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AD AGE SPECIAL REPORT;MAGAZINES;CHILLING OUT;DIRECT RESPONSE, AUTOS AND LIQUOR SEND A SHUDDER

By Published on .

Cars, direct-response products and liquor. They're critical to magazines, yet these categories are down in magazine ad pages. Budget cuts are to blame, but other trends are gnawing at these categories as well.

DIRECT RESPONSE

Postal increases, paper prices and a decline in discretionary spending are pummeling direct response ad pages.

"At the first sign of problems, the easiest thing to whack out is the ad budget. Third-class mail hit a peak in 1995, and in 1996 it's now declining for the first time in 25 years, about one-half of 1%," says Ed Burnett, president of the list division and direct marketing consultant for Database America. "And if the volume in direct mail is declining, it stands to reason the people who are serving it are having difficulty keeping up with where they were in the past in terms of advertising."

AUTOMOBILES

One of the magazine industry's most important categories hit the brakes this year.

Automobile ad pages dropped 5.2% in the first eight months of 1996, according to PIB. Industry sources attribute the drop primarily to budget cuts by the automakers.

"I would suspect that in pre-budget cut situations, magazines played a much larger role. Many auto manufacturers start out with a full range of media elements-TV, print, outdoor. When budget cuts happen, sometimes magazines are the first to take the cut," says Tom Patty, president-worldwide Nissan account director at TBWA Chiat/Day, Venice, Calif.

Nissan itself is in the throes of a branding campaign that relies heavily on TV advertising at the expense of magazines.

"If you want to change opinions quickly, any media person will tell you the quickest way to effect consumers is with television," Mr. Patty says. "It's immediate. Magazines work wonders, but it's a slower process."

The Olympics also diverted ad dollars from magazines to TV.

"All budgets are finite, even if they are big. It's a zero-sum game. If you put a dollar someplace, you can't put it somewhere else," says Mr. Patty.

A decline in multiple-page units from automakers also may have contributed to the overall ad-page drop, says Ian Beavis, group account director for Toyota at Saatchi & Saatchi Pacific, Torrance, Calif.

"Perhaps in 1995 there were more launches that used multi-page units, which are tremendously expensive," he says.

Ad pages from Asian automakers have been especially low so far this year. PIB reports ad pages from that sub-category were down 29.6% in the first eight months of the year. Mr. Beavis could not account for that shift, but he did say Toyota's magazine budget was down this year.

"We had significant launches and went to a more broader base of magazines in 1996, such as TV Guide and Reader's Digest, rather than a multitude of niche publications. Our activity is driven by what we are launching."

LIQUOR

When sales are down, ad dollars are too. And that has affected liquor ads. "There are fewer people drinking, and the people who do drink drink less," says Renetta McCann, senior-VP media director at Leo Burnett USA, Chicago, agency for United Distillers' Dewar's. "The category has had a difficult time attracting new drinkers."

This category's problems aren't easily solved by new ad campaigns luring consumers to buy liquor. That's because the decline in drinking hard liquor is attributed to social and health trends.

Variety also is slicing into the liquor industry, Ms. McCann says. From sparkling water to microbrewed beers to trendy fruit drinks, consumers have more drinking options than ever before.

But Ms. McCann points out that ad spending in the liquor industry is small by comparison to other categories, so changes in spending are acutely noticed.

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