Optimistic magazines seek hefty rate gains

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With costs rising and ad pages still flowing, magazine publishers are getting aggressive in seeking rate increases for next year.

Leading publishers are setting rate hikes between 3% and 9% for 2001, with most magazines clustered at the top end of that range. This year's increases ranged from 2% to 8%, with most titles falling in the middle.

Although published rates are only the starting point in negotiations with advertisers, price hikes are still seen as a significant indicator of the mood for the year ahead.


"We're looking for larger increases than we have in the recent past," said John Loughlin, president of Primedia's consumer magazine division, which includes Seventeen and New York Magazine. He cited pending postage and paper increases for the move.

The aggressive stance doesn't really come as a surprise. Advertising demand remains strong, with ad pages up 16.4% through August compared to the same period last year, according to Publishers Information Bureau.

Publishers have been more aggressive because of fears of the impact of a 15% postal rate hike, even though it now appears postal rates will not rise that drastically. Media buyers said publishers have not been shy about discussing price pressures in meetings with advertisers.

"They're more prepared with their arguments that they should be more aggressive this year," said Dan Binder, VP-director of print investments at Bcom3 Group's Starcom Worldwide, Chicago.

Magazines on the higher end of the spectrum for 2001 include Hearst Magazines' Esquire, with a 9% rate hike, and Hachette Filipacchi Magazines' Woman's Day, which is considering a 9.8% increase. Rodale, whose titles have turned in mixed ad-page performances, will take a more conservative approach. An executive at the company said increases will range between 3% and 5%.

Conde Nast Publications' titles, which include GQ, Vanity Fair and Vogue, will have cost-per-thousand hikes of 8%.


Valerie Muller, senior VP-director of print services for MediaCom, New York, said Conde Nast, which is known for its refusal to negotiate published rates, often sets the standard. "Most people will try to follow suit and many will fall to slightly smaller" increases, she said.

"We're budgeting [for increases] around 5% or 6%," said Gene DeWitt, CEO of Optimedia International, New York. So far, though, he said he has "seen magazines trying to come in with a little more than that."

Other increases at leading magazine groups and key titles:

* Time Inc. flagship Time's rate hike will be about 5%. The company's In Style will raise its CPMs 4.9%, once a 7.7% rate base jump to 1.4 million is factored in, said Publisher Lou Cona.

* Hearst titles will have rate hikes of around 7%, said a Hearst executive.

* Hachette's increases look to be between 7% and 8%, said Nick Matarazzo, senior VP-international sales and marketing.

* American Express Publishing titles will have rate hikes between 6% and 8%, said CEO Ed Kelly.

* At Gruner & Jahr USA Publishing, Ken Wallace, incoming senior VP-corporate marketing and sales, said increases will be between 5% and 8%.

* Rate hikes at Primedia's largest consumer titles will range between 6% and 9%, said Mr. Loughlin.

* Business Week's rate base will rise 5.5% to 950,000 on Jan. 1, while its CPMs will increase nearly 8%.

* The Industry Standard will raise CPMs about 7%, factoring in a 33% rate base hike to 200,000 effective with the Oct. 9 edition.

Behind the aggressive increases is a measured optimism about the advertising outlook for next year.

"We're expecting 2001 will begin very strongly," said Connie Bennett, senior VP-associate publisher of Business Week, which has reaped the fruits of the tech boom to increase its ad pages 35.5% through August. But, she added, "at this point, making predictions about the second half is very difficult."


"The overall market is going to continue to remain strong as long as corporate earnings and profits are maintained," predicted Ed McCarrick, publisher of Time. At the same time, Mr. McCarrick said, "automotive [advertising] has been fairly flat for us and I'm not sure there's any overall windfall there" in the near future.

"I anticipate another good year," said American Express Publishing's Mr. Kelly. "I just don't know how good at this point."

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