When you talk to media planners and buyers about magazines, it's hard not to notice how much affection they have reserved for them. In a fragmented landscape, magazines often represent the best of what media has to offer. But if television gets a lot of the attention and a chunk of the media spend, then magazines continue to do what they've always done - connect with readers, one man and woman at a time.
"They are, in some ways, the original passionate medium," said Karen Jacobs, executive vice president and media director for Publicis Groupe's Starcom MediaVest Group in Chicago. "The very nature of the medium is that it's one magazine speaking with one voice, speaking to one reader. I think that makes magazines very special in this media environment. A reader curls up with a magazine in a way that can't be done with a computer or even a TV."
"The beauty of magazines is the emotion and passion that someone can pour into reading magazines. It's an active medium," said Steve Moynihan, managing director of Havas' MPGArnold in Boston. "For our clients, the appeal of magazines is tapping into, trying to borrow from the reader, that passion for a particular magazine, and transfer it over to the brand."
Yet the magazine industry has been battered by short- and long-term challenges that it will have to face to survive and thrive. A two-year slump caused the magazine industry to bleed more than just ink; some titles didn't make it out alive. Others saw ad pages and revenues decline. Some categories' newsstand sales are slumping. Additionally, longer-term issues have to be faced, including questions about rate bases, how to deal with an advertising community that loves to be on TV, how publishers can and should offer more value, and how to grow as a mature medium in a digital age.
The situation isn't all gloomy. For all the categories that have limped into what the pundits call a recovery, there are others who haven't missed a beat. Men's, Entertainment, and Parenting are among the successful magazine categories, with Lucky, Vogue, Architectural Digest, ESPN: The Magazine, and Runners World all having good years.
"There's a whole picture, but the whole picture is painted more clearly by its parts," said Ellen Oppenheim, executive vice president and chief marketing officer at the Magazine Publishers of America. "Overall, the parts, when you start to understand them, make the picture more meaningful." While some advertiser categories like technology have been hard hit, others like automotive remain strong.
"It's not even so much that the economy is so bad - the uncertainty in and of itself is a problem for magazines," said Jacobs. "Committing your money to the magazine medium, and working well in advance, clients are really just having a tough time making decisions and commitments that way."
Television has been a thorn in the magazine industry's side since TV gained traction in the late 1940s and early 1950s. But this year's $9.3 billion upfront has continued to highlight the differences, and creates fear that TV will make even more gains over magazines. In a down economy, advertisers look to move product first, and want the medium they believe will bring them immediate returns. Television is where they go.
"TV is being used right now, as a medium, to be a jack of all trades," said Eric Blankfein, vice president and director of media planning at Horizon Media in New York. "Magazines still have a role. I just think their role has changed when it comes to advertisers' commitment to reach. Magazines aren't necessarily replacing what a TV unit is delivering right now. A lot of advertisers are looking at it from a dollar standpoint. It's more of an uphill battle for publications because of that. You hate to use the pretty down and dirty phrase of 'bang for the buck,' but you've got to look at it like that. It's really how your dollar is going to work the hardest."
Back as far as anyone could remember, publishers ruled the roost when it came to CPM increases. The rate cards were set by September, always with an increase. Buyers and their clients accepted the cost of doing business, and they got the prestige and the chance to connect with a readership in as personal a way as you could get, without literally going right up and shaking their hands.
Ten or 15 years ago, that all changed. Women's service magazines decided to go off the rate card, and it created a tidal wave of deals and negotiations that continue to this day. The only one which remains stuck to the rate card is Conde Nast, although buyers say that while they don't negotiate off the rate card, they're willing to add value in other ways. For the other segments of the industry, a recent MediaPost survey of buyers found that many magazines offer discounts off the published rate card.
It's a buyers' market, to be sure, but not only is there more competition for ad dollars, but there's competition on the newsstand as well, thanks to an explosion of titles and categories throughout the 1990s. More important, changes at the distribution level made it more difficult to find shelf space at the prime newsstand and checkout counter spots.
