Realizing The Integrated Audit Ideal

B-to-B media companies are investing heavily in integrated databases—can BPA and ABC deliver the metrics solutions needed to support brand media buys?

By Karlene Lukovitz
Monday, June 1, 2009

As the publishing industry struggles to reinvent itself, its traditional suppliers and services have been scrambling to keep up with the shifting marketplace and radically changing needs.

Auditing is a prime case in point. ABC and BPA Worldwide face many challenges, starting with the shrinking pool of domestic magazines and newspapers resulting from years of media consolidation and the accelerated wave of foldings since the financial crisis hit last year. At the same time, cost pressures and changing competitive scenarios have caused an increasing number of b-to-b and niche consumer magazines to forego print circulation audits.

For all of the sometimes-heated debate about print circulation auditing within the b-to-b arena, the reality is that media companies continue to invest in independent third-party audits wherever they are needed to compete effectively within a market. However, many on the seller side maintain that demand for circulation audits has declined, or question whether media buyers are closely reading or analyzing the statements, given shifting marketing priorities.

“We provide advertisers with what they want,” sums up Nick Cavnar, VP, circulation and database development for Hanley Wood Business Media, which exemplifies today’s approach of making case-by-case decisions on audits. “We still need circulation audits in many of our markets, but for several of our publications, audits weren’t contributing anything to the advertising sales equation.

“It used to be that having 1,000 more qualified subscribers with the right titles or one percent more direct request than your competitor on your print circulation statement would swing a huge amount of advertising and market share in your direction,” Cavnar adds. “But for most, that isn’t the real battlefield anymore. Now, the objective is providing an integrated audience view—being able to demonstrate how many qualified people are engaged with a brand through the magazine, online, e-newsletters, events and all of the other channels being offered by a brand.”

In short, as print’s revenue contribution declines and online increasingly holds the key to b-to-b media companies’ survival and growth, the real challenge for the audit bureaus is providing, in timely and cost-justifiable fashion, the brand metrics that publishers need to sell integrated media buys.

Challenges of Moving from Print- to Brand-Oriented

In recent years, some b-to-b media companies have expressed frustration at what they view as slow-to-change, print-oriented cultures at the audit bureaus that impede full leveraging of centralized database capabilities.

“Auditing rules got locked into place based on requests from print subscribers. But online, it may not be practical to try to get people to fill out a form every year for every type of content accessed or interaction,” says one b-to-b circulation executive. “People don’t want to fill out forms and, from the publisher’s and advertiser’s perspective, why do we need a request form if we can show that the person has just accessed an e-newsletter or paid for a piece of content? In a sense, the audit trail is disappearing. Still, it’s the audit bureaus’ responsibility to ensure that rules aren’t changed precipitously, in ways that open the doors to inflated claims in either circulation or digital media. It’s a tough balancing act.”

Internal IT and Web development teams can now create and deploy registration forms and databases relatively quickly, but each process and request on a site is often managed and maintained separately, and “all of the traditional checks and balances for a BPA audit are not present,” John Rockwell, VP, marketing and e-media for Access Intelligence’s Chemical Business Media division, wrote early last year in his blog, b2bcirc.blogspot.com. The industry has been too focused on “minutiae” and not focused enough on “pushing vendors and systems to link up Web site behaviors and our extensive customer databases” to achieve the core goal of quantifying how customers are engaging with content in order to match buyers and niche sellers, he stated.

In the last six months, two b-to-bs created buzz by seeking alternate metrics solutions.

In April, Questex Media Group announced that it was moving its auditing business from BPA—like ABC, a not-for-profit—to Verified Audit Circulation (VAC), a for-profit. Questex said it made the move because it had invested large sums on creating a new integrated database, and believed VAC could provide greater speed to market and flexibility in its approach to providing integrated reporting and auditing.

“We in no way question that BPA, or for that matter ABC, does a great job,” sums up Heidi Spangler, director of circulation and audience development. “We just felt that consensus for change takes too long, and we didn’t want committees determining our approach. We feel the auditor should verify what’s reported, not determine what’s reported.”

Other publishers, including competitors, have characterized this as a cost-cutting move designed to avoid the costs of maintaining circulation files to BPA’s more stringent standards. Questex and VAC defended VAC’s standards. “As always, media buyers will have the final say, and other publishers will watch for their reaction,” comments one media executive.

