Advertising integrity issues still plague Wine Business Monthly as email to advertisers fails to address concerns raised by media buyers, ad agencies and auditors

March 8, 2020 | Filed under Featured Articles | Posted by Lewis Perdue

NOTE: The author of this article, Lewis Perdue, is an award-winning investigative journalist, and has worked in a senior position with J. Walter Thompson advertising, and as a managing director with MSLGROUP/Publicis. He has taught journalism and communications as a member of the regular faculties at Cornell University and UCLA. He is the founder of Wine Business Monthly.

Wine Business Monthly sent a letter to its advertisers this past weekend that failed to address any of the serious integrity issues raised by numerous respected experts in the advertising media buying, and publication audit fields.

Those experts, quoted in a Wine Industry Insight article noted that WBM’s advertising promotions violated established media industry standards for integrity and transparency. –“Anemic subscription base may have prompted Wine Business Monthly’s questionable advertising promotions”

WBM’s email to advertisers and prospective advertisers (reprinted below) also failed to acknowledge that its circulation is the lowest since 1996.

That email was a smooth mantra of vague and unsubstantiated statements that did not challenge any of the serious integrity lapses stated by the experts and the data that was quoted in the Wine Industry Insight article.

Instead, the WBM email to their advertisers avoided mentioning that WBM’s key practices are unacceptable to the American Association of Advertising Agencies (AAAA), professional media buyers, and non-profit organizations who insure honesty, credibility and transparency.

Just Trust Me!

Bottom line is: AAAA, BPA, and media buyers say: “no third party audit, no integrity.”

What’s more, WBM’s “Market Coverage” concept is as meaningless now as it was

when Wine Industry Insight extensively quoted top advertising industry executives on WBM’s questionable integrity.

Few people would put their money in an unaudited bank. But advertisers are putting their money in an unaudited magazine.

What is WBM Afraid of?

The single biggest question is: why is WBM so afraid of a credible, industry-respected, third-party audit?

WBM once had just such an audit — by BPA — in 1996 and it didn’t hurt. Instead, it helped the publication establish credibility by proving that it had what it claimed, and was unafraid to let everyone — especially advertisers — know it.

The Wine Business Monthly Email as sent to advertisers and prospects

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The Wine Business Monthly Email with comments

The comments, below, are documented by third-party advertising industry leaders and experts as originally written in this Wine Industry Insight analysis. Comments are in red.

Dear (name redacted for privacy reasons,

One of our competitors has raised questions regarding our circulation. We welcome any opportunity to discuss how we report our circulation and coverage.

The questions were not raised by Wine Industry Insight. Those questions were raised by internationally respected experts in advertising, media buying, and auditing publications for compliance with industry standards. Theirs were the questions about WBM’s lack of advertising integrity.

The issue is WBM’s lack of compliance with accepted standards and practices.

Wine Business Monthly uses a stringent methodology to report our print circulation and is completed in accordance with United States Postal Service regulations.

There is no stringent methodology. They simply report the numbers they fill in on the U.S. Postal Service form.

Consulting firm A-I-M notes: “A receipt from the post office offers absolutely no accountability regarding to whom those magazines are mailed.”

A postal statement requires only basic numbers for what was printed and mailed. This WBM letter also doesn’t address why WBM’s circulation is so low — lower than 1996.

Our annual circulation numbers are available for anyone to view in all November issues of Wine Business Monthly.

“Without an audit or some other proof of a particular circulation, how can advertisers be sure the audience seeing and reading their ads are the people they want to reach?” — A-I-M: “What Are Advertisers Buying? Part 4.”

These issues are also available online, where a number of subscribers choose to read us each month.

“[a] number of subscribers…?”– What number? “A” number without an actual circulation figure is a stealth way of acknowledging WBM’s circulation stagnation.

Advertisers should address this issue by comparing WBM’s cost per thousand (CPM) with other business-to-business industry, publications.

The Standard Rate and Data Service has offered reliable and standard advertising metrics such as CPM to media buyers for more than 100 years.

Our assertions about our market coverage are based on our industry leading winery database.

That database is unaudited, lacks any information about how or when the data was collected or how accurate it might be. Without third-party validation this walks way out on the “trust me” plank.

According to this article from the American Association of Advertising Agencies (AAAA): “Audit statements are the best way to evaluate a publication’s circulation integrity, vitality and relevance to a particular target segment.”

The AAAA article defines the audit statement as one conducted by a third-party such as “either BPA, ABC or other established auditing companies.”

By comparing our subscriber base against this database, Wine Business Monthly is able to accurately assess our market coverage.

Their methodology has no basis in industry-accepted data analysis according to AAAA.

By using the same meaningless logic, Wine Industry Insight can claim its market coverage is 98.1% — thus beating them by 3.1%. That data manipulation method is demonstrably worthless.

