|JACK KLIGER: "It's everyone, with economic anxiety, high gas prices, the housing market impacting the ad market."|
|GINA SANDERS: "Our fourth quarter was up 17% in ad pages. It's my hope that that momentum is going to carry forth into the first quarter."|
|HUGH WILEY: "Fortune is covering the business of luxury, and I think that we will try to capture some more lifestyle advertisers."|
In fact, many are just hoping to match this year's relatively static performance. "Do I think next year will be robust?" said one industry leader last week. "No. I'm looking at flat."
From the Olympics to gas prices, from Sears to Detroit, a host of factors are shaping up to make 2008 a challenge above and beyond the continuing evolution of the media ecosystem.
"No one has a crystal ball, especially with the economy so bumpy," said another publisher. "The luxe stuff seems like it's going to be okay, but some of the airlines are groaning a bit about $100 million barrels of oil. Financial is going to be soft at least until they get some visibility on everything.
Wouldn't bank on it
"One of the big banks just suspended all advertising for the foreseeable future. Everyone's awaiting Ford and Chrysler; they have new CMOs who have big ideas and are very marketing-savvy, but they have companies that are in a funky space. I don't have a good sense overall there."
If you're in the market for good news, keep an eye on venues for luxury advertising. "We're seeing our bookings coming in earlier than the same time last year," said Gina Sanders, VP-publisher, Teen Vogue. "There are no huge storm clouds we see. And at this point last year we were already aware of some non-returning business. No such issues seem to be on the horizon."
"Our fourth quarter was up 17% in ad pages," Ms. Sanders added. "It's my hope that that momentum is going to carry forth into the first quarter."
But Teen Vogue lives off advertising for fashion and accessories, often from high-end marketers such as Marc Jacobs, Louis Vuitton and Gucci. A downturn in the economy, the prospect of which is already spooking many advertisers, wouldn't hit the luxe business the way it would hurt middle-tier brands.
Worry over a downturn deepened last week, when the Conference Board said its consumer-confidence index, which has fallen since last summer, "plummeted" in November.
"Consumers' apprehension about the short-term outlook is being fueled by volatility in financial markets, rising prices at the pump and the likelihood of larger home heating bills this winter," said Lynn Franco, director of the Conference Board Consumer Research Center. "In fact, consumers' inflation expectations have surpassed the spike experienced this spring, and a larger percentage than last month expect stock prices to decline."
January to September 2007 ad-page results
DRUGS AND REMEDIES: Up 5.9%
PUBLIC TRANSPORTATION, HOTELS AND RESORTS:
APPAREL AND ACCESSORIES:
FINANCIAL, INSURANCE AND REAL ESTATE:
HOME FURNISHINGS AND SUPPLIES:
Source: Publishers Information Bureau
2008 predictions from insiders
DRUGS AND REMEDIES:
Flat at best
Falling even faster
FINANCIAL, INSURANCE AND REAL ESTATE:
Down, down, down
Source: Publishers' projections
A publisher at a major monthly cited that report in labeling next year a worry. "I hear anxiety," the executive said. "I do think clients are concerned. I'm seeing it from a couple sectors. Not surprisingly I'm continuing to hear it from Detroit -- I don't see that turning around anytime soon."
Eggs in less baskets
The increasing concentration among prestige retailers isn't inspiring beauty, fragrance and fashion advertisers either, the publisher added. "If Macy's doesn't do well, they're not going to do so well. The Neiman's customer may not be touched, but the Macy's, Wal-Mart, Sears, JC Penney customers are all touched."
As if to prove that point, shares of Sears sank Nov. 29 after the company said profit fell 99% in the third quarter, largely on declines at its 3,800 Sears and Kmart stores. It said it doesn't expect any notable improvement in the near future.
But this is a portrait of disquiet, not despair. And a lot depends on which foxhole a publisher's looking out from. "We've got a good shot at having a good year next year," said Hugh C. Wiley, publisher of Fortune.
Part of that's relative; Fortune ran 16.2% fewer ad pages through its Oct. 15 issue than in the same period last year, according to Media Industry Newsletter. Fortune has a new design, a new website and a relatively new group president in Vivek Shah heading into next year.
'New age of affluence'
Mr. Wiley also said the trouble with technology and automotive advertising can be increasingly offset by that familiar bright spot: luxury. "There is a new age of affluence out there," he said, citing recent account wins such as Four Seasons and Cathay Pacific Airways. "Fortune is covering the business of luxury, and I think that we will try to capture some more lifestyle advertisers."
It's not just magazines facing a bumpy year, said Jack Kliger, president-CEO, Hachette Filipacchi Media U.S. "It's everyone, with economic anxiety, high gas prices, and the housing market impacting the ad market," he said.
"But," he added, "the combination of the Olympics and a presidential election, both of which benefit TV far more than magazines, doesn't help."