Why publishers will struggle to make EMMA the industry currency

Research company IPSOS is today trumpeting the signing of Mediabrands and Match Media to readership metric EMMA, but Nic Christensen argues any celebration is premature. 

As far as head fakes go, you have to admire what’s going on in today’s announcement by EMMA that it has signed its first media agencies.

Today IPSOS boss Simon Wake, who runs EMMA, celebrated the signing of both IPG Mediabrands and Match Media, by announcing how the readership metric was “a step closer to becoming the industry currency.”

But while they may be one step closer, there is still a long way to go before EMMA becomes the industry currency, on which advertising rates for print and magazines are determined.

And there’s possibly an impassable mountain or two in between.

Let’s start with today’s smaller signing. IPSOS today announced it has brought on board the well respected John Preston and his independent operation Match Media. This is a deliberate choice by IPSOS which in signing the most high profile of the independent media agencies in Australia, is actively encouraging other independent agencies to join and creating a sense of momentum around EMMA.

I also wouldn’t be surprised if the coming weeks sees more such announcements drip fed out as IPSOS tries to present the image of media agencies rushing on board.

The drip feed tactic has certainly been used in run up to EMMA’s launch when everything from its name, to its launch date, to its advertising campaign, to the confirmation of monthly releases of data, needed a separate media release.

And then once you got past today’s media release, it becomes clear that Preston isn’t abandoning Roy Morgan, rather Match Media is merely agreeing to trial EMMA, alongside the existing product.

There was also no discussion around the commercial terms which IPSOS has reached with both Match Media and the much larger Mediabrands group, which includes media agencies UM and Initiative.

While all parties are claiming commercial confidentiality, media buyers have been widely talking about the how for the last few months EMMA’s sales team has offering its research at a generous discount to media agencies who sign up before Christmas.

As reported a month ago, those terms included free access until July next year, and then offering additional discounts on top of that for at least the medium term. These offers saw Roy Morgan goes as far as to accuse EMMA of potentially using ‘predatory pricing’ in order to to drive them from the market.

Let’s be clear: no media agency is likely to pay for IPSOS research between now and next July and from then it’s, at best, a half price deal.  And that’s if the initial agencies such as Match Media and Mediabrand haven’t managed to get even better terms by being the first to sign up.

Part of the reason IPSOS is being forced to give its data away is the need to get it into agencies and then convince the agencies to actually use it. Ergo, today’s other major announcement about free training for more than 500 agency staff, all provided by the research firm.

As Simon Wake himself explained to Mumbrella today: “We understand that this represents significant industry change and so to minimise the disruption for agencies an extensive and tailored training program is part of the package.”

Getting acceptance for EMMA is one challenge and training will help but it doesn’t address the bigger issue that EMMA is not a broader channel planning solution and the reality is for better or worse, many agencies still use Roy Morgan to get an understanding of consumers across various media, not just print and magazines.

On this question, Mediabrands chairman Henry Tajer said he was confident EMMA would eventually get there.” I think you will find that EMMA will (eventually) have all those capabilities, I think it is just a function of timing and roll out,” said Tajer.

Perhaps, but other media buyers are much more sceptical. “Agencies don’t buy Morgan for readership, we buy it to get a balanced and very complete view of the media landscape and the consumers within it,” one senior media buyer told Mumbrella, when we first started reporting on these challenges.

This is something that IPSOS and the publishers who are funding The Readership Works, the body behind the metric, must overcome if they are to make it an industry currency.

It is a formidable challenge and a mountain that I have yet to see them demonstrate that they will overcome.

But this is not EMMA’s only challenge. The real mountain to climb is how do you get media agencies to agree to a higher rate card based on the significant increases in audience that EMMA shows compared to Roy Morgan.

Many of these audience sizes, arguably, defy logic. Almost all publishers have seen bigger estimated readerships under EMMA, while some such as The Australian Financial Review have twice as big an audience as under the alternative system.

All while circulations, eg. the hard copy number of newspapers actually be delivered, have fallen by double digits, again for another consecutive year.

Frankly many media buyers are more than aware of the play going on here.

Indeed it was interesting to see Danny Bass, who heads media buying for Australia’s biggest single media buying point, WPP’s Group M media agencies, raising the alarm on this even before the first round of EMMA numbers were released.

Bass specifically warned the publishers that any attempted hike in rate card would be treated with deep suspicion.

“Given the pressures that print publishers have been under for a number of years we are looking closely at the data and we will look closely at any changes to the pricing model,” said Bass back in August. “They must be reflective of the overall media landscape.”

How publishers negotiate increased rate cards in the coming year, on the back of 20 per cent plus falls, year on year, for most major newspaper circulations will be interesting to watch. Yes the audience is migrating online and it is entirely plausible that Morgan did not fully reflect the publisher’s online readership.

But media buyers are not exactly ignorant of the structural factors facing print and magazine either. Just look at the latest SMI data, if you’re in doubt about that. 

The reality is it’s a hard sell and it is arguably for these reasons that IPSOS played a trump card today with the signing of major agency group Mediabrands, one of the bigger media agency groups in Australia.

However, the EMMA announcement glosses over the fact UM, the biggest of the Mediabrands agencies, has as a client newspaper publisher News Corp Australia, an account which is estimated to be worth in excess of $60m in billings to the agency and its wider group. News has been the biggest driver of the latest attempt to see off Roy Morgan.

Mediabrands chairman Tajer dismisses this as a factor this morning saying: “No, (News) doesn’t have anything to do with it.”

“We have a cross section of clients. Having the biggest investors in newspapers and print in meant that having EMMA was the right thing to do.”

That may well be true, given Mediabrands has the NSW and Federal Government accounts. But the reality is that signing up also keeps a key UM client happy, plus they know the other major media agency groups will be more reluctant to sign up, if it strengthens publishers’ case to increase their rate cards.

The key publishers have already begun moving in that direction – News Corp, Fairfax Media, Bauer Media and West Australian Newspapers have all said they would use EMMA as the metric for future rate cards.

However as one media agency boss told me recently: “Publishers can talk all they want about EMMA, but the reality is if they try to raise the rate cards on print and magazines then we will simply shift more to online and other media.”

This firm line is even hinted at by Mediabrands boss Tajer who said today: “I can assure you News Corp Australia is a client of Mediabrands but we also go head to head with News when representing our clients and the fact that they are client doesn’t stop us from expecting anything but the best performance and most competitive positions from them.”

Indeed. I’d expect nothing less from Tajer or his fellow media agency bosses. The next six months as agencies review EMMA and publishers begin discussions about increasing the rate cards will be interesting.

Nic Christensen is deputy editor of Mumbrella and Encore Magazine


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