We are confident in our methodology and are proud of our market presence and are happy to review records and the database with any advertiser that is concerned.

Regardless of how much unverified confidence WBM may have in its own methodology, the fact remains that they violate long-accepted industry standards for advertising integrity as defined by experts and sources quoted by Wine Industry Insight.

True industry confidence would rest upon a credible media audit by third-party experts which professional media buyers say are vital. An industry-standard would make sure that ALL advertisers have the same information. That levels the playing field, assures the data is verifiable, trustworthy and has integrity,

We hold ourselves to a high standard of fairness and accuracy and are dedicated to pursuing that in our editorial coverage as well as in the reporting of our circulation and market coverage.

Fairness and accuracy is an admirable editorial goal (which WBM meets), but has nothing to do with the lack of an audit that assures advertisers that they are getting what they are paying for.

Wine Business Monthly would like to recognize and thank the nearly 200 advertisers that have trusted us to deliver their marketing messages to the wine industry in 2020. We are committed to continuing to earn and justify your trust.

If you have further questions, please do not hesitate to reach out to me. I am happy to continue the conversation.

Sincerely,

Eric Jorgensen

Publisher
Wine Business Monthly
707-940-3929
ejorgensen@winebusiness.com

For your convenience, the original Wine Industry Insight article is available below

Anemic subscription base may have prompted Wine Business Monthly’s questionable advertising promotions

EDITOR’S NOTE: It is important to recognize that the news and articles created by Wine Business Monthly’s editorial staff remain a superb and invaluable industry resource. That editorial effort deserves more professional, transparent advertising support that meets industry standards for integrity.

UPDATE: This article was updated March 3, 2020 at 3:26 p.m. to clarify the ownership of bw166.

ARTICLE 1 OF A MULTI-PART SERIES

After decades of anemic subscription numbers, Wine Business Monthly has opted for questionable advertising promotions that top advertising and publication audit firms define as lacking integrity.

Wine Business Monthly (WBM) has substantially fewer subscribers today than it had in 1996, despite the fact that the number of U.S. wineries has more than tripled since then.

Professional advertising media buyers, and internationally recognized publication audit companies say WBM’s lack of a credible , industry-accepted, third-party circulation and readership audit is a primary reason not to trust WBM’s assertions.

Further, facts show that WBM’s advertising sales executives have compounded those integrity issues by creating an invalid “Market Coverage” concept based on misrepresenting data.

WBM Publisher Eric Jorgensen has been asked for comment, but none has been received at this time. This article will be updated with those comments if received.

WBM covers less than 1/3 of the industry than it did in 1996.

WBM print circulation is lower today (~6,000 unaudited) than it was in 1996 (7,761, BPA audited). This as the number of wineries has increased more than three times.

Below, WBM’s most recent Second Class mailing permit statement, (not an ad industry-acceptable form of verification).

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WBM’s 1996 Audited Circulation

It is notable that WBM’s 1996 subscription level was achieved just two years after its founding.

What’s more, that circulation level was accomplished in an environment when there was no industry-wide trade show like Unified, email was in its infancy, and circulation building rested on word-of-mouth, personal contacts and old-fashioned snail mail.

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Who is BPA Worldwide?

From Wikipedia:

BPA Worldwide is a US-based company that provides independent, third-party audits of audience claims of business-to-business and consumer media and events.

The company is a not-for-profit, (501(c)(6) organization, and is one of the largest auditors of media in the world in terms of membership, which consists of media owners, marketer companies and advertising agencies.

“Audit statements are the best way to evaluate a publication’s circulation”

Source: American Association of Advertising Agencies

The AAAA article defines the audit statement as one conducted by a third-party such as “either BPA, ABC or other established auditing companies.”

Industry voices on audits:

“Audit statements are the best way to evaluate a publication’s circulation integrity, vitality and relevance to a particular target segment,” said Sheree Johnson, senior VP-director-media services at Nicholson Kovac in this Ad Age article.

“With increasingly more advertisers seeking higher levels of advertising accountability as a media planning “best practice,’ ” she said, “it is important to evaluate business/trade publications on the basis of their audited circulation. … with measures taken within to distinguish and give preference to audited over non-audited books.”

Triennial Postal Service circulation audit does not count

While WBM states in each issue that it is “distributed through an audited circulation.” However, AAAA, BPA and AAM, said the circulation audit by the U.S. Postal Service conducted about every three years is not a valid media audit statement, but simply a verification of of the number of copies printed and disseminated.

WBM-ClaimofAudit

To advertising professionals, “audit” means BPA or AAM, not Postal Service

“Technically, their claim to be distributed through an audited circulation is true,” said a top West Coast media buyer for Publicis.

