Castor's Auditing deadline looms

by ArabianBusiness.com staff writer on Sunday, 24 December 2006

The warnings have been repeatedly made and now there is just one week before publications in the UAE which haven't yet received or applied for a circulation audit face being cut from advertising schedules or at the least have their page rates reduced.

But despite a surge of applicants in 2006, many of the country's publications have failed to take the advice seriously, with many believing the threats have no substance and will not be acted on.

In late 2005 the Circulation Audit Steering Organisation (Castor), born out of the formation of the GCC Advertisers' Association, which is made up of 30 of the region's biggest advertising spenders, issued a stern warning threatening to pull advertising from un-audited publications if they did not apply for audit by 1 January 2007.

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But with more than 200 magazines and newspapers being published in the UAE, audit firm BPA Worldwide the only Castor recognised audit company in the country after the Audit Bureau of Circulation UK pulled out earlier in the year lists 34 publications that have applied for audit, and 19 audited titles.

Of those listed, six are Arabic language publications, seven are in both Arabic and English and the rest are English newspapers and magazines.

Eric Mirabel, business development director at Omnicom Media Group and a Castor member, admits the committee was disappointed by the numbers, but not surprised by them.

"It is unlikely to expect that most titles will have an audit or will have applied for one by January. We would have hoped for a higher take-up of audit from several segments of the market but, at the same time, it's not exactly a huge surprise either.

"You have to be realistic and the experiences of the past haven't really been that positive otherwise we wouldn't be here today," he says.

Castor member advertisers stand firm on the threat they made last year, claiming they will favour audited publications over unaudited publications.

Steve Wheeler, vice president of advertising for Emirates Airline, says the company already adopts this practice and warns that it will in some cases pull advertising from publications it already advertises in if they do not meet the Castor deadline.

"A lot of titles are not audited now and Emirates does not publish in them. One of the main reasons why we don't is because they can't prove to us their distribution so it's already happening," he said.

He adds: "In terms of the more contentious issue of pulling advertising from titles we already publish in, then absolutely we will."

Jan Zijderveld, chairman of Unilever Middle East and of the GCCAA, says the group never had a plan to issue an "all out ban" on unaudited publications, but adds: "What we advise, and what we have agreed in the GCCAA, is that we will start skewing advertising towards favouring the publications that are audited versus publications that are not audited."

Castor's approach to the situation issuing a threat to publications has been criticised by some publishers, who say more time should have been spent educating the owners of those publications, rather than setting a strict deadline.

Ian Fairservice, managing partner at Motivate Publishing and board member of the International Advertising Association in the UAE, says: "I fully support the initiative that people should be audited. On the other hand, I think that an organisation like Castor coming out and making these sorts of blanket threats to the industry is actually unhelpful. I think that from 2007 onwards, instead of there being a negative threat I would much rather hear people speaking positively about why the advertising fraternity will be placing more emphasis on advertising in audited publications."

Natalie Shahrokni, marketing manager for Connector Publishing, acknowledges that Castor had to push this initiative, but adds: "On one side they have to bear in mind that the industry isn't ready so they are kind of being harsh to be very honest."

Particularly slow to take up the initiative have been the Arabic language publications in the region, and industry experts have differing views on why this is the case.

Stuart Wilkinson, director for EMEA at BPA Worldwide, believes the message could simply not be getting across to Arabic language media owners through media channels.

"One challenge on the industry's side is that a lot of Arab media owners are not reading marketing and communication magazines. The BPA on its side is communicating with the Arabic media owners but is the industry press getting to these people or not?"

Fairservice says he does not believe Arabic publishers yet recognise the importance of audit because of the different ways they do business with their advertisers.

"I think even more than the English language media, the Arabic language media is very much relationship driven between the publishers and advertising agencies and clients. And perhaps neither side can yet recognise the importance and the value of audit."

Mirabel adds: "They are probably less exposed to this kind of scrutiny. The argument we usually get is if the others don't do it, why should I?"

There are obvious reasons why some publications will be reluctant to get audited. The process lays bare their true circulation figures, which in many cases will fall far short of the inflated numbers they have quoted in the past. This means some publications would rather miss Castor's deadline and incur loss of advertising than risk the embarrassment of their true circulation figures being published, as Shahrokni points out.

