Media24: media agencies take up the fight

The week-long news blackout that has been imposed by both the ABC and Media24 the past week on the issue is expected to be lifted next week, particularly in the light of the damage control which needs to be done by both the ABC and Media24, as well as the Magazine Publishers Association of South Africa (MPASA), which is only five weeks away from hosting the first combined and rebranded PICA magazine publishing and journalism excellence awards on 6 – 7 November 2007.

Two weeks ago, when the news broke that the circulation of some of Media24's women's magazines had been overstated, the ABC suspended its circulation certificates and ordered a forensic audit dating back to 2005. The titles affected are: True Love Babe; In Style SA; True Love; Leef; FairLady; Sarie, and True Love Bride.

Judging in the new categories of the Pica Awards started this week and it will be a tragedy if further magazines are pulled in the wake of new allegations around Touchline's magazines as well, fuelled by the resignation of Touchline MD Marc Blachowitz over the weekend. Media24 took a majority shareholding in Touchline several years ago.

The awards this year are also preceded by a two-day publishing conference with international guest speakers such as the president of the international business-to-business association TABPI, Paul J Heney. An event like this should demonstrate excellence, integrity and unity in an industry – the awards are after all intended to be the pinnacle celebration of a year's work.

No doubt sponsors nerves need to be soothed as well. The awards and the conference cannot go ahead without sponsor money.

Compensation

Sources tell us that clients are prepared to be pretty hardline about the compensation issue and are putting pressure on the media agencies to “take up the fight” on their behalf.

“The issue from a purchasers point of view, from a media agency point of view, is that the truth will be known and our clients, who have been in any way disadvantaged, will be compensated accordingly,” Starcom MD Gordon Patterson confirmed. “Our clients are concerned, asking ‘How can this happen?' I've been very direct on this: ‘These sort of problems can occur and no company is above this, but that within the industry there are monitoring bodies'.”

Said Nazeer Suliman, MD Universal McCann: “Media24 has advised media agencies and clients that they will receive compensation on the shortfall of circulation figures overstated in the affected magazines circulations.”

For the advertisers it's about the compensation now. “I'm expecting the media agencies to take up the fight,” said Nestlé consumer communications director Theresa Kallie.

Patterson said that he was alarmed by the news of such eminent resignations, referring to the Touchline news. “If this is indeed correct, then it's a story that needs to be pursued; it's shocking timing.

“Media24 has an excellent reputation as the largest magazine publisher in the country and I have no doubt that if indeed the audit confirms that inappropriate decisions have been made, whether by accident or on purpose, then I'm sure the appropriate action will be taken and clients will be compensated accordingly,” he added.

“Reality check: this isn't a question of putting the numbers in the wrong column… if it is indeed found to be more substantive than mere human error, then the people involved face serious consequences,” Patterson opined.

“The actions of Touchline Media do raise questions. The initial sentiment in the industry was that this was contained in the industry to a small group of titles, but we are now finding it is unraveling a little further. If anything, it demonstrates vigor to the Media24 inquiry.”

Suliman said they would have to sit down and do reconciliation with its clients such as L'Oreal, which was a big spender across woman's magazines, and try work out what was owed in compensation.

“It's a shocker… it throws their [Media24's] credibility out. What frightens me is why it's taken so long to uncover? But it's the culture that's perpetuated it, no doubt… targets pressured, jobs on the line…”

Patterson highlighted the fact that many other publishers in the magazine industry will be watching developments closely to ensure that their processes and systems follow the rules: “What will also be interesting is the ripple the Media24 issue has created in the industry. Many other publishing groups will also be doing soul searching as the facts emerge as to what has been happening. Publishers' boards may be insisting that ABC certificates are signed off by senior staff in future.

“It is a bit of a shock to the industry, but a lot more beneficial than finding out that it found out by whistleblowers, the fact is that the systems put in place worked… As long as clients are fairly compensated for being misled, then we have to move forward. We can't dwell on this.