"It's vicious competition on the newsstand. There are more titles, and they're being more aggressive," said Peter Gardiner, chief media officer at Deutsch. "There used to be eight to ten magazines that dominated newsstands. But now, at newsstands or the supermarket, it's a much different place. Magazines are fighting harder."
With the competition on the newsstand and a battle to add subscribers comes an increased scrutiny among agencies and advertisers over the quality of readers. Advertisers don't care so much about the number of readers a magazine has, only the ones who are committed enough to the magazine and the brands that advertise.
"It's no longer about hitting the number and delivering the eyeballs, but rather, it's about delivering a quality of audience," Jacobs said. "It's not just quantity. It's quality also."
The MPA's Ellen Oppenheim said the circulation numbers don't really describe whose reading the magazines or even how they're reading them. There are matters of advertising exposure, the connection between magazine and reader, and the multiple readers that don't go into the standard metrics, but still have to be taken into account. Some titles, like Reader's Digest and The Atlantic Monthly, have cut their rate bases beginning with the January 2004 issues. The Atlantic Monthly, for instance, will reduce its rate base from 450,000 to 325,000. Publisher Elizabeth Baker Keffer said it's a way to highlight committed readers - the kind advertisers crave and who magazines are good at delivering. "There's a lot of interest in the quality of circulation, whether the last five, ten, or 15 percent is as strong as the first five, ten, or 15 percent," Keffer said.
"Bigger is not always better, and a lot of advertisers are realizing that," said magazine consultant Lou Ann Sabatier. "It's good business sense."
"It's just as important for a publisher to come into my office and take me through their audience and their circulation, as it is for them to take me through the editorial," said Jacobs. "Because I'm buying both, and if I had to pick one, I'm buying the audience."
The idea of finding out the number of truly committed magazine subscribers appeals to planners and buyers, who suggest it might lead to a premium in the future - if the rate base cuts and other moves, like raising the subscription rates, work.
"I'm willing to pay more money for a consumer who is willing to pay more money," said MPGArnold's Moynihan.
While some in the media industry see blood in the water, consultant and former agency person Valerie Muller said it's not the case for either The Atlantic or Reader's Digest. "Whenever rate bases are being manipulated, you have to look first 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 identifying, in very specific terms, who their core is," Muller said. "I think it's a positive move."
While magazines can't compete with TV's advantages of sight, sound, and motion, the industry is beginning to find ways to focus on magazines' strengths. Advertorials, that netherworld between editorial content and advertisements, are starting to get more attention. Many magazines do them, but, as everyone in the industry points out, few do them well.
Advertisers are looking for ways to attach their brand to the very nature of the magazine. Particularly in a down economy in which they have to scratch for every dollar of ad budgets, publishers are enthusiastically creating packages that go beyond traditional ad pages.
"Increasingly, what marketers are trying to do is to get access or presence of content sponsorship that they believe will enhance their message, and make this message more salient with their consumer," said Bill Tucker, executive vice president, managing director of the Kraft account at Publicis' MediaVest USA in New York. "I think what magazines are more willing to do than they have in the past is to help facilitate it."
But magazines still stick to the "church vs. state" credo, which was strengthened by rules set forth by the American Society of Magazine Editors a few years ago. No one's saying that should change. Indeed, Joe Caponigro, media director at WestWayne in Atlanta, thinks most advertorials come across as weak and forced vanilla.
"I don't think publishers like them, either. They'll use them to jack up their page counts, but they take away from the beauty of the book. They also take away from the editorial integrity of the book, unless they're done really, really well," Caponigro said.
It comes down to what magazines are giving and what advertisers are getting. A good advertorial needs to be organic and mean something to readers, while not crossing the editorial line. "Most readers see them for what they are, that they're an advertisement," said MPGArnold's Moynihan. "I would get concerned with too much of a mixing [of editorial and advertising content], because it would really start to lose credibility with readers."