Last November, United Business Media’s TechInsights division, publisher of EE Times, left BPA in favor of creating its own cross-channel brand report, dubbed EARmark (for “Engagement And Reach”). The report, issued quarterly, consolidates data from various sources for print magazine subscribers (fulfillment bureau/USPS mailing statement data), digital edition subscribers (digital vendor data), events (publisher’s data augmented by BPA events reports) and online.

Online data provided include market share percentage per Hitwise, Omniture data on unique and total visitors and page views for each of the sites within TechInsights’ network, net e-newsletter subscribers (deployment vendor data), Webinar registrants and EE Times RSS feed users (publisher’s data). The report also includes audience demographics (including gender, education and income) and usage patterns (how many are site “addicts” versus “regulars” or “passers-by”) through Internet ratings service Quantcast. Quantcast combines data collected directly through page tagging with panel-based metrics. TechInsights also offers tailored customer online reports, using success metrics that are predefined with the customer, according to CMO Jenn Markey.

Markey says TechInsights wanted to provide a more frequently updated integrated brand view and detailed audience usage/demographics. “The biggest challenge with BPA was what we consider a print-centric approach, with audits that were always six months in the past,” she says. While TechInsights competes with other publishers, its main competitors are online players who don’t use BPA to audit their traffic, and TechInsights “didn’t want to reinforce outdated standards,” she adds.

Asked about accountability of online data, Markey says that TechInsights adheres to running the same query and reporting online metrics against the same standardized baselines every month. “The results are what they are,” she says.

BPA president/CEO Glenn Hansen points out that BPA instituted an integrated media report option in 1998, and has always been willing to work with individual publishers to find solutions. “We can’t create solutions for companies that don’t approach us with their needs,” he says.

In regard to online metrics, the audit bureaus stress that no available Web analytics software or internal analytics program can claim to deliver the transparency of an independent third-party audit. “No two systems out there count the same way, and even the same system can produce different counts depending on how it’s being used,” says Hansen.

The census-based traffic audits provided by ABC Interactive (ABCi) and BPA (formerly through its own system, now through Nielsen) adhere to Interactive Audit Bureau definitions and guidelines, including filtering out spider, robot and internal activities.
However, the ABCi and original BPA Web audits generated little uptake from media companies. Since media buyers and advertisers by and large haven’t required audited online metrics, few publishers have been willing to pay for separate audits of their Web traffic. An additional obstacle has been publishers’ concern about reporting lower audited numbers than they’ve been reporting using other analytics systems.

New Integrated Initiatives in the B-to-B Arena

Particularly within the past year, both audit bureaus have accelerated their integrated auditing and reporting initiatives, while also taking steps aimed at reducing or stabilizing publisher costs.

Several audience development executives interviewed said that they give the auditors credit for striving to meet publishers’ needs in the face of a “constantly moving target,” as Cavnar puts it. “Everything is so fluid, and everyone wants to pursue their own strategies,” he notes.

“Achieving consensus about what needs to be reported and audited isn’t easy,” agrees Lynn Bushell, VP, audience development for Lebhar-Friedman (which uses both auditors) and a member of ABC’s Business Publications Industry Committee. “Creating a basic integrated brand report is stage one. There are many more questions that can arise in phase two. Will the industry report open rates? How granular do we want to get in terms of what we report about our site users? There are so many elements that could potentially be audited and reported. But once we all decide what we need to audit, I’m confident that they audit bureaus will be prepared to implement those needs.”

ABC’s Multimedia Publisher’s Statement

Last July, ABC’s board approved a new reporting format, the Multimedia Publisher’s Statement, as a replacement for its existing Consolidated Media Report as of the December 2008 reporting period. (The consolidated report needed to be used in conjuction with the traditional publisher’s statement; the new statement unifies cross-channel data into one report, with the other channels reported on the first page as part of Paragraph 1.)

B-to-b publishers can report audited Web site activity, e-newsletter distribution, trade show activity and pass-along receivership alongside total qualified circulation data. A barchart on the front page also summarizes gross contacts for each channel and combined total gross contacts.

When the first two multimedia reports—for Lebhar’s Nation’s Restaurant News and Advanstar’s RN—were released in March, ABC president/ managing director Mike Lavery confirmed that a growing number of the audit bureau’s members are looking to report their “entire media footprints, not just their print circulation” and that b-to-bs are “leading the charge.” ABC is prepared to provide reporting options and independent verification “for all media platforms,” he said.

