Top 10 magazine ad categories by year-to-date revenue and ad pages, through September (chart) DETROIT PUTS PUBLISHERS BACK IN THE DRIVER'S SEAT BUT PEAK PERIODS LIKELY TO MAKE LEAN SELLING PERIODS EVEN MORE SO

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For the first time in the last three years, consumer magazine publishers who gather at the annual American Magazine Conference this week will be able to bask in the glow of a full-fledged advertising rebound.

Publishers cited everything from the record collective profits chalked up by the Detroit automakers to the shelving of the Clinton healthcare plan as key reasons for the current renewed confidence among advertisers.

"There's a definite trend building, and if it continues there will be a record fourth quarter," says Kent Brownridge, senior VP-general manager at Wenner Media, publishers of Rolling Stone, US, Family Life and Men's Journal.

"Clearly there is a more optimistic attitude on the part of most major advertisers compared to 24 months ago," says William Kerr, president-chief operating officer of Meredith Corp., where the magazine group reported its second consecutive fiscal year of record profits.

Better Homes & Gardens lived up to its billing as the Meredith flagship with an 8% increase in ad revenue in the fiscal year. Niche titles were even stronger, with Traditional Home, Golf for Women, Country America and American Park Network all posting better than a 20% gain in ad revenue during the fiscal year.

"It's been a very strong pattern across the board in literally every category," he says. Overall advertising and circulation gains led the magazine group to double digit profit growth in fiscal '94, which ended June 30.

Hachette Filipacchi, forced to drop out of the Magazine Publishers of America in '93 because of parent company budget cuts, is enjoying a strong year in the U.S.

"Right now we're up in the low teens" in percentage ad revenue growth, says Paul DuCharme, senior VP-marketing. Through September, company flagship Elle was up 13.3%, escaping the fashion/retailing blues that have hit other titles.

The biggest contributor to this year's surge is automobile advertising, the single largest category for consumer magazines.

Auto marketers have rebounded from an ad slump in the second and third quarters of '93 to post strong growth in the first three quarters this year.

But the automakers don't stand alone in bringing smiles to magazine publishers. The computer, hotel/travel and direct-response categories all came roaring back to life.

But much as bombing victims who emerge into the sunshine after a blitzkrieg, today's post-recession publishers have found that the business topography has been permanently altered.

Some ad budgets are subject to wild month-to-month fluctuations. As a result, some publishers warn that the leanest issues during the past ad drought-such as Janaury/February and mid-summer issues-may grow even leaner as marketers increasingly chose to concentrate their ad firepower in peak selling periods.

"It is still month-to-month and account-to-account," says Steve Forbes, president and editor-in-chief of Forbes, which last year topped all consumers magazines in terms of ad pages.

In addition, the recovery hasn't smiled uniformly on all publishing houses. Hearst Corp. and Conde Nast Publications, in particular, experinced 1994 first-half ad page losses because of sluggishness in the fashion and beauty categories.

Another permanent change wrought by the early '90s recession: rate negotiation. It's evolved from a tactic despised by publishers to a fixture within many ad sales talks (see story on Page S-8).

"The hostility of rate negotiations may have quieted down," says Larry Dexheimer, a partner at New York-based ad agency Messner Vetere Berger McNamee Schmetterer Euro/RSCG, "but the reality is it's a fact of life and it's here to stay."

Also, database marketing, once considered an offbeat realm of the number crunchers and the circulation department, is now a big concern for virtually every major publisher.

One of the most useful results of the Time Inc./Warner Communications merger four years ago is a 55 million-name database.

The magazine wing of the company can draw on the database to help market an advertiser's products. At the same time, the database can also be a valuable source of magazine subscribers drawn from carefully targeted potential readers.

The company's Sports Illustrated has embraced target marketing with a selective-binding edition that goes out 20 times a year to 400,000 golfing enthusiasts on the SI subscriber base of more than 3.4 million.

Don Logan, Time Inc. president-CEO, estimates that about 10% to 15% of all Time Inc. advertisers now use the publisher's lists for some form of database marketing.

Even Conde Nast, shut out of most of the mainline corporate advertising from General Motors Corp. for years because of an avowed refusal to go off the rate card, has found a way back into the good graces of the big auto advertiser thanks in large part to the 11 million names in the magazine company's database.

Other publishers in this new recovery era wonder if the spotlight on ad positioning triggered by Revlon's pullout from Hearst this past summer will have a lasting impact on all publishers.

"The key battle now will be positioning wars," Mr. Brownridge predicts.

Other value-added things that can sweeten the pot range from selective binding to segmented subscribers.

"Magazines will have to fight hard against other media," Mr. Dexheimer says.

Despite this view, observers foresee the good times continuing.

"I see ad budgets increasing, because the clients' businesses are a lot better than they used to be," Mr. Dex-heimer says.

Mr. Logan predicts double-digit growth this year for the publishing wing of Time Warner, the nation's largest magazine publisher. And he anticipates most major publishing houses would be up anywhere from "high single digits to low double digits."

"We all remain cautious about our future anymore," says Mr. Logan, "but most of our advertisers know they have to build and promote their brands, and all signs are that the recovery will continue."

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