Magazine Publisher Offers ROI Guarantee

Cable networks are filling much of Manhattan’s blank space with ads seeking upfront dollars. But a pitch in Monday’s Wall Street Journal seemed to pop more than any of them. In a full-page ad, magazine publisher Meredith offered “ROI Guaranteed” in bold type.

Networks have offered guarantees for years based on exposure levels (ratings), but not sales results. A bunch of research companies offer data now that looks to tie ad viewing to actual purchases. Yet, with the possible exception of experimental deals or some with secondary guarantees, generally the advertiser gets the space and the advertiser has to produce results with its creative.

CBS chief researcher David Poltrack has advocated for an increased focus on so-called “single-source” data. Similarly, before he retired, ABC sales chief Mike Shaw frequently said he was eager to find ways to prove spots on ABC led to increased sales, but complained advertisers wouldn’t share their data.

Certainly, a case can be made it would be a back-office nightmare for both agencies and networks to move aggressively into using a currency with an exposure-sales link. Further, at least with the leading broadcast networks, demand is likely to remain strong enough, they may have little incentive to go in that direction.

Perhaps because the print business is under pressure, Meredith has rolled the dice with the likes of Family Circle, Better Homes and Gardens and Ladies’ Home Journal by guaranteeing advertisers a sales lift. Depending on the deal, a failure to deliver would bring free pages (or maybe cash back).

As marketers decide how much to invest in the TV upfront, it seems an opportune time for Meredith to plug its promise in the Wall Street Journal and elsewhere, hoping advertisers consider moving cash its way. But Meredith's Patrick Taylor said the timing is unintentional. “It’s a happy coincidence,” he said.

The Meredith Sales Guarantee was launched under a different, unwieldy name in 2011. Twenty-five advertisers signed up as charter clients.

Now, Meredith is trumpeting the results, saying each brand received a sales lift that outperformed the guarantee. So, there was no need to offer free ad space or any other compensation.

The Meredith program has two steps. Nielsen Homescan data is used to show its subscribers buy more of a certain product than non-Meredith subscribers. Then, Meredith guarantees for every $1 an advertiser spends, the marketer will receive incremental sales growth above $1.

Meredith says for the 25 initial brands, which included Kimberly-Clark and Tyson Foods, the ads helped produce sales increases of between 3% and 36%. Average ROI was $7.81 for every $1 spent.

Meredith says Nielsen Catalina data shows the $7.81 is, by one metric, well above the average $2.79 bump over that ads on “digital portals/ad networks” have generated in the last five years.

The guarantee program is open to advertisers who buy a national schedule across multiple titles, while purchasing a minimum amount of space for a 12-month period. Deals vary by category.

Regarding the opportunity, Kimberly-Clark executive Mark Kaline said it is “highly innovative” and Meredith “deserves enormous credit.”

He added “it is essential that other magazine media as well as all media partners continue to find creative and effective solutions to proving ROI for their clients.”

Would Kaline offer similarly effusive praise for a TV network?

Tags: television
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