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RANCHO MIRAGE, Calif.-Despite a looming battle with consumer magazines over postal rates, most trade magazine executives at the annual American Business Press convention last week were dancing in the desert.

The source of their pleasure: Recessionary clouds finally lifted in the first quarter of 1994. Ad revenue for the year is now projected to jump anywhere from 5% to double digits.

The ad page surge, coupled with tight cost controls, is expected to push profit margins for trade publishers back to their prerecession heights. Last year, pretax operating profits jumped to nearly 17%, up from 12% in 1991, according to preliminary results from an every-other-year ABP study.

The executives' buoyant mood helped alleviate ABP's minor embarrassment in failing to find a replacement for President John Emery, 64, who announced in July he would end his five-year reign when his contract expires May 31. The top candidate for the $225,000-a-year job reportedly turned down the offer.

"It's more important to get the right person than to make a quick decision," said Gerald S. Hobbs, chairman-CEO of BPI Communications, who heads the search committee.

Traditionally, the post has gone to a former trade magazine executive, but the committee has widened its search to include former politicians and government officials.

On the mail front, Postmaster General Marvin Runyon last year indicated preliminary support for second-class postage reclassification to help the large consumer publishers who pre-sort magazines and ship by pallets.

Trade publishers, who generally don't ship enough magazines to palletize, claim a break for the big publishers would translate into a penalty for small publishers and fear they could be hit with a 25% postage hike.

Millions of dollars are at stake, and the battle could be a bruising one.

Still, pleasure about the ad page revival dominated the gathering.

"For the first time in three years, ad revenue is coming in up to expectations," said Thomas Kemp, exec VP-chief operating officer at Miller Freeman, a San Francisco-based trade publisher of the U.K.'s United Newspaper Group.

The reviving travel market and continuing boom in high tech titles is offsetting sluggishness in the medical field, he said.

High tech publishing company CMP Publications raised eyebrows by skipping the convention, and rivals Ziff-Davis Publishing Co. and International Data Group had limited representation. However, it wasn't because of underlying softness in the high tech side of the business.

Patrick Kenealy, president-CEO of PC World and the sole representative from computer publishing giant IDG, said he expected magazine group revenue to be "up 14% to 15% this year."

More traditionally based publishers said they expect single-digit growth. J. Roger Friedman, newly elected ABP chairman, said at retail-oriented Lebhar-Friedman, "markets overall are up marginally with ad spending up maybe 5%."

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