Media24: profit and performance pressure cooker

And make no mistake: the rest of the media publishing industry, as well as key stakeholders (media agencies, advertisers and PR agencies), are not being let off the hook by our readers either – pointing to the pressure placed on publishers by clients and media buyers for bigger ad discounts and concurrent editorial support as contributing to the problem.

While no one is excusing the actions of a dishonest few who have been caught out, it is important to note the wider issues in this regard in an industry which has grown phenomenally over the past decade, and not just bash the one publishing brand caught in the spotlight.

”Naïve”

As Bizcommunity.com media and marketing analyst Chris Moerdyk speculates today: “It is more than naive to believe that Media24 is the only media company in which desperate executives have tried to cover their backs or load their wallets by fiddling the figures and conning the auditors… Personally, I think that a lot more media owners than we think have watched the Media24 saga unfold and have muttered from the sidelines: ‘There but for the grace of God go I....'

“In spite of the fact that ad spend has increased dramatically in the past few years, leaping from the doldrums of R9 billion a year not so long ago to more than R20 billion now, the advertising environment is still massively competitive and undeniably bloody. Being an ad sales rep these days is not for the fainthearted and it's no secret that media owners indulge in every enticement possible to get a share of the pie.

“Incentives from lunch, theatre tickets to sporting events, luxury getaways and all sorts of other things verge on the ludicrous at times and many a media buyer will attest to some of these, along with an occasional bout of discount madness, getting awfully close to outright bribery. It is a fair assumption that when these enticements don't work, the temptation to play games with circulation figures must be overwhelming,” Moerdyk added.

The Audit Bureau of Circulations (ABC) has been at pains to point out in various statements this week that it carries out routine checks on all publishers and that “no significant discrepancies” have been discovered at other publishers, and that these same routine checks were the ones that uncovered “significant discrepancies in circulation” at the Media24 magazine titles highlighted.

The blame game

Readers on Bizcommunity.com's pages go further, blaming advertisers and media agencies directly in what has been one of the biggest issues to be debated on our message boards in the past year. Under the cloak of anonymity, readers have given full vent to their opinions and the thread is much the same: people are still calling for the head of Patricia Scholtemeyer, CEO of Media24 Magazines, even likening her to Manto and Selebi in that she hasn't resigned.

“Maybe we should suggest that Patricia, Manto & Selebi have a get together and give a joint statement about how to manage one's department…” quipped ‘anonymous'.

What is gaining momentum concerns the “hypocrisy from the ad and PR sector”: “Without excusing Media24 for what's happened, would the likes of ‘Mr Gerber' (referring to Media Shop's Harry Herber) not like to put their hands up and take responsibility for their role in a general climate of unabashed, utterly unsophisticated expectations that clients have when it comes to media coverage? The same expectations that those representing them bump up and inflate in order to drive their own profit margins?” asks reader ‘Flim', who goes on to rant: “The amount of pressure that ‘clients' place on editors, journos and sales staff has gotten completely out of hand. ‘Added value' has come to mean ‘you give us coverage or we don't advertise'… What about the seemingly-endless threat of pulling advertising when clients don't like the coverage they're getting/not getting? When you compare the sort of threatening, lame-assed behaviour from people who don't understand the meaning of the word ‘newsworthy', you have to wonder why the response to what essentially amounts to a little massaging of the figures seems to be so over the top? Sure, it's wrong, but then most of the ads appearing in these magazines are lying - or at least being economical with the truth - about what their products can do for people too... It's all part of the same process. We're ALL to blame for this kind of thing. And it's time people accepted that this has happened in a context created by the same people who are now complaining.”

The debates raged through the day, with comments appearing almost instantly as each new article was posted on our Home Page: www.bizcommunity.com. Readers urged others to “get real” and called others “morons” and “idiots” for not understanding what the “real story” was behind it all, accusing the industry of amnesia and blaming media fragmentation in the industry for creating the conditions: “Sales reps and others have been bumping up circulation figures in their pitches to advertisers forever – and agencies are often at fault for not checking circulation figures and other value propositions. The days of 'give the ad to the chick with the biggest boobs and shortest skirt are not over!' said ‘Ed'.

”Devastating”

There are pages of more in the same vein under all the stories on Media24 and blog posts on Bizcommunity.com which led the way on Wednesday, 3 October 2007, with live blow-by-blow blogging from the first Media24 press conference which was followed by media locally and abroad, according to emails from ex-Media24 and Touchline employees. What this doesn't highlight is the devastating affect this has wrought on the staff of Media24 not involved in the scandal. The editors, journalists, marketing managers, admin staff, sales people, and circulation managers of the majority of ‘clean' titles.

Said one senior Media24 employee to Bizcommunity.com, speaking on condition of anonymity: “There was absolute panic when this broke. We couldn't understand how it could have happened. We've all been audited. We are horrified at some of the senior people named... Touchline were the untouchables in the company, the heros, always winning awards, with great titles, and so aspirational to all of us within the group, as a division.”

The insider said yes, there were huge pressures for profits, but that didn't “mean you lie”. They said there were still many unanswered questions about why employees would take such action, why the auditors didn't pick up the discrepancies before. “The ABC must look harder at free copies and free bulk distribution, bulk requested – the ABC has got stricter but we all know there are still publishers exploiting it.”

Another senior Media24 insider told Bizcommunity.com that staff were set “ridiculous targets” and people were pressured too far. “These people probably felt they needed to perform. The problem is that it taints all of us. It is really morbid here, there is such a mood of despondency – not just in the magazine division, across the company.”

This insider said the story was “a long way from being over”. “It is very sad, there are still a lot of unanswered questions and I still think a lot of skeletons will still come tumbling out the closet.”

For more:

• Media24: now the PR really starts [article]
  
• [No Comment] ‘Mayhem at Media Park' [blog]
  
• Is Media24 the only culprit? [article]
  
• Media24: profit and performance pressure cooker [article]
  
• ABC routine audit checks on all publishers [article]
  
• Zoopy interviews Hein Brand, Steven Powell and Di Paice [blog]
  
• Thursday's Media24 press conf in CT [Zoopy videos] [blog]
  
• Potential criminal charges in Media24 scandal [article]
  
• How did it all go wrong at Media24? [article]
  
• Touchline MD faces disciplinary action [article]
  
• "My heart bleeds for the editors" [article]
  
• Touchline Media lied about circulation figures [article]
  
• Notes on a scandal [article]
  
• Wednesday is D-Day for Media24 [blog]
  
• Media24: media agencies take up the fight [article]
  
• Are the Picas at risk? [blog]
  
• Touchline under scrutiny [snippet]
  
• Media24 staff responsible for circulation irregularities [article]
  
• Media24 restates certain ABC figures [article]
  
• Patricia Scholtemeyer honoured for job creation [article]
  
• Scholtemeyer, Lowe Morna: Vodacom Women in The Media finalists [article]
  
  
• Video coverage on the Thursday, 4 October 2007, Media24 press conference in Cape Town:
  • Zoopy interviews Hein Brand, Steven Powell and Di Paice [blog]
    
  • Thursday's Media24 press conf in CT [Zoopy videos] [blog]
• Breaking news blog for coverage of the Wednesday, 3 October 2007, Media24 press conference in Johannesburg: http://blog.bizcommunity.com [blog]