HEARST'S TWO SISTERS HURT IN 1ST QUARTER;AD PAGE DIVE COULD MARK A BACKLASH AGAINST NEW RATE PLAN

By Published on .

Most Popular
Women's publishing powerhouses Good Housekeeping and Redbook took major first-quarter ad-page hits in what looks like the escalation of an advertiser backlash against parent Hearst Corp.'s risky new rate plan.

The women's service titles lost a combined 143 ad pages in the quarter, according to preliminary estimates obtained by Advertising Age. That represents a drop of more than 20% for each and a disproportionately large chunk of the estimated 200-page decline for the entire Seven Sisters field.

It's also a far cry from recently ousted Hearst Magazines President Claeys Bahrenburg's early predictions that the magazines' ad-page falloff would be in the range of 3% to 5%.

The first-quarter news was an unwelcome greeting for new Hearst Magazines President Cathleen Black, who officially took the helm last week. But she said she is standing by Hearst's rate strategy.

"The Hearst position is that we anticipated falloff. We still believe it is the right decision for our magazine group amd the right decision for the industry long term," she said. "We believe in time we'll rebuild the advertising."

Hearst raised the ad industry's hackles last summer when it unveiled a plan to hike ad rates 5% for 13 of its 15 magazines effective Nov. 1 while reducing their circulation rate bases an average of 10%.

Redbook's ad page tally for the January through March period was down 21.6% from the same quarter last year, to 223 ad pages. The problem was even more acute at Hearst flagship Good Housekeeping, down 23.8% to 259.5 pages. It tumbled to fifth place in the category, from its customary perch among the top three.

The pair's ad-page tailspins are expected to equal an ad revenue loss of about $18.5 million.

"It has to be a reaction to the circulation cutbacks," said former Hearst Publisher Tony Hoyt, now a senior VP at American Media, which includes the National Enquirer and Star. "In January and February, you can claim that nobody had creative ready, but by March you're starting to see a trend."

UNILEVER LEAVING

In addition to Philip Morris Cos., which loudly protested Hearst's move and pulled virtually all Kraft Foods ads and a large portion of its tobacco dollars, Unilever also appears to have taken most of its business elsewhere.

A Hearst insider said the lost business was "from people who were buying eyeballs"-those more interested in price than reader quality.

The margins were so low, he said, "that we'll probably be more profitable without them in '96 than we were in '95 with them."

"BETTER HOMES" GAINS

The Sisters' biggest beneficiary so far appears to Meredith Corp.'s Better Homes & Gardens, which chalked up 366.5 ad pages, a 3.6% gain, and has overtaken a relatively flat Woman's Day to emerge as category leader for the quarter.

"Meredith Magazines and to a lesser extent Family Circle are seeing some benefits from the Hearst decision," said Woman's Day Publisher John Fennell.

In this article: