Are Special Advertising Sections A Necessary Evil? Sara McDonald Soli May 2007

Special Advertising Sections A.K.A. Advertorials The American Society of Magazines Editors definition of Special Advertising Sections is: “a set of advertising pages unified by a theme, accompanied by editorial-like text or by editorial material from another magazine that supports the theme.”

What are Special Advertising Sections?

Where did they come from? Industry growth in the 1990’s – to combat diminishing revenue (Wall Street Journal) Page counts increased by over 22% from (TNS Media Intelligence/CMR and the Publishers Information Bureau) Not all magazines followed suit

Why is there controversy? Why do advertisers participate? Would they participate without advertorial inclusion? Do readers understand the difference between editorial and advertorial content? Do Special Advertising Sections risk the integrity of the magazine?

“While advertising sections have become very important tools for publishers, it is very important that readers trust and believe the magazine. It’s very important that the trust not be violated” - Ellen Openheim, chief marketing officer of the Magazine Publishers of America

Why study Special Advertising Sections? Goal –To understand why advertisers participate –To provide magazines with strategic direction on how and when to produce Special Advertising Sections

What did I learn from the literature? Consumers receive 3,000 –5,000 advertising messages per day. Advertisers seek non-traditional advertising vehicles. Special sections offer unique positioning for advertisers. Effect on advertisers, readers and publications is unknown.

The Research Question Do businesses make advertising decisions based on special advertising section opportunities?

What was the study? Survey sent to a random sample from our database of advertisers (sample = 374) Hard-copy survey sent via postal mail 15 questions Questions asked for demographic, behavioral and preference data

Who did I study? Response rate of 17.5% 47% were the owner or CEO of a company and 39% were a Marketing and/or Advertising Director Over 98% of the responding advertisers have an annual advertising budget equal to or less than $200,000

What did I discover? Section Topic47% Rate 32% Advertorial Inclusion 9% Timing 4% Ad Position 3% Other 4% What is most important to you when deciding whether or not to participate in a special advertising section?

How often do you purchase ads in Special Advertising Sections?

Where else do you advertise?

If you have advertised in Special Advertising Sections have you measured results?

If you have measured results, have you seen an increase in sales or traffic after the publication of the Special Section?

Will you only participate in a Special Advertising Section if your company is mention in the copy of the section?

If you currently advertise in Special Advertising Sections, would you still advertise with us if we did not have Special Advertising Sections?

So? Do businesses make advertising decisions based on Special Advertising Section opportunities? Yes, some do.

Summary Special Advertising Sections provide revenue for magazines, but can be costly to produce. Advertisers use Special Advertising Sections to communicate to readers in a non-traditional way. The majority of advertisers only participate in Special Advertising Sections 2-4 times per year. Over 50% of respondents would continue to advertise without Special Advertising Sections.

What do I recommend? Make adjustments to Special Advertising Sections for 2007/08 fiscal year Sections that correlate with preferred section topics Review pricing strategies Create package pricing for like-themed sections Assist with call to action opportunities for advertisers - After one year evaluate success of changes

What do I recommend? Re-conduct the survey after one year to see if advertisers’ views have changed Conduct focus groups to get additional information from advertisers (attitudes, behaviors, etc.)

“Advertising is the official art of capitalist society.” -English Historian, Raymond Williams Presented by: Sara McDonald Soli May 2007