AMC SEES MAGAZINE BUSINESS REBOUND

But Accelerating Ad Shift to Non-Traditional Media Causes Concern

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NEW YORK (AdAge.com) -- Publishers gathering this week for the American Magazine Conference can for the first time this century discuss a medium on the rebound, as this fourth quarter looks more solid than last year's.
Magazine publishers are gathered at the Boca Raton Resort & Club this week.
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A spate of newly announced titles, both from major companies and from independent players, break a long dry spell for launches. Among the newest entrants: Resurrected independent players Red Herring and Radar, the latter of which won backing from New York Daily News owner Mort Zuckerman and financier Jeffrey Epstein, and the announcement of at least one more independent launch is expected imminently.

Surprising unease
But there's a surprising unease. Executives at monthlies sound slightly happier than those of biweeklies and weeklies, whose fourth quarters have yet to close and from whose titles chary marketers can still pull ads. Concerns about momentum into the first quarter are widespread, and a longing for a silver bullet of sorts lies just below the surface.

"What we need is a boom category in magazines," says Rob Gregory, group publisher of Dennis Publishing's Maxim. "Like dot-com was, or men's fashion was 10 years ago. ... Instead we have these categories continuing to wither, like liquor and tobacco." Hopes that gaming would be the next hot category have gone unfulfilled, with the category being a "disappointment to most publishers," Mr. Gregory said.

"Our December issues closed better than we had thought," said Jack Kliger, president-CEO of Hachette Filipacchi Media U.S. "I don't consider any of this trending [into 2005], it's [because] people have some money to spend and want to use it" this year.

"There was a bit of a rally in the fourth quarter," said Michael Clinton, executive vice president and chief marketing officer for Hearst Magazines. "There is a little more confidence with advertisers." But he and other executives remained very cautious about '05.

Slow first quarter predicted
"Anyone who's saying they have [first-quarter] indicators is just bull-- you," said Kent Brownridge, general manager of Wenner Media. "'We have schedules.' Yeah, right. Schedules -- you believe that? There's no such thing as a schedule anymore."

"The first quarter is going to be very slow again, because the budgets I am seeing are slow to come in," said Robin Steinberg, vice president and director of print at Starcom Media Group's MediaVest, New York. "The fourth quarter will either be flat or up, but anything is better than the past four years."

Beyond just-barely-in-time media planning, a few more wild cards hold potential to substantially affect how 2005 plays out for magazines. One is cost increases from paper and postage, which a number of executives named as a key worry.

Ad shift to non-traditional media
Another involves competition and magazines' overall response to it. "The cloud on the horizon, no bigger than a man's hand right now but still a concern, is the shift into nontraditional media" by advertisers, said Mark Edmiston, managing director of media investment banker AdMedia Partners. "So far it's affected TV more than print," he added, but warned that the shift had accelerated noticeably "very recently -- in the last few months."

Magazine Publishers of America is ramping up an effort to promote magazines as a medium, under the auspices of its Magazine Industry Coalition, in which Hachette's Mr. Kliger oversees an impressive list of industry heavies. A major promotional effort is expected to be detailed at this week's conference. One possible piece of the plan, said an executive, will be for same-category magazines -- like women's service or business titles -- across different companies to approach marketers with joint ad opportunities.

The 'ACE' X-factor
The last X-factor for 2005 and beyond is the net effect of Publicis Groupe's Starcom's "ACE" study, which quantifies reader engagement with magazines. "I think the deck will be reshuffled" owing to what that study ultimately finds, Mr. Brownridge said. "Not less money [for magazines], but that the money will be spent differently," he said.

"The last time we saw that kind of groundswell shift was when [former General Motors Corp. Vice President for Corporate Advertising] Phil Guarascio arrived at GM, and said 'Here are the new rules.' Guess what? Everyone [followed] within nine months."

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