"I don't think all the publications will follow suit by the deadline, simply because they've over-stated their print run and nobody can go back and say we actually print less than we stated," she says. "If they audit the print run, that's going to be less than they've been claiming for the past few years, and that's not going to give them a good reputation."

Mohamed Al Mulla, director of Dubai Media City, is a strong supporter of the audit process, but acknowledges it will put some publications at a disadvantage.

"People used to throw figures in the air they'd say 'I distribute 50,000 copies, I distribute 100,000 copies'. The moment you do a media audit there is a risk that when the right figures come up they will be much lower than what the reported figures are. So people might lose credibility."

But it is precisely because of the myths surrounding circulation figures that Castor is keen to carry through its auditing initiative.

Aspen Aman, business development manager for the Middle East at BPA, describes the lack of transparency over circulation figures in the region as creating "a really corrosive atmosphere of distrust and cynicism".

"Everyone is blaming everyone else for perpetuating this foggy atmosphere that we all live in terms of numbers right now.

"I think when you have a vastly unregulated industry, when you have a cowboy environment, people are going to act like cowboys and that's the reality."

This "foggy atmosphere" has meant companies who have chosen to advertise in publications in the Middle East have done so in a blind leap of faith, with no clear evidence to show they are making the right investment and on the basis of often massively inflated circulation figures.

"The situation has made it possible for people to take advantage of the absence of widespread data to be able to make claims which are in many cases very exaggerated," says Fairservice.

Advertisers are, however, no longer prepared to tolerate this situation and are now demanding the same transparency that exists in other more developed markets.

"We need a measure which is comparable and reliable between the various publications to get a fact-based currency to compare the various mediums with," says Zijderveld.

"Everyone else is doing this and the Middle East is one of the last places in the world which does not have a common currency on print," he says.

Fairservice adds: "It is not just a matter of this being a good idea. It is absolutely essential in a developed market. You can't have the number of publications that exist now without some kind of statistics and reliable data for media buyers and advertisers themselves to be able to check on the claims which publishers can otherwise make."

But another threat looms for the region's publishing industry. Unless auditing becomes widespread, advertisers will cease to see print media as worth investing in and will shift their budgets elsewhere.

"With the proliferation of media choices that consumers are being exposed to, clients are becoming more and more critical of where they want to spend their advertising dollars," says Philip Jabbour, director of marketing and new business development at Starcom Mediavest Group.

"You will get situations where there are some clients who say 'I don't know the measurability of this medium' and they will just drop it, irrespective of how good or bad it is," he adds.

Both Emirates and Unilever admit they have already turned their sights to other mediums such as online, television and in-store promotions and say that the lack of transparency within the region's print media industry is one reason behind this.

Wheeler predicts that, worldwide, online is to become the dominant advertising medium for Emirates within the next five years, accounting for 25% of its total spend, compared to around 8% now.

Within the region, he said, lack of auditing could accelerate Emirates' move away from print advertising and towards online advertising.

"It's difficult to put a figure on it, but if the pace doesn't increase, like any sensible marketers, we'll look for channels which can prove who they are talking to and can prove a return on investment.

"Internet penetration is increasing. Broadband penetration in Dubai is surprisingly high and we have to go where our business takes us. We will also not hesitate to accelerate if some of the publications don't audit themselves."

He adds that one of the biggest advantages of online advertising is its accountability compared to unaudited print publications.

Mirabel too believes the measurability of online advertising will make it an increasingly attractive alternative to print advertising if publications continue to resist auditing.

"There's a belief among the members that enough is enough, and that if they are not prepared to make the move and meet us where we want to meet them then we will have to find alternative ways to advertise. And I think one of the potential winners of this is online.

"It's eminently measurable and, to a large extent, a lot of the target audience that is required by advertisers can be found online," he adds.

Zijderveld says Unilever will increasingly turn its sights towards in-store advertising and other mediums if auditing does not become widespread among the region's publications.

"Unless print cleans up we will shift our advertising to where we think we get more bang for our buck.

"The area where we are investing a lot is in-store."

With two of the biggest ad spenders, claiming they will abide to the commitments made by Castor in public at least it remains to be seen if the others will follow suit.

The long-term success of print auditing in the region will depend on how closely advertisers stick to their promises. The coming year promises to be a defining moment for both the region's advertisers and publishers.

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