Publishers Information Bureau: Q4 halts outright disaster for some

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The rate of advertising decline at magazines continues to slow, and executives at key companies say improved fourth quarters are on the way too, in some cases leveling off a dreadful spell to end the year essentially flat with '01.

"We're just about even for the year" in ad pages, thanks to a strong performance in the fourth quarter, said Jack Kliger, president-CEO, Hachette Filipacchi Media U.S.

"After a pretty tough first half," echoed Michael Clinton, exec VP-chief marketing officer, Hearst Magazines, "the fourth quarter gave us a real lift." He said that just over half of Hearst's magazines would post year-over-year ad page increases.

But part of the upcoming good news is owed in part to comparisons to the last quarter of 2001, in which marketers' reluctance to spend in a post-Sept. 11 world decimated results for late '01.

"The fourth quarter last year was real soft," said Mr. Kliger while discussing a hefty double-digit ad page increase at Premiere in the last three months of `02. "Anytime you're up 35% in this economy, it ain't all because you're so great now."

And while the decline eases, the results for the first nine months of the year are still far from pretty. The average magazine of the 233 audited by Publishers Information Bureau posted a 6.6% ad page decline.

Among the 10 magazines that claimed the most ad pages, only one-Transworld Skateboarding, which is published by Time Inc.'s Time4 Media unit-posted an increase at all, and top-five mainstays like Forbes, Conde Nast Publication's Bride's, McGraw Hill's Business Week and Time Inc.'s Fortune remained down double-digits. (Layoffs took place at Forbes and Business Week in the past two weeks.)

tech losers

Among the top 20 titles, only Time Inc.'s Sports Illustrated and Meredith Corp.'s Better Homes & Gardens joined Transworld Skateboarding in posting positive performances. Tech titles, once again, topped the list of losers, with the independent Red Herring posting a stomach-turning 70.2% ad-page drop, and Conde Nast's Wired falling 44.6%.

The year started sluggishly for magazines, and, as with the fourth quarter, those comparisons may make for less tough sledding in early '03.

But executives were notably cautious about projections for '03. Ed Kelly, CEO of American Express Publishing Corp., projects his company's ad pages to be up around 5% next year-with one key caveat: "It's anybody's guess if and when we start dropping bombs."

Steven T. Florio, president-CEO, Conde Nast, said he was budgeting for the economy in '03 to be "relatively flat to up a little bit." But, he added, "it's almost as though we have one budget without a war and one with. ... If we do [have a war with Iraq] we're going to have a hell of a problem. Travel stops dead in its tracks."

The travel category, Mr. Florio said, is crucial for three Conde Nast titles: Gourmet, The New Yorker and, of course, Conde Nast Traveler.

Even without a war, though, optimism for the overall economy in '03 is hard to come by.

Mr. Clinton said "The Christmas season will give us a real barometer, once we see how retail is." However, he made it clear his expectations were decidedly modest.

"First quarter and '03 will be more of the same. It will continue to be a tough climate," Mr. Clinton said.

Next year "is still going to be a challenging year," said Mary Berner, president-CEO, Fairchild Publications. "The economy hasn't rebounded yet."

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