How to Cut Back Just as Marketers Start Asking for More

A New Dilemma for Magazine Companies

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NEW YORK ( -- Before the recession descended over everything, magazine companies had been making pretty good progress toward becoming full marketing partners for their advertisers. Publishers were buying digital agencies, handling creative duties and lining up programs across a range of properties.

Advertisers aren't likely to commit to a sixth annual 'Fashion Rocks' next September.
Advertisers aren't likely to commit to a sixth annual 'Fashion Rocks' next September.
As marketers pull back on ad spending, though, a funny dynamic is emerging: They're more likely than ever to concentrate their resources with magazine companies whose services and assets can help make up for the marketers' retreat.

Single point of contact
Getting a single, central point of contact at a media company has become more important to advertisers and agencies in the past year, for example, according to new research by Advertiser Perceptions. And the notion that media companies ought to play marketing partner surged up the list of priorities, to sixth place now from 10th just one year ago.

The recession looks like a contributing factor. "As the economy forces companies to lay people off, those companies look to others for resources," said Ken Pearl, CEO at Advertiser Perceptions, which surveyed 1,606 marketer and agency executives in October and November, after the economic crisis had bared its back teeth. "Leaning on a media company as a partner makes a whole lot of sense, especially in the economy we're in now."

The trick for media companies making their own budget cuts, then, will be protecting enough of their integrated marketing capabilities to stay in the game. They've already started prioritizing and making tough decisions. Witness Rodale's dissolution of Rodale Marketing Solutions and Conde Nast's decision to put "Fashion Rocks" on ice. When Meredith cut about a dozen salespeople last month, it eliminated Jack Bamberger's job -- just six months after it named him chief innovation officer at its unit for integrated programs.

Publishers have become cognizant of the threat -- and its converse opportunity. Leslie Picard, president-corporate sales and marketing at Time Inc., said integrated programs should have a bigger role for marketers during times like this. "As advertising budgets get smaller, they're looking for one media company to develop a customized marketing solution for them," she said.

Less interest in splashy programs
That often will mean less interest in publishers' big, splashy programs designed to incorporate multiple sponsors. It's true that marketers from Lexus to Grey Goose are still backing the 27th annual Food & Wine Classic in Aspen next summer. But advertisers didn't look likely to commit to a sixth annual "Fashion Rocks" next September. "When you're relying on large chunks of money to come from advertisers in a contracting advertising budget environment, there is a lot of risk involved," said Richard Beckman, president of the Conde Nast Media Group.

The group's revenue this year will show a 4% or 5% decline from last year, Mr. Beckman said, after seven years of double-digit revenue growth. So he has redeployed a lot of his resources instead toward integrated marketing propositions tailored for a single advertiser. "We will see significant growth in that class of our business, for all the right reasons," he said. "It's measurable, it's integrated, they're programs that create noise and buzz beyond the investment level." He added, "It's the right type of marketing for this economy."

Reader's Digest Association is running a campaign for General Mills on behalf of Chex cereal and party-mix recipe on
Reader's Digest Association is running a campaign for General Mills on behalf of Chex cereal and party-mix recipe on
Reader's Digest Association is running that sort of campaign for General Mills on behalf of Chex cereal and party-mix recipe, using the Every Day With Rachael Ray and Taste of Home magazines but also, marketing in grocery stores and even the Taste of Home cooking schools.

"That's where you're finding the nucleus of the energy right now in the market," said Suzanne Grimes, the former Conde Nast Media Group veteran who joined Reader's Digest Association as president for food and entertaining in May 2007. She built an integrated sales team from scratch that summer.

"I was just in Minneapolis at General Mills," she added. "They were very demanding in the best possible way. They were very smart about what their mission was for their brand. They were the first partner to take advantage of absolutely every asset we have."

Still bringing in multiple advertisers
Reader's Digest Association is still running some programs designed to bring in multiple advertisers. Gallo Family Vineyards wanted to focus on deeper partnerships with fewer media partners -- but wound up working with Taste of Home magazine specifically because of its cooking schools, whose sponsors also include McCormack seasonings, Birds Eye Foods and, as mentioned, Chex.

"We really want to concentrate on a few properties where we can go ahead and make the most of that property," said Stephanie Gallo, VP-marketing at Gallo. "We just believe at Taste of Home there's so much upside potential. They have the cooking schools. They have the magazines. They have specialty cookbooks, and they come out with customized issues for every single holiday."

Over at Hearst, seven of its titles' December issues will run ads for Sears as part of a program Hearst assembled with the retailer, said Michael Clinton, chief marketing officer of Hearst Magazines. The effort includes about 65 ad pages and a major digital buy, too. Hearst is also forging ahead with multi-sponsor programs such as 30 Days of Home and 30 Days of Fashion.

Meredith's relatively modest integrated programs are still finding demand said Michael Brownstein, the company's senior VP-corporate sales. "We're not asking for $8 million commitments, which is hard for a client to swallow. You can do it with us for a reasonable out-of-pocket cost."

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