• by Larry Dobrow , August 6, 2003

The release of July magazine ad page and revenue data suggests rumors of the medium's rebirth may be greatly exaggerated. While the magazine business continued its slow rebound from the dark days of 2001 and 2002 in terms of ad revenues, ad page growth - which many consider to be a more vital indicator - continue to be erratic.

Yes, the industry has seen sustained monthly revenue growth during each of the past four months, but sputtering ad page volume (from a decline of 3.2% to a rise of 3.1%) casts continued uncertainty over underlying demand for magazine ad space.

Taking a broader view, magazine ad pages have managed to grow 1.6% through the first seven months of the year for the 12 categories monitored by the Publishers Information Bureau. During that same period, ad revenue increased at a sharper rate, with mags hauling in $9.76 billion, an increase of 9.6%. The ad page/revenue balance roughly held for July: pages slumped 0.2% from last year (to 14,696), while revenue surged 7.9% (to $1.17 billion).

For the first seven months of 2003, six of the 12 ad categories monitored by PIB saw page growth over 2002, with automotive (21.4%), drugs and remedies (15.1%) and home furnishings and supplies (10.8%) leading the charge. Buoyed by a spectacular July - an out-of-the-blue 35.6% ad-page spurt, though some of that can be attributed to favorable comparisons with the July 2002 doldrums - retail is now in the black for 2003 (1.7% growth over 2002). Of the six categories that declined in ad pages, financial/insurance/real estate (-13.4%) and public transportation/hotels/resorts (-7.9%) remain the biggest underachievers.

In terms of ad revenue, the results were slightly sunnier. For the year to date, nine of the 12 PIB categories are up, with only financial/insurance/real estate (-10.5%), public transportation/hotels/resorts (-2.2%) and direct response (-1.7%) failing to keep up with last year's pace. Overall ad revenue growth was again fueled by the magazine industry's biggest boosters: automotive (up 25.2%, to $1.20 billion for the year), drugs and remedies (21.3%) and home furnishings and supplies (21.1%).

Magazine Publishers of America executive vice president and chief marketing officer Ellen Oppenheim noted that many of the ad decisions for July issues were made in April, when the country was in the midst of geopolitical upheaval and the SARS scare. "There was a lot of overall uncertainty then and there's still some now," she says. "That's not going to change overnight."

With the exception of retail, the year-to-date trends mostly held in July. In terms of ad pages, six categories rose and six shrunk. The best performers were retail, toiletries and cosmetics (23.8%) and accessories (22.0%), while the laggards were financial/insurance/real estate (-28.8%) and public transportation/hotels/resorts (-21.4%). Revenue-wise, seven of 12 categories showed growth in July, with accessories (a surprising 43.5% jump) and retail (25.1%) performing best; all seven of those categories experienced double-digit growth over July 2002.

As for individual titles, the most impressive gains for the year to date have been registered by Lucky (72.3% increase in ad pages, to 754, and 129.6% surge in ad revenue, to $39.9 million), Guideposts (92.3%/197, 103.7%/$13.6 million) and Real Simple (62.4%/562, 120.6%/$46.5 million). Both Blender (124.5% ad pages/181.8% ad revenue) and Elle Girl (93.1%/139.5%) showed tremendous growth, but much of that can be attributed to frequency increases in 2003.

Among the mags that continue to struggle are Movieline's Hollywood Life (down 67% in pages and 68% in revenue) and Soap Opera Digest (23.9%, 59.4%). The former seems to be encountering a few bumps in its shift from celluloid to chic-lifestyle title (not to mention skipping an issue or two), while the latter may be feeling the overall decreased interest in soap operas as well as heightened competition from online publications covering the same turf.

And adding to here ongoing legal and business woes, Martha Stewart's namesake magazine is finding it difficult to make a living. The title experienced a 42.2% decline in ad pages and a 39.9% drop in ad revenues in its July issue. That's even worse than Martha Stewart Living's year-to-date declines of -30.6% and -26.8%, respectively.

As for the months ahead, Oppenheim is understandably hesitant to make big-picture predictions. "There's so much uncertainty in the world today, so much financial pressure from Wall Street," she says. "If we use both the current stock market and the recovery from the recession in the early '90s as a guide, I'm guessing we'll continue to see volatility from month to month."