develop a depth of understanding of their readers that is not required in the consumer press.

c. In terms of age, income, job categories, and education, business publications skew far higher than consumer magazines.

*****NOTES: Use Exhibit 11.19 Here*****

E. Competition for Business-to-Business Advertising.

1) TV, newspapers, radio, and consumer magazines are competing for consumer related advertising dollars.

2) B2B marketing devotes its dollars to personal sales, trade and business publications, direct mail, and telemarketing.

3) Business executives will not make appointments with salespersons unless they have a thorough knowledge of the companies and product they represent.

4) The Internet has become a major force in this field of advertising.

*****NOTES: Use Exhibit 11.20 Here*****

F. The Internet and Business-to-Business Marketing.

1) The Internet gained acceptance faster on the B2B side than on the consumer side.

a. Businesses were computer savvy long before the Internet came along.

2) The Internet quickly became part of the integrated-marketing communication plans of most companies.

3) Despite the greater utility of Internet B2B marketing, it has been used in rather traditional ways to reach consumers.

4) The use of the Internet in B2B marketing and potentially the practices of business selling changed dramatically in the late 1990s with the introduction of the Internet auction.

G. The Internet Auction and Business-to-Business Marketing.

1) The coming of the Internet auction promises to change many methods of

marketing and selling goods in the B2B world.

a. The traditional method of doing business had involved a long, drawn out process of mailing specifications, questions and answers, bidding, and negotiation.

2) It allows buyers and sellers to make a connection, bid on parts and supplies, and make the final deal through direct-marketing channels between buyers and sellers.

3) Emphasis is on price rather than brand/company reputation and advertising.

a. It is assumed that companies have established an enhanced company reputation and product identity before the Internet connection enters the picture.

b. It is price that sells.

1. The Internet adds a true global dimension to the process.

1. The Internet is altering rules on how companies manage sales, service, and distribution operations.

H. Business Publication Expansion of Services.

1) As competition for B2B advertising grows, business publications have

increasingly expanded their merchandising and ancillary services.

2) New ventures include:

a. Subscriber list rentals.

b. Event-related publications.

c. Custom publications.

d. Trade shows.

3) Ancillary services add to magazines’ overall profitability and decrease dependence on advertising from their publications:

4) Advantages of ancillary services:

a. Utilizes a publisher’s knowledge of a particular industry to help client’s develop a coordinated program and advertising campaign.

b. They gain revenue from companies not using advertising as a primary B2B marketing tool.

c. They increase the magazine’s credibility.

I. Types of Business-to-Business Publications.

1) Trade Papers (distributive trades).

a. Trade papers are directed at those who buy products for resale, such as wholesalers, jobbers, and retailers.

b. Almost every goods distribution company has a trade paper dealing with its issues.

2) Industrial Publications (manufacturers and builders).

a. Aimed at industries, which sell materials, machinery, tools, and parts to other companies for producing other products or services.

b. Designed to reach purchasing agents, plant managers, engineers, controllers, and others who have a say in spending the firm’s money.

3) Management Publications (top officers of other corporations).

a. This is a difficult group to reach because there are just a few decision makers and they tend to read business-related consumer magazines such as Fortune and Nation’s Business.

4) Professional Publications (physicians, dentists, architects, and other professional people).

a. Journals upon which professionals depend to keep abreast of their respective professions.

5) Controlled Circulation.

a. Free circulation is known as controlled circulation , directed only to carefully selected people who are influential in making purchasing decisions for their industry.

b. The number of controlled publications in the business field plays a major role in their share of advertising-to-circulation revenues compared to consumer magazines.

c. This form creates a significant dependence on advertising support.

6) Vertical and Horizontal Publications.

a. A vertical publication is one that covers an entire industry (i.e., the baking industry).

b. Horizontal publications are aimed at people who are engaged in a single function that cuts across many industries (i.e., a purchasing agent).

J. Circulation Audits.

1) B2B advertisers are very interested in the circulation of the publications in which they advertise.

2) The readership numbers are very important because of the directed nature of B2B advertising.

a. Total audience is smaller, CPM for most is significantly higher, and competition makes it imperative that B2B marketers reach their target market in a timely fashion.

3) The leading auditor is Business Publications Audit of Circulation International

(BPA).

4) Verified Audit Circulation (VAC) provides audits of other media as well as business publications.

*****NOTES: Use Exhibit 11.22Here*****

10. Agribusiness Advertising.

A. A special form of business publications is to the agribusiness industry that was once addressed to small farmers.

B. Dramatic changes have caused advertisers in this industry to tailor their advertising messages to a concentrated industry of huge farm cooperatives and farm managers with income and educational levels that rival those of the CEOs of any major business.

C. The farm press is seeing increased competition from other media for the advertising dollar, such as syndicated television programs.

D. Web sites have been established by farm media and agribusiness advertisers.

E. Agribusiness promotional techniques are more specialized than those of traditional B2Bselling.

F. The business of farming has hit hard in recent years making it difficult for farm magazines and agribusiness advertising in general.

G. To compete, farm publications have added many techniques to reach their audience, much like the business press, using sophisticated databases, direct mail, and special catalogs.

*****NOTES: Use Exhibit 11.23 Here*****

H. The Organization of the Farm Press

1) General Farm Magazines.

a. The farm press, though hard hit economically, is still viable and competitive.

b. The three major publications in this category are Farm Journal, Successful Farming, and Progressive Farmer.

2) Regional Farm Magazines.

a. These tend to be general in nature and address issues of crops, livestock, and government farm policy.

b. Examples are Prairie Farmer, Oregon Farmer-Stockman, and Nebraska Farmer.

3) Vocational Farm Magazines.

1. Devoted to certain types of farming or livestock raising.

1. Examples include The Corn and Soybean Digest, The Dairyman, American Fruit Grower, and Missouri Pork Producer.

4) Many farmers receive several publications.