Business book upstarts barge in

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Four business magazines with an Internet focus broke into the Ad Age 300 for the first time, their presence a testimony to the influence wielded by the Internet.

These magazines -- Business 2.0, Industry Standard, The Red Herring and Upside -- in part are beneficiaries of a shift in corporate buying power among readers. "People used to look to [information-technology] departments to make the buying decisions on hardware and technical services, says John Chalon, VP-associate publisher of Industry Standard, published by International Data Group. "But technology is now so pervasive that senior-level execs outside IT departments are now broadly involved [in these decisions]. Their readership is horizontal, not vertical."

This implies that advertisers could be spurning computer magazines -- the media of choice of IT departments -- to deliver their message to corporate suites via consumer and business publications.

As an ad category, technology ranked second in total advertising among consumer magazines in 1999, growing 13.7%, according to Publishers Information Bureau. Adscope, which monitors technology ads across all print media, found only one computer magazine in its top 10 advancing in ad pages in 1999.


The emerging group of Internet-related publications typically offers circulation that outpaces their rate base, frequency changes within months of start-up, spinoffs and foreign editions.

Industry Standard's rise has been meteoric. The April 1998 start-up grew from 579 ad pages that year to 3,122 in 1999; total gross revenue rose from $6.6 million to $48.2 million.

In the first quarter, Standard ad pages were 450% above the same 1999 quarter levels, and the publication could collect more than 6,000 ad pages this year, says Mr. Chalon. Part of that growth will come from four monthly newsstand-distributed special reports to be launched in September, called Industry Standard Grok.

Also, the magazine will launch a pan-European version in English this fall; there already is an Australian licensee.


Circulation is 46,000 paid and 90,000 non-paid on a rate base of 150,000 in 1999, Mr. Chalon says. It will grow to 110,000 paid on a rate base of 200,000 in September, he adds. He notes the company Web site generates 4,000 to 6,000 new paid subscriptions a month.

Red Herring, published by Red Herring Communications, claims yearend circulation of 138,824; but now, the publication has soared to around 305,000 on a rate base of 250,000 that will begin in July, says Publisher Ted Gramkow. "By design, we're delivering a 20% bonus to our advertisers, " he says.

The publication currently delivers 100,000 copies to newsstands and sells 45,000, considered a strong ratio in the industry. That 45,000 is twice the yearend single-copy sales. Blow-ins, the Internet and direct mail are key vehicles in the circulation push, he says.


A beefed-up ad force -- new offices in Boston and Los Angeles plus 18 independent ad reps signed in international markets the last six months -- have given Red Herring greater penetration in the ad market. Ad pages grew 31% in 1999 and ad revenue, 128.8%, as ad rates rose 70%.

Business 2.0, published monthly by Imagine Media, a unit of Future Publishing, went to every-other-week publication this month. Relaunched in August 1998 as successor to The Net, Business 2.0 collected $15.5 million in ad dollars in 1999 versus $3 million in 1998. In the first quarter, ad pages of 610 were up 402% over the corresponding period in 1999, says David Fine, director of national sales.

Circulation has stimulated ad growth. Advertisers are attracted to the reader profile: a 38.5-year-old, senior-level executive, he says. The rate base continues to trail paid circulation (209,302 the end of 1999) -- "we overdeliver on all audited statements," says Mr. Fine. The current base of 210,000 moves to 300,000 in August.

Business 2.0 launches in the U.K. this month and in France, Germany and Italy in the fall. A lifestyle spinoff polybagged with the magazine will hit the U.S. in October.

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