To be reported on the new statement, each separate channel must be audited or (as in the case of pass-along, for example) have its methodology verified by ABC. This means additional costs, but “in the markets in which we are audited by ABC, we believe that the incremental costs will be outweighed by the competitive advantages of showing our full audience reach and the differentiation provided by having ABC’s independent, third-party validation,” says Bushell.

ABC’s b-to-b buyers and sellers committees continue to actively explore integration issues and solutions, as well as the potential for streamlining reporting and auditing processes, according to Ken Shultz, VP, audit services and staff liaison for the business publications committee. Late last year, ABC also created a Digital Advisory Committee, comprising publisher, advertiser and agency representatives, to examine emerging media trends and issues and what roles auditing should play.

BPA’s New Brand Report

Last September, BPA began its partnership with Nielsen to offer a “near real-time,” tag-enabled, census-based traffic measurement bundled at no extra charge with BPA print and event audits. The partnership seeks to provide media buyers, who have free online access to the data, with comparable standardized Web metrics by market. (BPA advises members to expect a 5 to 15 percent drop in counts versus those produced by its currently used analytics systems, and provides a reconciliation process before new data goes live.)

Members who have completed their first BPA/Nielsen traffic audits—about 115 to date, with another 300 tagged in preparation for audits—will be able to show the six metrics included in the bundled package (page impressions, unique browsers, user sessions, unique browser frequency, page impression duration and user session duration) on the front page of their publishers’ statements as of June 2009 reports.

However, BPA now considers that print/Web reporting format an interim step, because as of last December, it started working with PennWell to create a new integrated database reporting format and procedures. “BPA’s existing integrated media report was too costly, because it required that we audit each channel in order to report it,” says Gloria Adams, PennWell’s senior VP, audience development and book publishing.

The concept behind this Brand Reach Audit Report is that BPA will do a single audit across all channels the property wants to report. Channels that could be audited/reported in one statement run the gamut, including magazine circulation, Web traffic, Web registrants, Webcasts, e-newsletters and white papers.

The test portion of the database audit will be priced based on the number of records in the database and the normal audit fee and audit hours associated with that size; thereafter, members will be billed at an hourly rate. The manufacturing and distribution side of the audit will also be billed an hourly rate, according to Hansen, who says BPA expects this to be “somewhat more expensive than one audit, but a lot less expensive than doing numerous audits,” for most brands. If the media owner is using a relational database—or at least a merged file of de-duplicated consumers of content—the audit will be more efficient and less costly than if a separate database needs to be audited for each platform, he adds.
The first beta audit, being done on PennWell’s Lightwave, is expected to completed by the end of June. “We believe this reflects the wave of the future,” comments Adams.

In addition to showing gross contact breakouts for each of a brand’s content formats, the draft report shows sub-totals, by channel, of records receiving content; sub-totals, by channel, of records in the database not receiving content; numbers of records with postal, email or both addresses; records with and without demographics attached; breakdowns of qualified titles by numbers and the percentages they represent of the total database; and a breakdown of geographic by numbers and percentages.

Assuming success on this and subsequent beta tests, Hansen says BPA is likely to change its membership structure so that, instead of requiring a separate membership and audit for each content platform, each brand would be considered one member with multiple platforms, with its audit fees determined as described above.

BPA is also testing two other new services, he reports. One is a search engine optimization audit service that includes a keyword ranking report that media companies can use to assess how well they’re performing in search engines and, if needed, take steps to improve performance.

The other service will document that a site has complied with the terms/conditions of an advertising insertion order. The monitoring capability would help media companies identify and correct problems speedily (to avoid makegoods), as well as help advertisers check that they’re getting what they paid for, Hansen explains.

 
The Audit Landscape: Then and Now

Despite the efforts of the two main audit firms, some publishers still push for faster audit initiatives and more flexibility of options. Nevertheless, the landscape has changed dramatically, especially in how print is represented in the media mix, competing and divergent online measurement metrics, and the vagaries of measuring brand engagement.
 
Then                                                Now
Marketers valued audits                    Some question whether marketers even read them

Print was the main battlefield            How many people are engaged with the brand across platforms?

Print was main business driver          Digital is the new savior, putting emphasis on integrated buys.

Clear audit trails                              The lines are blurrier

Clear accountability                          Divergent online measurement standards and competing interests

Karlene Lukovitz is an independent business journalist specializing in covering media and a brand extension consultant (KL MediaLink LLC) to publishing companies. Her career includes two decades as a business journalist, including editor-in-chief of Circulation Management, and three years as VP, communications for BPA.