“However,” the Publicis media buyer continued, “whenever a professional media buyer uses the term ‘audited circulation’ they are referring to a credible third-party audit conducted by someone like the Alliance [Alliance for Audited Media (AAM) – formerly ABC] or BPA,” said that Publicis exec.

“I find their use of ‘audit’ unacceptably misleading because it creates a false impression by taking advantage of a commonly accepted advertising term,” said the Publicis media buyer.

BPA surveys board members who agree that using postal as an audit is unheard of in the industry

Following an inquiry by Wine Industry Insight on USPS mail permits, staff at BPA surveyed the organization’s advertising agency board members. That survey found that “none of them had ever heard of a postal audit passing as a full-fledged, independent media audit.”

Why an independent third-party audit?

Screen Shot 2020-02-29 at 11.15.57 AM In an article — “What Are Advertisers Buying? Part 4,” consulting firm Accountability Information Management, Inc. (A-I-M) said that:

Think of these organizations as the publication equivalent of bank auditors.

The audit company does not simply take the word of their media outlet client that they reach who they say they do and that the quality of their audience is good.

Industry-standard audit shows “nothing to hide”

According to a position paper by BPA Worldwide:

“Without independently audited media, marketers can’t be sure who is really seeing their messages and assume unnecessary risk with their ROI… The audit is a clear indicator of full transparency by the media owner in the marketplace. It shows they have nothing to hide ….”

Postal audits also fail for lack of vital information and for not staying current

The Publicis media buyer along with AAAA, other advertising executives quoted above, and independent third-party publication audit firms state that the basic U.S. Postal Service second class mailing permit audit (below) falls far short and is not considered a valid, credible audit for verification of advertising claims.

The USPS permit information covers only the number printed and mailed, but does not verify readership demographics or vocational qualifications.

.Jeff Kalish, VP-media director at Robin Shepherd Group, quoted in this Ad Age article, said: “the most important part of the audit statement is the segmentation of audience by industry and title.”

WBM ad execs invents a meaningless metric of its own: “Market Coverage”

Wine Business Monthly’s 2020 Advertising Planning Guide asserts that:

“95% of the 330,155,000 cases of wine produced in the U.S. are made by wineries that read Wine Business Monthly”

Why the 95%/330,155,000 claim is irrelevant

It only takes about 100 people to make that 95% claim technically true.

Looking at the data beneath the claim, WBM’s own market information shows that the top 50 wineries produce 90% of the domestic U.S. wine produced/shipped. That data comes from the highly respected data firm bw166 LLC owned by Jon Moramarco. Scroll to bottom for an update on ownership.

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That means that one WBM subscriber from each of those Top 50 companies would satisfy 90% market coverage.

And the other 5%? 50 more people could make WBM’s 95% claim come true

WBM does not publish a list of the top 100 U.S. Wineries. However, it is reasonable to give WBM the benefit of its assumption and concede that there is probably another 5% of market coverage in the next 50 or so wineries.

Thus, WBM’s market coverage could be satisfied by 100 subscribers.

For a parallel exercise in meaningless data using the WBM rationale, please see: Wine Industry Insight: Your 98.1% solution.

What does WBM’s irrelevant and misleading market coverage indicate?

Wine Business Monthly’s 2020 Advertising Planning Guide touts, “Introducing a better way to report circulation: Market Coverage.”

What does that really tell you when just 100 subscribers can make the 95% claim come true?

Why do publication reps fail to present their BPA statements? Are they hiding something, lack of knowledge, or is it that advertisers have stopped demanding proof that a publication is reaching the audience they say they do? Are advertisers no longer interested in that information? —From: “What Are Advertisers Buying? Part 3: Why Circulation Matters”

WBM doesn’t print enough copies to send even one issue to every U.S. Winery

The “95%-Better Way” indicates that WBM is aware of its stagnant circulation and is reluctant to be audited. Even the total print run of about 7,000 copies can’t be stretched to cover America’s 10,742 wineries.

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Unaudited subscriber verification means promoted circulation quality cannot be determined or verified

Finally, in addition to the “95% claim being numerically irrelevant, the quality of the subscriber data is unaudited and undated and that affects the credibility of its subscriber “Buying power” claimed. From: Wine Business Monthly’s 2020 Advertising Planning Guide:

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UPDATE, March 3, 3:26 p.m.

This article has been updated to reflect the correct ownership of bw166. This article previously stated that bw166 was a subsidiary of Wine Communications Group, the owner of Wine Business Monthly. That was incorrect.

According to Jon Moramarco, “My company, bw166, is a single-member LLC owned exclusively by me. Wine Communications Group and bw166 are equal owners of Gomberg Fredrikson & Associates, and I am the editor of the main report. I provide data monthly to Wines and Vines Analytics. ”

Wine Industry Insight