• by Larry Dobrow , April 7, 2004

At some point, you'd think the year-over-year comparisons for magazine ad demand would begin to get easier, but publishers recorded their tenth consecutive month of ad page erosion in March, according to estimates released Wednesday by the Publishers Information Bureau. However, positive trends in a handful of ad categories, coupled with a less steep page decline than in previous months, suggest that if the magazine business isn't on the verge of recovery, it's in a less precarious position than it has been for the majority of the last 18 months.

In March, ad pages slipped 1.9 percent against the year-ago period, although revenue increased 6.7 percent. For the first quarter of 2004, ad pages are off the 2003 pace by 2.3 percent, and revenue is ahead of it by 7 percent. The March page slump marks the tenth straight month of negative month-on-month comparisons.

Despite this, pundits noted that the January-March PIB percentage drops can be attributed at least in part to the relatively robust first quarter of 2003. "While the continuation of declines in paging are discouraging, the numbers overall and especially for the two largest categories--automotive and drugs/remedies--were strong in the first quarter of last year," explains Rebecca McPheters, president of magazine consultancy McPheters and Co. "This year's declines were not sufficient to counterbalance those gains."

Hearst Magazines research director Jay Powell agrees, describing the March and 2004 year-to-date page decreases as "marginal." He points to the resurgence of the financial/insurance/real estate and public transportation/hotels/resorts categories, in which pages are up a modest 1.7 and 1.8 percent over the first quarter of 2003, as a positive sign.

"If those types of pages are up, I would imagine that the overall ad climate is going to improve," he says. "Those [categories] are the ones that were dragging everyone down last year."

Not that everybody agrees with this sunny outlook. Brett Stewart, senior vice president, director of strategic print services at Universal McCann/New York, believes that magazine publishers' optimism is misplaced. "You ask them 'how's business?' and they all say 'really, really good.' But from everything I'm hearing, it just can't be good," he says. "There's lots of bravado out there right now."

Among other things, Stewart bases his opinion on the increasing prevalence of flexible ad deadlines, which are something of an oxymoron. "Magazines are closing later and later each month, which tells you that there's space to fill." He also cites pressures created by the uncertain geopolitical climate and the weakness of the U.S. dollar abroad.

Powell notes these same bigger-picture factors, but instead in reference to his outlook for the rest of the year. "Even if you're positive [about the months ahead], the mindset of advertisers is conservative right now," he explains. "With what's going on in the world and the election coming up, there's this sense of 'let's not go crazy with ad spending until things settle down.'"

McPheters, for her part, hopes that 2004 doesn't follow 2003's trajectory, in which business weakened substantially as the year progressed: "Last year, we had a relatively strong first quarter, but ended up down in pages for the year. I'm hopeful that this year we will see the reverse."

Including financial/insurance/real estate and public transportation/hotels/resorts, six of the 12 ad categories monitored by PIB have seen page gains in the first quarter of 2004. Toiletries/cosmetics is the biggest winner, with a 7.9 percent increase over the first three months of 2003. Automotive is not only the biggest percentage loser during that period (down 9.8 percent), but has been passed in total number of pages by apparel/accessories.

In a press release, Magazine Publishers of America executive vice president and chief marketing officer Ellen Oppenheim attempted to explain this slowdown: "A different spending pattern appears to be emerging in 2004 for automotive, given changes in the marketplace, which includes launches scheduled towards the latter part of the year."