FORUM: Who is to blame for the publishing trading row? - Magazine publishers and press buyers are not seeing eye to eye these days. It’s undoubtedly a seller’s market - a situation few buyers find to their taste. Are they behaving badly -

Compared with the television and national newspaper markets, the world of consumer magazine advertising is generally considered fairly sedate. No-one bangs tables or throws phones through windows. There’s no overtrading or overdealing - nothing, in short, remotely underhand.

Compared with the television and national newspaper markets, the

world of consumer magazine advertising is generally considered fairly

sedate. No-one bangs tables or throws phones through windows. There’s no

overtrading or overdealing - nothing, in short, remotely underhand.



It’s not all sweetness and light though, as we discovered a couple of

weeks ago when media buyers began to get rather upset with a couple of

magazines - Cosmopolitan and Marie Claire - which have become ’victims

of their own success’ and are fully booked until next year. Other titles

in the glossy sector are expected to follow suit and advertisers are not

amused.



And, as always when grumbling begins, other grievances begin to

surface.



So one of this week’s sessions at the Periodical Publishers Association

conference, Magazines 97, proved to be rather timely.



Its two central issues were ratecards and payment terms. The latter has

been bubbling under for some time now and basically boils down to

disagreements about when the money is due. Publishers would like to

start the clock ticking as soon as the issue hits the streets; agencies

argue that a magazine hasn’t officially been published until the issue

date.



But many publishers have deeper concerns - they say agencies are

systematically withholding payment for longer and longer periods. After

all, it’s a nice little earner for agencies. In the past month, there

have been a couple of cases of medium-sized publishers withdrawing the

credit ratings of large media specialists. In each instance, the dispute

has been patched up behind the scenes - but there are signs that media

owners are determined to take a stand.



Then there are ratecards. It used to be the case that everyone except

the client ignored the ratecard. Each year, publishers put up their

rates by exorbitant amounts, the agency pays a slight increase but

appears to be getting a bigger year-on-year discount. Result? The

publisher gets more money and the client thinks its agency has improved

its buyers’ performance.



Everyone is happy. Unfortunately, some publishers are doing so well

these days, they have the cheek to ask for something a lot closer to

ratecard.



Are there real problems that need addressing in the trading

relationships between publishers and agencies?



Perhaps, Peter Dear, the deputy chief executive of the Periodical

Publishers Association, believes. He argues that magazines are enjoying

a period of unprecedented success in terms of increased circulations and

readership. It is the only major medium that is experiencing real growth

in audience. But it isn’t able to reap the benefit.



’Although enjoying greater ad revenue success than competing media,

magazine publishers are finding that they are being discriminated

against when it comes to the receipt of those revenues,’ he argues.



’One of the key issues is that other media are all paid on the basis of

when the ad appears and is exposed to the intended audience. That means

the publication date. But magazines are being paid by advertising

agencies not on the basis of publication date but on the basis of cover

date. On average, this means that magazines are receiving those revenues

one month later than their media competitors - placing them at a

commercial disadvantage.’



Is it true? Simon Mathews, the managing director of Optimedia, concedes

that some media companies are slacker than they’d care to admit when it

comes to payment. But he also believes that there is more than an

average degree of paranoia around. ’Publishers still believe that

advertisers are about to go belly up and that they’ll have to take a

share of the pain when it happens. I don’t know why it should be that

way when the economy is in good shape. The fact remains that late

payment is more often than not about mistakes rather than anything more

sinister ,’ he states.



But what about ratecards? Are publishers pushing their luck? ’In their

dreams,’ Mathews responds. ’It would be a laudable aim for them to be

more sensible about ratecards. For the past few years, ratecard prices

have been inflated by double digits. They could attempt to put their own

house in order where that is concerned - especially if they want to

achieve a narrowing between ratecard rate and discount rate. But

publishers will want to reflect the commitment of individual clients. If

they don’t, they’re complete charlies.’



Duncan Edwards, the director of corporate buying at the National

Magazine Company, agrees that ratecard rates have been reflecting the

reality of the market less in recent years. But he doesn’t see that as a

major issue.



He adds: ’The situation has become a bit daft but I don’t think it is an

impediment to trading.’



And he doesn’t believe the big publishing houses are often involved in

the sorts of payment squabbles that have become increasingly common.

’Different magazine groups will have different relationships with the

credit managers of agencies. The problem a lot of smaller publishers

have is that all payment is suspended for a query on just one ad. I

don’t think these are major problems.’



Other publishers agree. Georgina Crace, the ad sales director of IPC’s

Southbank Group, says that your view will be heavily coloured depending

on what market you’re in. ’With home interest and fashion titles,

business is booming and, of course, rates are hardening in line with

demand. But we’re not aware of any huge push to demand ratecard across

the board.



Some large agencies are consistently late payers and it is extremely

annoying - but the problem is no worse than it has been in the past.



’The biggest issue for us is trying to get agencies to be more creative

and think about things over and above merely buying space. We

increasingly deal with big buying departments that don’t allow media

owner access to planners. I fear for advertisers if that trend

continues. We need access to the creative side to explain how we can

contribute to an integrated marketing approach - including how they can

access our databases and take advantage of sponsorship.’