• by Larry Dobrow , October 9, 2003

As they joust with advertisers over next year's ad rates, magazine publishers have been speaking louder and more confidently about a recovery that many claim is well underway. But if the demand for magazine pages has truly increased, it isn't evident in data released Thursday by the Publishers Information Bureau (PIB).

September ad pages dipped 4.5% from September 2002 levels, marking the fourth consecutive month of page declines, according to the estimates. While ad page volume still is up 0.3% on a year-to-date basis, the hoped-for second-half rebound has yet to materialize, as evinced by the September results and August's 2.9% drop. Ad revenues, which are calculated by the PIB on an open rate card basis, have grown 9.0% in 2003, but you'd be hard-pressed to find many people within the magazine business who view those numbers as anything but a disappointment.

"It's very discouraging," says Rebecca McPheters, president of magazine consultancy McPheters and Co. "There's no positive way to spin it. I think magazines may be paying the price for advertisers' unbridled enthusiasm during the [network TV] upfronts."

George Janson, senior partner/director of print at Mediaedge:cia, however cautioned that one shouldn't read too much into any one month's results and that magazines are best evaluated less as an industry-wide phenomenon than on a title-by-title basis. Even so, he notes that anybody predicting a fourth- quarter rebound "is being overly optimistic. Even next year, the business will probably be either flat or we'll see nominal growth."

On the other hand, media marketing consultant and former MediaCom print media chief Valerie Muller isn't sure whether the PIB numbers are indicative of a prolonged slump. "It may be that there's a desire to curtail commoditization, to stop buying eyeballs at a cheaper price," she explains. "It could be that advertisers and publishers are looking for smart long-term solutions, and not just reinventing the wheel every month."

Similarly, Magazine Publishers of American executive vice president and chief marketing officer Ellen Oppenheim framed the PIB results in more of a big- picture context. "The magazine business is part of a much larger ad business and a much larger economy," she explains. "You have to look at what [the PIB numbers are] saying about those pieces as well. Also, we're the first medium to report [September ad data]." She also suggested that the month-by-month ad page and revenue figures are hurt by comparisons to 2002: "We had a very strong second-half last year, and that's what we're benchmarking against."

Of the 12 ad categories monitored by PIB, only four saw ad page gains in September over the year-ago period: automotive (up 12.6%), toiletries/cosmetics (10.1%), drugs/remedies (8.5%) and apparel/accessories (0.3%). Led by automotive's 23.8% jump, these same four categories increased their spending in magazines during the month, as did media/advertising (up 10.5%), home furnishings/supplies, food/food products and retail.

For the first nine months of 2003, automotive remains the magazine industry's bright spot, with the most overall ad pages (16,613.4) and biggest percentage increases in ad pages (19.6%) as well as ad revenue (24.7%, to $1.54 billion). The four other categories that have grown their ad pages in magazines are drugs/remedies (13.7%), toiletries/cosmetics (8.8%), home furnishings/supplies (7.5%) and apparel/accessories (1.9%). Magazines generated more revenue in 2003 against the year-ago period in these five categories, along with food/food products, media/advertising, technology and retail. Predictably, the double losers in 2003 have been direct response (down 7.7% in pages and 4.6% in revenue), financial/insurance/real estate (- 15.4% and -13.0%) and public transportation/hotels/resorts (-10.1% and -3.8%).

Media pundits were split on whether "the economy" is a convenient blanket answer to any question about the magazine industry's struggles. "Financial companies are sorting things out, which is affecting the business books," Janson notes. "The tourism troubles are hurting luxury books." But McPheters counters, "Part of it is the economy, but I don't see TV spending curtailed as a result of the economy."

As for individual titles, the usual suspects continue to lead the year-to- date standings. Bolstered by frequency increases in 2003, Elle Girl (up 103% in ad pages and 150% in ad revenue) and Blender (63% and 104%) posted large increases over the first nine months of 2002. Other top performers in terms of percentage gains included Guideposts (77% jump in ad pages, 91% in revenue), Lucky (61% and 121%) and Real Simple (56% and 112%).

Overall, People leads the magazine pack with 2,669 ad pages in 2003 - no surprise given its weekly frequency - and revenue ($535.0 million). In pages, the top five was rounded out by Bridal Guide (2,585), Bride's (2,501), In Style (2,192) and Vogue (2,125). In revenue, the other leaders were Better Homes & Gardens ($474.1 million), Sports Illustrated ($459.0 million), Time ($408.3 million) and Good Housekeeping ($290.1 million).