The summer started with the news that, according to the Publishers Information Bureau (PIB), consumer magazine ad pages and revenue had dropped 28% and 21%, respectively, in the first six months. Needless to say, advertising declines have continued on the business side as well - B2B pages were down a whopping 30% in the first half, according to Business Information Network (BIN). Not at all coincidentally, about 15% of all B2B publishing jobs are expected to be eliminated this year.
Oxbridge’s MediaFinder reported that 279 consumer and business magazines shuttered in the US and Canada during the first half, compared to 187 launches - and that the shut-downs were accelerating (95 closings in Q1, 184 in Q2). Closings included 27 regional, 14 lifestyle and 18 construction titles. An additional 43 brands folded their print editions in favour of online-only.
In the consumer sector, in August, news of Time Inc’s folding the print edition of Southern Accents (down 40% in ad pages in the first half) barely made a ripple, and was quickly eclipsed by Reader’s Digest Association’s announcement that it is filing Chapter 11. The plan calls for turning ownership over to its senior lenders and reducing RDA’s debt from $2.2 billion to $550 million. The company had already announced that it will cut Reader’s Digest’s US rate base from 8 to 5.5 million and reduce frequency from 12 to 10 times next year, and focus on producing new “Reader’s Digest version” products available via digital and mobile, as well as print.
Meanwhile, with the exception of Time Inc’s InStyle (ad pages up 3%), September fashion issues are considerably less hefty this year. Big ad page declines were posted by Hachette’s Elle (-21%), Hearst’s Harper’s Bazaar (-26%) and even Condé Nast’s Vogue (-37%). Condé also announced September ad pages for its other titles, including eye-opening declines for W (-53%), Allure and Gourmet (each down 52%) and Self (-51%). Architectural Digest, Bon Appetit, Condé Nast Traveler, Glamour and Wired were all down between 40% and 45%, and Vanity Fair was down nearly 37%.
But it was Condé’s move to bring in management consulting firm McKinsey & Co that seemed to generate the most trade media attention (and schadenfreude). In addition to speculation about which titles and jobs might be axed, there was a piece by the New York Observer’s John Koblin detailing the “hell” that the recession is already wreaking within the walls of the “emerald tower” in Times Square (such as a shut-off of free bottled water that might actually drive some to consider drinking tap water).
Now, as I write this, we are days away from the release of first-half ABC Fas-Fax numbers, and the next onslaught of stories about newsstand losses. ABC extended the first-half filing deadline due to reporting problems created by the “interruption” in US newsstand distribution early this year. (See John Harrington’s summary of the full events in the July / August issue.) Several weeks of serious disruption in retailers’ supply of magazines wasn’t exactly what the doctor ordered at a time when the economy is already taking a heavy toll on newsstand sales. Indeed, estimated first-half numbers already filed on ABC’s Rapid Report system by quite a few magazines show many suffering drops ranging from the mid teens to over 30%.
None of which will make it any easier to keep circulation costs under control as publishers struggle to meet rate bases. Still, given the advertising-driven US magazine model, it’s the fundamental shift away from spending in print and other traditional media, not circulation, that will continue to drive more print magazines to their graves.
Many consumer product marketers maintain that online and social media are superior channels for the relationship building that now drives their strategies. However, management strategists the Boston Consulting Group (BCG) recently pointed out that neither online media nor the “below the line” marketing channels like PR, events and in-store promotions that have been getting growing shares of marketer budgets are capable of replacing traditional media when it comes to providing cost-effective mass reach. And won’t be for some years.
In BCG’s view, advertisers and agencies need to recognise that the threatened economic viability of traditional media companies also creates a marketing crisis. They need to develop integrated metrics solutions that address the growing overlap among media channels, to enable creating media plans that recognise and optimise the respective strengths of digital, traditional and below-the-line channels. Magazine and other traditional media companies, for their part, need to work with advertisers and agencies to develop relevant, sustainable business models - models that, for instance, include embracing cross-company partnerships.
Easier said than done, to be sure, but integrated metrics systems and cooperation among media, marketers and agencies do seem both urgently needed and long overdue.