Media auditing in Middle East to double in next 2-3 years

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Media auditing is expected grow 100 per cent in the next two to three years in the Middle East, said Glenn Hansen, President and Chief Executive Officer of BPA Worldwide, the only global media auditing firm in the region.

Currently, he said, the number of media audited in the region could be well below 50 per cent. "I belive it can be one-fifth of the total media published in the Arab World."

Being new to the auditing culture, Arabic newspapers will need to face a bigger challenge than English newspapers, said Hansen, because they would need time "to narrow the gap between fact and fiction", and would also be required to change understanding of how the ad selling is done.

Hansen said audited publications have advantage over un-audited ones on fixing and negotiating ad rates as they go by facts. BPA Worldwide, a non-profit organisation with media firms and advertisers on its board, is currently the only international global auditing firm in the Middle East.

What is the percentage of media in the region currently being audited?
We are auditing about 100 publications - seven newspapers and the rest are magazines. Most of them are consumer magazines and a few trade publications. Now we have moved to web measurement having packaged circulation audits with free web measurements in collaboration with Nielsen.

That is very good for advertisers and will help publishers as everybody is transitioning from print only to print and online. Bundling the two together will have a big advantage.

In terms of the size of the market and the percentage that is verified, that is a tricky question to answer. First, I would separate by language - the English press from the Arabic press.

The English press was quicker to respond to auditing, while the Arabic press has just started to.

Today we announced that Al Jazira newspaper in Saudi Arabia has had its first circulation audit with 146,000 copies on average during the week. I think it is a great opportunity for the Saudi press since the UAE Arabic press has been hesitant in that regard. I believe the Saudi press will put pressure on the UAE Arabic press to acquire true measurement.

It is a wonderful time, I say definitely not because of the crisis, but because it is the most convenient and reasonable time to narrow the gap between fact and fiction in circulation claims. Everyone's circulation has probably contracted, having a smaller population or fewer people employed, and so it is an opportune time to start sending true messages about the volumes of circulation. So probably there has never been a better time for either English or Arabic press or websites and even trade shows to be measured.

Publications need to understand that they do not have to be number one in everything to be good. It is all right to be number two and still provide quality. No advertiser, anyhow, believes in the number one, but certainly a publication could find something that it excels at and merchandise it - perhaps strength in a certain geographic area, or a certain demographic.

Meanwhile, I do not have a precise answer regarding the percentage of market that is being measured, but throughout the GCC and Saudi Arabia I would estimate it at about 20 per cent.

How does auditing change or justify the ad rates?
The audited publishers are more likely to be able to hold on to their advertising rates because there is no circulation to negotiate, whereas someone who has got the gap between fact and fiction has lots of room to negotiate.

For example, if I say my circulation is 100,000 when it is actually 10,000, I have room for 90,000 to move here if an advertiser doesn't like the rates that I am selling. I am not really going through the manufacturing cost of the 90,000 copies and therefore it would not cripple my organisation to lower the costs a bit.

Now if an organisation that is telling that truth about its manufacturing and circulation, it would be a loss to negotiate ad rates.

Many stories occur when advertisers try to do inserts in a newspaper for example, and produce a certain number of copies based on assumptions that the real number of manufactured copies is almost 80 per cent less than the announced figures, and they are surprised that figures are true, where the ad agency made a wrong guess. We also hear the opposite story, with advertisers trying to insert lipstick samples in a fashion magazine and are requested to produce 100,000 samples based on the claim of circulation, while the true magazine circulation is 10,000.

At some warehouse, we are going to end up with 90,000 extra samples, with not much of an economic sense either.

Are these ways to discover the so-called gaps between fact and fiction?
Exactly. From an ad rate perspective, it has been our experience that publishers, who are telling the truth, have been able to hold on to their rates, rather than see them disappear.

Audited publications are not going out of business at the same rate as unaudited ones. Why? Because the audited media has a very good business model based on fact, while the unaudited media has a business model based on fiction. So what happens is that when the media pie contracts, audited media is becoming a larger percentage of the pie. And when ad-spend comes back into the market, the audited media will get a greater share of that.

Why do you think Saudis are ahead in auditing compared to the rest of the Gulf?
Saudi Arabia is a country, Al Jazira newspaper is a brand. The newspaper sees it as a marketing opportunity. They are taking a lead position that should cast a favourable position on them as a brand. I hope everybody would just clean up the mess now and bring back credibility to the publishing industry, at a time when economically it is needed the most.

A lot of the media in the region are still not convinced with the arguments you are presenting about auditing. Why?
There is a time between when publications express an interest and when the audit actually gets done. An audit is a retrospective look. We require at least three months, while some publishers have six months as their first period. It takes time.

We have to first visit, fill a questionnaire to know how the newspaper is distributed and, consequently, which methodology we need to use to tell us the truth about its circulation. We also ask the publications about the time they think they need to narrow the gap between the fact and the fictitious claims so that when the report comes out, what you are saying matches with the reality.

You say it has been a year of tough economy, but no one really experienced it until January. Now we are beginning to see some light at the end of the tunnel, and we are seeing some advertising spend. So I think we are right on schedule. I want the economy to get better, but being selfish I am all right if it takes a little bit longer because it will force more people to realisation that they need to handle their business in proper way.

So do they have to change their own marketing message?
Exactly. This might take six months to a year. When a publication applies for membership for audit it is allowed one year.

During that year we visit the publication as many times as well feel necessary to us understand the circulation, distribution and who the audience are, and for the publication to understand what systems and controls need to be in place to satisfy the audit requirements.

Meanwhile the publication gets its messaging in line with the new reality it is expecting. It might also do a circulation marketing promotion to increase circulation. So by the time the results come up, the circulation and the marketing messages come together.

How big is this gap between fact and fiction in the region?
It is big. I some cases it is a gap between 100,000 and 10,000 copies. I have not found a single ad agency that guessed correctly yet.

Why are English media more open to auditing than Arabic press?
I would guess that in the UAE media industry there are a lot of expats who come from countries where this is a standard. So it is quite comfortable for them if they were selling to use it as a tool, if they were in management to hold their staff accountable for performance, and if they were on the advertisers side to evaluate the media. On the Arabic side this is all new. There has not been media measurement here in this market place. Arabic media does not quite understand.

We have done some very basic research on buyers and sellers in this market. The number one belief by the media owner is that selling advertisement has to do with business relationships - the stronger the relationship the easier it is to sell. The data from the advertiser is almost the opposite. They value good editorial, the presentation of the magazine and the price of course. The last thing they value is the relationship with the media salesperson. It is more about business fundamentals.

What are the other challenges you face in this region?
It is not the region. It is emerging markets versus established markets.

As we said, in established markets there are best business practices, ethics and credibility where you can perform your work at a certain assumption.

In emerging markets where there isn't that level of ethics and credibility, you can't do business based on those assumptions.

So when we do audits in emerging markets we actually have to go to printing plants and watch them print, sufficiently enough to know that we can believe that the receipts we are receiving from the printers and the distributors show the right quantity.

So it is not the UAE, KSA or Arabic language, it is emerging markets including China or Ukraine.

What is the business growth you expect and at which rate?
We have a modest prediction for this year because of the economy, but I would be very happy if we moved from a 100 to 200 within the next two to three years. That is almost a 100 per cent.

By Dima Hamadeh

© Emirates Business 24/7 2009