• by Paul Gough , September 13, 2003

Both media buyers and magazine publishers are looking at The Atlantic Monthly's plans to cut its rate base beginning in January as a harbinger of the future of mass circulation titles.

Coming on the heels of Reader's Digest's decision to slash its rate base by one million next year, many are beginning to wonder if mass titles are poised for the kind of retrenchment such publishers experienced after the ascendance of television, when once venerable books like Saturday Evening Post, Life and Look magazines scaled back in an effort to survive.

So when The Atlantic Monthly informed advertisers and agencies of its plans to cut its rate base from 450,000 to 325,000 beginning with the January 2004 issue, it sparked similar questions about the title's and the industry's vitality.

"A lot of people on both sides are watching what The Atlantic is doing here," said Steve Moynihan, managing director of Boston-based MPGArnold, a buying arm of Havas.

Moynihan and other print buyers contacted by MediaDailyNews say they understand the pressures publishers are going through as they strive to find the optimum circulation balance, weighing the needs of advertisers and agencies for high-quality readers against their internal needs for profitable subscription and newsstand sales.

"It's no longer about hitting the number and delivering the eyeballs, but rather it's about delivering a quality of audience," acknowledged Karen Jacobs, executive vice president and head of the print buying group at Starcom in Chicago. "It's not just quantity, it's quality."

While other publishers acknowledge their circulation bases have grown bloated with readers that have been generated by junk circulation programs tied to cheap subscription deals or even freebie deals tied to clubs and associations, few have been willing to go as public as Reader's Digest and The Atlantic Monthly for fear of being seen as weak on Madison Avenue.

Their moves also come as the magazine industry is wrestling with broader business issues and as it confronts the weakest marketplace in recent memory for negotiating ad rates. Whereas in year's past, many publishers could pass along increased operating expenses related to publishing and paper costs in the form of ad rate increases, the major agencies are trying to hold the line on 2004 rate hikes.

"Whenever rate bases are being manipulated, you always have to look at the product. In this case, I think, the product is solid and therefore what they're doing by honing down the rate base is really identify very specifically with who their core is, and I think it's a positive move," pointed out magazine consultant and former agency print media buyer Valerie Muller.

"There's a lot of interest in the quality of circulation, whether the last five or 10 or 15 percent is as strong as the first five or 10 or 15 percent," acknowledged Elizabeth Baker Keffer, publisher of The Atlantic Monthly.

Keffer said the magazine conducted research indicating that many of the subscribers who were signed up via third-party subscription promotions weren't committed readers and committed to renewing after their term was up.

Annual subscriptions have gone from an average of $12 to $16.20 by the end of the year, asking readers to put their money where their minds are. It may not be done raising subscription rates, either. Baker Keffer said they're testing a rate between $24.95 and $39.95.

The idea of finding out the number of truly Atlantic Monthly subscribers is appealing, and suggests it might lead to an advertising premium in the future if the rate base cut and increased subscription rates works. Buyers seem to agree.

"I'm willing to pay more money for a consumer that is willing to pay more money," said MPGArnold's Moynihan.

"Bigger is not always better and a lot of advertisers are realizing that," said magazine consultant Lou Ann Sabatier, who said there's a price to pay for publishers who have certain marginal subscribers. Sabatier said good leadership by publishers realize the magazines might take a hit but that in the long run it will gain customers who appreciate the value of the magazine.

And while it is intentionally downsizing, The Atlantic Monthly's Baker Keffer pointed out that the 325,000 rate base is a minimum per issue and not a rolling average. "We will absolutely outperform that in the early part of the year," she said. The Atlantic Monthly will also not charge higher CPMs, which will give advertisers more ad pages for the same spend.