COMPUTER MAGAZINES FEEL INTERNET SQUEEZE

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The 28 computer magazines in the Ad Age 300 took a hit in 1998. Total gross revenue of the category edged upward only 1.4% to $2.57 billion, against a 10.7% growth in the prior year.

Ad revenue rose 0.4% to $2.22 billion. Higher page rates compensated for a 7.1% drop in ad pages to 76,164. Revenue from circulation gained $348.1 million, up 8.1%.

One of the biggest ad page drops came at Computer Shopper, slipping 30.2% to 6,525 pages. CS continues to struggle in 1999, down 19% in the first quarter even though it has kept its '99 rates even with '98, according to Adscope, a tracking service that monitors high-tech advertising.

CS Publisher Tom Jones believes mergers and acquisitions among advertisers are the major reason his publication and others in the field are down.

Consolidations typically defer marketing plans and reduce ad spending. Likewise, marketing support is down among PC marketers because low PC prices have thinned margins.

There, too, is a shift in advertisers moving to the Web. To that end, editorial moves at CS have included the opening of an eShopper section that identifies the hottest places to buy products on the Web (it has lured eBay, for example, as an advertiser); the creation of special issues such as a college guide that speaks to high school grads about the computer environment on campus; and the creation of an e-commerce Website, computershopper.com, that receives between 9 million and 10 million hits monthly.

"The 150 companies marketing on the Website are doing so because it offers a much lower barrier to entry than print, but as they grow and need to strengthen their brand, they're migrating to print," says Mr. Jones, noting that such synergies will be critical for all computer magazines in future.

DECLINE IN MAIL/PHONE ORDERS

Computer magazines also were belted by a continued decline in mail/phone order advertisers, a category that ranked No. 3 among business/news publications in 1998, according to Sheila Craven, Adscope president.

The ad category plunged 26.89% in ad pages in 1998 from 1997. Then in first quarter '99, it fell another 42%. The category has slipped from the No. 2 supplier of ad pages in 1997 to No. 5 in first-quarter '99. Mail/phone order advertisers are resellers who are increasingly opening virtual store fronts of their own to advertise and market their goods, says Ms. Craven.

"From a more philosophical perspective, this medium has matured; afterall, we're certainly not seeing a reduction in PC sales. The industry's ad cycle is on the downside of a plateau. What looks like a downturn, is really consolidation of advertisers and media, events that usually have a negative impact on ad growth," says Ms. Craven, who notes part of that ad cycle is a market shift into other

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