Clients signing exclusive deals with media owners is an issue we've been hearing about a lot recently. And it seems to have come to a head, with ACP fronting up to the Commerce Commission to defend the practice and rumours abounding of editors not attending product launches and threatening to pull editorial endorsements for companies that have signed exclusive deals with competing publishers.
The main reason ACP had to explain itself to the Commerce Commission was because of complaints from Ian Wishart, who believed these exclusive deals were unlawful. ACP was cleared of any wrongdoing and Wishart retracted his comments in this letter ComComWrapUp.
A Commerce Commission spokesperson says while a complaint from Wishart was received, the complaint did not warrant an investigation, and enquiries made were sufficient enough to satisfy the Commission the Commerce Act was not broken by these exclusive deals or contracts.
"This is because we consider that ACP is unlikely to have market power. Advertisers have a number of options in respect of magazines. ACP would also face some constraint from other forms of media such as online advertising, newspapers and television," says a Commission spokesperson.
"Even if ACP did have market power, we still consider that ACP’s contracts with its advertisers (some of which are exclusive) would not prevent ACP’s competitors from competing for advertisers."
Of course, exclusivity is not unusual on TV (Countdown and TVNZ is the most noticeable at present), so why should it be any different with magazines? These exclusive deals, largely in the beauty and food space, raise all kinds of interesting questions. Are they in the interests of the client, or just discounting in drag? Are they the product of lazy agencies/marketers or a legitimate media strategy? How can you reconcile the conflict between media and PR and if those on the outer start threatening to pull editorial, how does that reflect on the magazine industry as a whole? What will happen to the smaller publishers struggling against the big boys? And what do clients gain or lose by signing up?
Typically, the relationship between the beauty industry and publishers has been a symbiotic one. It's not as simple as 'advertise in our magazine and we'll give you editorial mentions', but the women's weeklies and fashion-based media have always had an explicitly commercial bent. Editorial integrity is subjective, of course, but the general rule is that a mention is more likely to be given if the wheels have been greased and advertising has been paid for.
ACP says it has a handful of these deals, including Nestle [which has signed up with ACP for campaign only exclusives but uses a range of publishers for its other campaigns] and Elizabeth Arden, so one argument is that there's now no real imperative for competing publishers to give favourable editorial treatment to these two brands. On the other side of the coin, if a publisher is threatening to pull editorial coverage, it's not really covering the market properly and could therefore be seen as doing the reader a disservice.
If clients can get the coverage they require from one company at a better rate, it makes business sense. But that may come at the expense of being granted editorial favours in other magazines and, no matter the coverage, there will always be nooks and crannies serviced by other media that the client won't be able to get their messages into.
From a publishing point of view, ACP is trying to get a bigger share of the pot with these exclusive deals. It's business after all, so many will say fair enough. Many won't. As always, we're interested to hear your thoughts on the matter.