Magazines keep growing in third quarter

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The second half of 2000 kicked off with strong magazine ad page results -- just released by the Publishers Information Bureau -- continuing a trend of positive growth in most major advertising categories.

Third-quarter figures indicate speedy growth in technology, retail and media, though they also registered a decided slump in the traditional powerhouse categories of automotive, direct response and cigarettes and tobacco.

The Industry Standard remains at the top of the charts for most ad pages thus far in 2000, with 5,790.64 -- a 292.1% gain. Time Inc.'s Fortune lagged with 4,361.45, nosing out Business Week by less than 90 pages. The top page growth occurred with the Standard and with Business 2.0, which moved up to No. 7 with a 288.5% page increase to 2,732.73.

TECHNOLOGY ON FIRE

The technology category remained on fire through the third quarter, with pages up a whopping 67.1% to a cumulative total of 16,805.87. That left the automotive category in second place once again (at 15,754.73 pages, the category is down 10.8%). Direct-response companies also are down 14.8% to 14,924.03 pages, due in part to the move to the Internet as a primary vehicle for direct response; the cigarette, tobacco and accessories category is also down, 12.1% to 3,996.41 pages.

"Ten of the 13 major ad categories are showing growth, though industry losses have come in automotive, cigarettes and tobacco, and direct response," said Nina Link, president-CEO of the Magazine Publishers of America. "The decreases are not something that came as a surprise to us, because automotive in particular has been challenging this year. From the news with Ford Motor Co. and General Motors Corp., we knew that domestic cars were going to be lighter for us this year as well as light trucks. We have, however, seen an increase in Asian cars and light trucks to balance the numbers."

Significant attention has also gone to the Internet in terms of domestic car purchases and advertising, but the MPA expects to see a stronger effort in domestic magazine ads through the fourth quarter, Ms. Link said. Last summer Ford began renegotiating ad deals with magazines it had previously dropped from its schedule (AA, July 24).

As a trend, big tobacco advertising has also steadily decreased over time. "In September, the decrease in tobacco and cigarette ads probably related to issues revolving around cigarette ads in magazines with a teen audience. We could foresee that there would be some pullout with those magazines," Ms. Link said.

PLUSES OUTWEIGH MINUSES

For most publishers, though, the pluses far outweigh the minuses. "We have experienced tremendous growth at Time Inc., particularly in the categories of computers and financial services, which has benefited our magazines quite a bit," said David Long, president of media sales and marketing at Time Inc.

"Fortune [up 49.5%] has primarily benefited from growth in these categories. Computers and technology are really up through the roof, with significant gains in retail and pharmaceuticals as well. Our domestic auto is down slightly, as is tobacco," he added. "But for Time Inc.'s consolidated numbers, this is a very strong environment that we find ourselves in. Most of our magazines, and I guess most publishers as well, are having a pretty good year."

Hearst Magazines also is contributing to the growth trend, and the company optimistically said it sees no end in sight. "We're having a very strong year, especially in the fashion and beauty arena," said Michael Clinton, senior VP at Hearst. "Our obvious blockbuster success is Oprah [with O, the Oprah Magazine], but we're also having a very strong year with books like Marie Claire (up 13.9%), Harper's Bazaar (up 8.6%), Cosmopolitan (up 10.4%) and Redbook (up 17.8%). There's strong double-digit growth pretty much across the board, and we expect it, plus growth in the ad categories, to continue into the fourth quarter, with the exception of less dot-com business."

SEVEN SISTERS

Of the Seven Sisters women's service magazines, Better Homes & Gardens came out on top with 1,395.99 pages, up 1.7%. Woman's Day, Good Housekeeping, Redbook, Ladies' Home Journal, Family Circle and McCall's followed, in that order. The latter two reported ad page losses.

The year to date tally has shown about a 15.9% increase in ad pages over 1999, Ms. Link said. Despite concerns over an upcoming ad slowdown, that rate of ad page growth exceeds that of the first half of the year, up 14.4%.

September closed with apparel/accessories as the No. 1 category -- topping technology, which has been leading for the rest of the year -- thanks to the back-to-school push.

"We're very pleased with the growth in the major categories," Ms. Link said. "It will be an interesting fourth quarter, because it's usually very strong. We expect technology to continue moving forward, but I think there will also be continued growth in the other nine categories, especially with the gift season coming. Another thing to note is that in the close of the third quarter, the advertising dollars were up a half-billion dollars [over the comparable period in 1999]. For the industry, this is very exciting."

Contributing: Jon Fine.

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