Tuesday, October 13

Stacking The Odds: Magazine Publishers


The story may be stale for some, but it's no less relevant. AdvertisingAge published an interesting article last week, revealing that rival magazine companies are discussing the creation of an ad network that would sell targeted ad space across many industry Web sites.

While considered very preliminary, the concept is that each participant could get better ad rates. Owning their own network, these publishers believe, thereby reduces the increasing number of independent ad networks that return pennies on the dollars.

According to the IBM Global Business Services study highlighted earlier, this is the kind of network that many advertising professionals expect in the next three to five years or less.

Will a collaborative magazine ad network work?

According to the article, a magazine publishers' network, if it could achieve the crucial scale required, could offer advertisers behavioral targeting on professionally produced, "well-lit" sites. However, depending on the structure and whether publishers would retain independent account executives, it could also skew sales toward favored publishers.

While it might seem like a prudent move for magazine publishers, they would have to take care not to model such a network after the Newspaper Preservation Act of 1970, which may have saved some newspapers in the short term, but resulted in near dual-paper monopolies that hindered start-ups.

Generally, most participating newspapers consolidated advertising sales and distribution. In recent years, the number of joint operating agreements has declined considerably. Personally, I wonder sometimes if the Newspaper Preservation Act of 1970 didn't set the stage for declining print circulations today.

Specifically, had newspapers not grown complacent with little fear of competition, would they have been faster to act in developing a modern distribution model that paid for itself? We may never know.

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