The Wall Street Journal recently reported that, though a slowing economy may be widespread, the "glossies" are holding their own. In part, however, because results for the first three months of the year are already in. And, in part, because the article suggests that luxury-goods advertisers are immune to fluctuations. At the most, the article reports, some are moving away from expensive ads such as gatefolds.
- Conde Nast, parent of Vogue and other glossy magazines, says advertising pages were up 2 to 3%
- Hearst Corp., whose publications include Town & Country and Harper’s Bazaar, says magazine revenue and pages rose slightly
- Lagardere SCA’s Elle and Bertelsmann Family Circle said revenue was flat
Last year, many magazines introduced larger than usual ad-rate increases to compensate for rising costs of paper and postage, and they say they have been able to pass the increases on to advertisers without having to discount too much. The rise in both ad pages and revenue for the top titles suggests this may be the case.
Some advertising stalwarts are using the cooling economy as an excuse to boost spending and steal a march on competitors. L’Oreal U.S. consumer-products division increased its advertising spending on magazines by 75 percent in the first quarter. “Savvy marketers used this time of insecurities to shore up their positions,” says Michael Clinton, executive vice president at Hearst.
Magazines that rely on technology advertising are suffering. Red Herring has had two rounds of layoffs; Industry Standard recently cut 7% of its work force and last year scuttled a spinoff after just a few issues; and the publisher of Business 2.0 closed a business-lifestyle magazine called Fuse after only one issue. And most weeklies have been hurt as dot-com and tobacco companies and U.S. auto makers have pulled back. Wired, hit by the pullback in dot-com advertising, will likely be down as much as 20 percent. Expectations about the economy are shifting rapidly, however. Most publishers’ late summer optimism about a rosy 2001 turned to hand-wringing at the end of last year, but has been superceded by relief since advertising clients recently made their full-year advertising commitments. Though not set in stone, they are felt to be a good gauge of advertiser sentiment.
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