Monday, October 26, 2015

US Magazines Try New Business Modells To Boost ROI of Advertizers

ROI is a key performance index for marketers, and new technologies allow to have a clear picture of the performances of new digital media. This is one of the reason why some more traditional media such as newspapers and magazines are struggling.

I read this very interesting article, discussing about a Wall Street Journal article. In Norther America, some magazine companies have implemented a new interesting business model. If an advertizing campaign has not significantly increase sales, the magazine company will give money back. 

3 conditions:
  • Your campaigns need to be set to reach 125 million readers (about 40% of the US population, which means a huge campaign) at least three times during a 12 months time frame. 
  • Brands need to raise their budgets at the magazine company in order to cover the potential cash back cost.
  • Products sold by the company needs to be monitored by third party market research companies: Nielsen Panels, Catalina loyalty reward program monitoring... The idea is to have a clear third party able to identify objectively the impact of the campaign.

Studies established by the Time Magazine Company shows that one dollar invested in advertizing with them triggers $17 incremented sales. 

I believe the initiative is great. For sure mass market media are key marketing tools to launch new products or set strong brand equity. Actually, I am kind of deceived on how advertizers use social media like Youtube or Facebook to advertize, as it looks more like spamming than anything else. 

It is kind of a cultural revolution for those companies to think that way which I actually like. They have a strong tool to advertize, and the risk of losing is low.