It's clear that advertisers aren't going for the familiar argument among print media that by buying ads, they're associating with editorial content that readers crave.
"Advertisers aren't buying association and never have. They've pretended to buy association on the presumption that what they're really getting is engagement," Jacobs said. "At the end of the day, I don't really care so much that a reader loves your editorial [content] as I do that their love or attention is somehow getting transferred to my ad."
Buyers and planners see the need for more innovation, which they say will help magazines compete with TV and the Internet. A feature like product placement is helping to invigorate TV, and give it a weapon against commercial-skipping technology. "When you look at magazines, you wonder what's going on here," Jacobs asks. "I have to imagine that there's more innovation that we haven't seen yet that's available in that space, without killing the editorial integrity."
Some titles are now finding this out. Common are the extensions of the brand made possible by the Web. But that's not all. Think multimedia, advises Deutsch's Gardiner. You can accomplish this by extending your brand, branching out not only to the most natural extension, the Internet, but to television, radio, and beyond.
"Consumers are interested in relating to their media brands across platforms," said Beth Fidoten, senior vice president and managing director of Initiative Print & Convergence. "If you can connect with your media consumer in a strong way, you might be able to do that across more than one platform."
Gardiner said smart publishers are already realizing it's all about a brand in a multimedia approach. That works for Maxim and Stuff, both branching out to TV specials. It works for Business Week and Fortune, which have their own weekly TV shows, and The Economist, which partners with CNN's Lou Dobbs Tonight for occasional features. Oprah Winfrey and Rosie O'Donnell went the other way, creating successful TV shows that migrated to print. And as Gardiner points out, ESPN is the master of making its brand succeed in every space, including TV, Internet, radio, a magazine, even a restaurant chain. "As consumers are voting with the way they consume media, I think you're seeing the media companies react to that in a multimedia way," Gardiner said.
And in that way, and others, media execs see a place for the magazine in the future. No one's calling for the death of any print media, but particularly not magazines. MediaVest's Tucker sees cross-platforming as a bigger issue than putting magazines together with other media. "As you look to drive 360 degrees of consumer communications, which is what we're really talking about here, you're going to need magazines as a critical source of information, entertainment value, and providing people with their passions," Tucker said. "But they can't function in a vacuum. They need to be aligned with other communication touchpoints."
Horizon's Blankfein sees an opportunity in research, with magazines being able to work with planning agencies and syndicated research to peel layers back and look at audiences in a way that television really can't do.
"That's where print really has an opportunity, because it has so much information to mine as a community - and divulge what its unique qualities are to buyers, planners, and clients," Blankfein said. "There's so much there, and so many syndicated resources to shed light on audiences, segmentation, and product usage. That is something that is invaluable from a planning standpoint."
Some of television's weaknesses can be exploited as well. "Now you can use magazines as a reach medium, with broadcast [TV] splintered," said Initiative's Beth Fidoten. "If you get into the TV Guides, the Reader's Digests, and the women's services books, you can use them as a mass vehicle, as they used to be in the old days, for packaged goods. At the same time, you can use them on the other end of the spectrum, as a niche vehicle."
The MPA's Oppenheim said she thinks conditions will continue to improve for magazines. "I believe that now, there is a start toward a better understanding of magazines' strengths, and a better articulation throughout the industry of those strengths in a way that is starting to take hold," Oppenheim said. "There will be changes in readership and advertising pressures, but as we continue to see the need to connect with consumers, the strength of magazines will be more and more appreciated."
Tucker doesn't think anyone sees magazines as secondary to television, even though it sometimes seems that way.
"I see a very healthy, vibrant area. I see more custom publishing, more advertorials, and the multicultural market heating up. I see magazines continuing to invest in their editorial product," Tucker said. "To compare it to TV really oversimplifies things as an inferior or poor sister to television. I think the television marketplace gets so much attention through the upfront and the dynamics, and that the magazines look to that so much in trying to be a benchmark for their business and their business models, but I don't think marketers look at it that way."