Notes on a scandal

The results of the forensic audit on the circulation figures of all Media24 magazine titles by ENS Forensics was presented to the Audit Bureau of Circulations (ABC) Board yesterday, Tuesday 2 October, following which a special Media24 Board meeting was called to discuss the findings.

Then Media24 staff in the affected Women's Magazine Division were informed, as were Touchline Media staff, in a special staff meeting, lending credence to the allegations that the rot in the circulation department emanated from that division. This has been further fuelled by the alleged resignations of Touchline founder and MD, Marc Blachowitz and two of his senior management team a week ago.

Statements are also expected from the ABC which has come under fire from the industry over this debacle, as well as the Magazine Publishers Association of South Africa (MPASA). The MPASA now has the unpleasant task of trying to do damage control only a few weeks away from its annual showcase PICA Awards for magazine publishing and journalism excellence, including for the first time, a conference on consumer, custom and business-to-business magazine publishing with international speakers.

Damage control

It's particularly poignant for the industry because this was the year that the prestigious Mondi Magazine Journalism Awards were incorporated into the annual Pica magazine publishing awards to relaunch and rebrand the Pica's to include magazine journalism excellence, as well as the new categories conforming to international standards.

Competition is much tougher with the new categories and convincing the industry to go this route was not easy. Magazines with websites were also catered for as online was also added as a category for the first time. It was a long and arduous process, culminating in an experiential and viral marketing campaign direct to media owners to showcase the love of the English language and prose using Shakespeare as inspiration. Readers of Bizcommunity.com would have seen the campaign comprising Shakespearean insults on our pages.

And if the overstatement of circulation figures is found to extend into the Touchline Media division of Media24 as well, then it is very likely that those magazines will also be withdrawn from the annual awards, leaving a huge gap. Judging on the annual Pica Awards began this week already.

This is also the year that Sappi, a long time firm supporter of the magazine publishing industry, launched the much-lauded magazine advocacy programme to upskill members of the industry in promoting magazines as an attractive and preferred media channel to advertisers.

MPASA deputy chair Julia Raphaely said, in an email to the MPASA Board, that the matter would be up for discussion at the next MPASA Board meeting on 10 October. “We understand that this is potentially harmful for the magazine industry and we will do everything we can to reassure advertisers going forward. This will include a possible discussion of ABCs in the upcoming magazine advocacy programme.”

Magazine publishers in the industry and media directors who bought advertising in the affected titles feel strongly that maximum transparency is needed to ensure that the practice, if it were a “loophole” being exploited, is outed to ensure discontinuation in the industry, enabling the ABC to act. As one media director pointed out: “There's no such thing as being a little bit dishonest, you either are honest with your figures or you aren't!”

Jason Aarons (an MPASA Board member), speaking as publisher of Blue Planet Media, said that the downside was that the ABC was being cast in a bad light and the last thing the industry wanted was for publishers to think they didn't need ABC certificates and that it was sufficient to show a print bill. He added that the scandal in no way detracted from all the hard work the editors and other media workers had put in on the magazines entered into the Pica Awards.

“It doesn't change the enthusiasm and hard work people have put into the Picas. They stand for a whole lot more… and the people who have participated have produced work in an ethical and professional way. The Pica Awards are still there for the magazines that are good enough to be entered and judged as worthy entrants. One has to take the bad and make it good. The MPASA has to take a leadership role here.”

Compensation

Media directors are of course not pulling any punches, having put their clients' money into the affected magazines in good faith. It is known that some media agencies have rejected Media24's initial two-thirds compensation offer on the new titles such as In Style and True Love Babe and accepted credits on titles such as FairLady and Sarie which had their circulation overstated marginally.

Bizcommunity.com has been told that some media agencies are refusing to pay for some advertising booked into the newer titles which overstated circulations by as much as 50% and that other advertisers are demanding individual credit per product advertised, not just a blanket credit for the affected brand.

Media directors are being outspoken about the compensation issue and the fact that the magazine publishing industry and the ABC needs to be absolutely transparent about how this could happen and have apparently gone on for a few years, despite rigorous audit procedures in place internally in Media24 as a global publishing brand and the ABC, which has worked very hard in cleaning up the industry in recent years as pertains to circulation reporting.

The Media Shop's Harry Herber said it was the duty of all media agencies to go out there and get back their clients' money spent in good faith on titles judged by their circulation figures and reach as one of the main criteria in media buying decisions. He said he thought Media24's offer of compensation had been fair enough.

“But I want to know what happened and I want to know what they are doing about it… and if other titles are affected, then we need to look at the industry overall and ask if we are tight enough and examine how and not the who.”

He said thank God there was an ABC body which was there to act in cases like this and that there were publishers which subscribed to the rules so that cases such as this did come to light.

Worst case scenario

The old cliché, ‘the best of times and the worst of times' would apply to Media24 Magazines CEO Patricia Scholtemeyer's year. She is in the unfortunate position of also being the chair of the MPASA Board this year and was just awarded the Vodacom Media Woman of the Year award for her contribution to the magazine publishing industry and her meteoric career at Media24…. It is extremely sad that this should happen. The award was well-deserved for a woman highly regarded by her peers in the industry as an ethical and extremely professional publisher.

Readers on Bizcommunity.com messageboards are calling for her head and blaming the competitive culture within Media24.

So what is Media24 likely to announce today?

Worst case scenarios could be:

1. Media24 withdraws all its titles from the annual Pica Awards for magazine publishing excellence in penance. We would hope that they would not do this for the good of the industry, but only withdraw those titles with dodgy circulation certificates, as they have already done with the initial seven magazine titles affected in the women's magazine division.
   
2. Job losses are announced as media directors refuse to pay for advertising on the newer titles and international licence agreements are withdrawn. We would certainly hope that this would not happen and that those international licence holders would look at the long term relationship and Media24's overall credibility in the marketplace.
   
3. Patricia Scholtemeyer resigns as CEO of Media24 Magazines. Her track record in the industry and Media24 should speak for itself. More likely is that she will resign as chair of the MPASA and Pica Awards this year to focus on the task at hand.
   
4. The saga continues with other media owners suing Media24 for loss of revenue and market share, as rumored in the marketplace this week. Attempts to confirm with Caxton whether it was contemplating this step, were unsuccessful today.
   

Those of us in this incredible industry and part of the Pica awards rebranding process this year of course hope that those Media24 magazines that have the correct circulation figures and certificates remain in the competition for the good of the industry overall and that strong and decisive steps are taken by both the ABC and Media24.

Media24 need to be completely transparent in order to contain the fallout for the rest of the magazine publishing industry.

• The Bizcommunity.com team will be blogging live from the Media24 press conference at 1pm today, Wednesday, 3 October 2007, in Sandton, so click through regularly to blog.bizcommunity.com for updates.

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]