Overall, the magazines audited by PIB recorded an average 10.1% ad page gain for 2000. International Data Group's Industry Standard posted the most ad pages with 7,440.1 pages (up 133.1% from 1999), soundly defeating its closest rival, AOL Time Warner's Fortune by more than 1,100 pages. Further reflecting the delirium of an ad climate that's already being recalled with nostalgia, No. 7 and 8 on the top 10 list were new-economy titles Imagine Media's Business 2.0 (up 183.3%) and Red Herring (up 138.3%).
Huge numbers, to be sure, but some of the tech titles that posted triple-digit gains saw their results turn shaky in November. In that month, the Standard's ad pages fell 11.9% and Red Herring's dropped 5.8%. In December, the Standard's ad pages declined 41%, though both Business 2.0 and Red Herring posted overall ad page gains of 21.7% and 78.6%, respectively, that month. In early January the Standard announced it would lay off about 7% of its work force.
The year ahead looks tougher, to say the least. While "interesting" and "challenging" are publishers' euphemisms of choice, some speak freely about what a slowing economy means for the industry.
TOUGH TIMES LOOM
"At this moment, our first-quarter bookings are up 8% over last year," said William Kupper, president and publisher of Business Week, "but I can't imagine that's going to hold." He expects his magazine to end 2001 "ultimately about 5% to 10%" down from its page levels this year. In 2000, McGraw-Hill's Business Week saw its ad pages shoot up 17% to 5,993.7, earning it fourth place in the PIB annual ad page sweepstakes.
Mr. Kupper expects that "the first half of the year will be a struggle, and the second half of the year will probably be pretty good." The real hard times, he said, now loom just over the horizon: "I think the second quarter will be really tough." Previously, Mr. Kupper told Ad Age that a rate base hike to 950,000 that went into effect Jan. 1 should help the title with ad revenues in '01.
Peter Bauer, publisher of AOL Time Warner's People, saw the year in somewhat brighter terms. "As long as I don't read the paper, I think I can be somewhat optimistic," he said. In '01, People won't have Philip Morris USA's cigarette advertising, which accounted for about $8 million in revenues, Mr. Bauer said-a drop in the bucket for the juggernaut.
But Philip Morris' unilateral decision to pull tobacco advertising from more than 40 magazines with significant youth readership-
including Entertainment Weekly, Rolling Stone and Glamour-did not begin to take effect until the last quarter of 2000. For some titles, that's a more significant loss to deal with in 2001 than it is for People.
The domestic auto category continued to look soft, Mr. Bauer said, but he expected strength in other categories and new initiatives such as planned custom publishing ventures to bolster the bottom line. Still, he said, "our first quarter is getting off to a slow start-we're tracking closer to first quarter '99 in terms of pages." For the first three months of 2000, People's ad pages were down 0.7%-essentially flat. People ended 2000 off 1.9% in ad pages following several years of impressive growth.
Sunday magazine results were slower. Two titles in the four-title category-USA Weekend and Los Angeles Times Magazine-posted ad page drops of 2.7% and 24.3% respectively. The New York Times Magazine and Parade both posted gains, but the category still finished the year down 0.6%
Oddly, automotive provided a bright spot in late-year ad results. Though the category had been down by double-digit percentages through the third quarter, the category ended down just 6.1% for the year and posted a 13.7% ad page increase for December. Still, it's difficult to find a publishing exec upbeat about automotive, particularly domestic manufacturers. Dave Long, Time Inc.'s president of media sales and marketing, said his company's bookings to date for 2001 showed revenue increases in most top categories, including Asian automotive advertising, but that domestic auto was still off.
"I remain optimistic" for 2001, said Mr. Long-a phrase rarely uttered by magazine executives these days.
Despite automotive's sudden turnaround at yearend, for all of 2000 it still trailed the industry's new leading category, computers and software, which in 2000 posted a 51.1% gain to 24,0220.24 pages. Yet the rate of growth in tech, too, is not what it used to be. For December it slowed to 8.5%, hitting single digits for the first time since February.
Thank the dearly departed dot-coms for the slowdown. "It's probably a 350-page [portion of yearly business] we will never see again," reflected Jim Berrien, president of Forbes Magazine Group. His Forbes flagship posted a 20.1% ad page increase for 2000, ending up at 6,083.5 pages.
But like Mr. Kupper, Mr. Berrien indicated he's hardly expecting a rerun of 2000 anytime soon. "What I'm starting to feel is that business isn't getting ordered as far in advance as last year," he said. "If you want to forecast accurately, you're going to have to forecast often."
That's not exactly a prescription for security among magazine publishers, nor are comments made from the other side of the desk. "I'm not hearing doom and gloom so much as I am hearing caution," said Valerie Muller, senior VP-print services at Grey Global Group's MediaCom. Advertisers "are holding onto money on their end" rather than simply committing it to ad buys. "There's a little more wait-and-see than I would like," she added.
QUICKLY SHRINKING BUDGETS
"What has been surprising is how quickly people responded to the softening" of the economy, said Mark Edmiston, managing director of AdMedia Partners. "Ad budgets shrunk much faster than I would have expected."
"Hopefully," Mr. Edmiston added, that sped-up reaction time "will be helpful on the upside when the market improves." He expects a slow first half and a slightly better second half-resulting in a 2001 that's ultimately up over 2000's rip-roaring results, if only slightly.