“The harder companies invest time and effort in obscuring the truth, the longer it will carry on. From a media independent point of view, we need to know what the facts are. We need to know that this is not happening on other titles and within other groups. Whatever the loopholes are that allowed this to be carried on for so long, we need to be reassured that the same loophole is not being exploited by anyone else. No doubt other publishers like Caxton, Associated, and other publishing houses and the ABC will be checking that this hasn't happened,” Patterson emphasised.

Transparency

Sources also tell us that senior journalists and editors within the corporation are far from happy with the way the whole debacle has been handled in the media. They feel the news blackout has led to criticism and a more hardline stance in other media reports on the issue as there is no further official information forthcoming, but a slew of speculation. Staff within Media24 with nothing to do with the circulation issue are feeling that they are somewhat the victims in all of this and that strong leadership is needed to deal with this reputation crisis.

The media directors and clients who spoke to Bizcommunity.com are somewhat kinder, and have commended Media24 for its handling of the crisis and consistent communication with stakeholders.

Patterson said: “The approach by the ABC and Media24 is the right one.” Suliman agreed that Media24 had been quite transparent in its handling of the situation, sending emails directly to clients and agencies to communicate the status of the issue. “It sets the tone going forward.”

Bizcommunity.com media and marketing analyst Chris Moerdyk said he was saddened by the whole issue as Media24 had always played by the rules. “It's a good thing this has been uncovered, as the one thing marketers can count on is the ABC figures. There's nothing like having audited sales to show what's what.

“On the other hand, it's sad that Media24 have had to bear the brunt of this. They have always, in my opinion, played very strictly to the rules. They don't have any track record of doing anything funny with their figures. But it is good to see the ABC system working. This is probably the most trusted indicator of sales of newspapers and magazines.”

Patterson said that a reputation management crisis such as this one separated true leaders from the rest and the ability to handle these issues in a true and transparent and moral way.

Patterson agreed that the mere fact that the irregularities had been detected was something that should be acknowledged by the industry that the ABC processes were working for small or large publishing houses. “I am saddened by what has occurred, but I'm glad the right systems were in place.”

“Thank goodness the ABC rules were rewritten and I can only complement the publishers who sit on the ABC board for their willingness to provide greater transparency.”

Impact

In the future? “We will be more cautious, meticulous and look at circulation breakdowns in detail. We won't take an ABC certificate at face value,” Suliman said.

He also raised the question as to what would happen to Touchline Media's international licence agreements if it were revealed that this Media24 division also had irregularities.

“Advertisers take the ABC as an authentic endorsement.” Nestlé's Kallie agrees. “We have to, it's all we have to work with.”

“We will have to in future interrogate the media owners. The problem is that it destroys the credibility and the reliability of the brands involved,” she said.

Kallie took the argument further: “Print media is fragmenting to the point where it's becoming unstable. We can't be looking to print as a niche medium and this polarises it even further. One never forgets these things, it leaves a bad taste in one's mouth – we have to be careful with the credibility of our brand, we have to be in a credible environment. The whole media industry is in flux, radio is too expensive, prime time oversubscribed and magazines are becoming unreliable and too niche, it appears.”

Patterson pointed out that this was also an opportunity for clients to re-engage with the industry. “There's been a flurry of emails from clients saying they must get their act together – participate in the business. It's their money… Clients need to form a coherent body representative of marketers in this country, and secondly, to start shaping the research we use on their behalf and they pay for, to make decisions. This is after all a tripartite alliance between clients, media agencies and media and it is currently skewed, overly controlled by the media owners.

In conclusion, Patterson said: “I have a strong sense that no stone will be left unturned. We will again get back to an extreme transparent situation… Speculation is not healthy; it only inflames concerns among clients and potentially does damage unnecessarily to Media24. Nothing spreads like bad news, but we need to be responsible in this.”

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]