Commentary by Scott Donaton

ADDRESSING THE LAGGING FORTUNES OF PRINT ADVERTISING

Media Mix Upheaval Presents Crucial Challenge to Magazine Sales Execs

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Magazine pages rose in May after 10 straight months of declines, but print advertising still lags in the economic recovery. I have a theory on why.
Scott Donaton, editor of 'Advertising Age.'

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Marketers are rethinking everything right now -- everything, that is, except their magazine and newspaper spending. I'm convinced that as they devote time, energy and resources to working through their many challenges, marketers have become complacent about print. They're convinced they know where magazines and newspapers fit in their plans, what portion of their budgets need to be set aside and what print does for their brands.

Frightening indifference
While their views are not necessarily negative, their indifference is actually more frightening. In a just-released study by the Association of National Advertisers, 49% of marketers surveyed said they expect their ad budgets to increase in the next year. But only 44% expect their magazine spending to go up, and a more-worrisome 25% anticipate a bump in newspaper budgets. It's a cyclical business, sure, but those who thought money would blindly grope its way back to the same places it left were clearly wrong.

Somehow, and this is where even I'm going to go fuzzy on the details, magazine and newspaper executives need to wave their arms in front of advertisers and persuade them to give print, and its role, a fresh look.

The re-examination of the broadcast-TV-centric ad model, and the enormous ripple effect it's having on every segment of the marketing and media universe, is the story of 2004. Marketers are strongly questioning the efficiency and effectiveness of broadcast TV, and the effects are clear in this year's upfront. The broadcast-network take is flat to down from last year, with the cost-per-thousand viewers is up in the mid single digits.

Alternative marketing tools
Some dollars shifted to cable, sure, but there's a lot more to the story. After years of talking about media neutrality and zero-based thinking, marketers are actively exploring alternatives, not only to 30-second commercials, but to media advertising in general. Design, word-of-mouth, entertainment, architecture, internal communications -- all have become prominent marketing tools. These new disciplines bring with them steep learning curves, and questions about how to plan for them or measure returns.

I'm convinced that marketers, overwhelmed by all these options and changes, are relieved to think there are some segments of the traditional media marketplace that don't need a rethink. Chief among those is print. The evidence is anecdotal, but it's a theme that's come through in many conversations with media buyers and chief marketing officers. "I'm not re-examining print," they say, "because I don't have to." Changing that attitude, in my view, is publishing's biggest challenge.

The Internet
It's not the only one. Internet advertising is rising sharply, and some of that money is surely coming out of print budgets. Respondents to the ANA study -- 150 or so executives from such companies as AT&T, BMW of North America, Ford Motor Co., Gillette Co., General Motors Corp., Johnson & Johnson, Kraft Foods, Pfizer, Unilever, Wendy's and Visa -- identified the Internet as the biggest threat to the future vitality of newspaper advertising. The Net ranked as the third-biggest threat to magazine advertising, behind audience/circulation declines and ad clutter, which also ranked in the top five for newspapers.

Magazine sales executives (and every one of them you talk to knows this, too) also need to do a better job pitching advertisers on the strength of their medium and spend less time bashing rivals. Cable networks figured this one out a long time ago, and have tallied the rewards.

But my best advice to publishers is simple: Give marketers a reason to take a second look.

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