Magazines aren't investing enough in social media to protect their position between brands and consumers, NYU professor Scott Galloway told a session of the annual American Magazine Conference in New York today. "Your livelihood is being threatened," he told the audience.
"Your industry is on the verge of a massive double dip," he said at another point -- with the second dip largely owing to Facebook.
Mr. Galloway is the founder of the think tank L2, which ranked magazines' "Digital IQ" earlier this year, and clinical professor of marketing at the NYU Stern School of Business, but he got a lot of attention earlier as an activist investor and board member at The New York Times Company. In 1997 he founded Red Envelope, the online gift retailer.
Magazine publishers have bounced back somewhat from the dark days of 2008 and 2009, Mr. Galloway told them, but they remain lodged in the teeth of a secular shift being driven by in large part by Facebook. As Facebook consumes increasing swaths of consumers' time, it is giving magazines new channels to reach consumers but also opening them up to disintermediation.
Burberry today has more than 8.6 million likes on Facebook, Mr. Galloway said, while Gucci has nearly 5.4 million, Chanel has almost 4.6 million and Ralph Lauren has more than 4 million. Vogue has nearly 1.7 million, by comparison, while Cosmopolitan has less than 1.2 million.
So Burberry has positioned itself favorably in front of young consumers just by showing up strong on Facebook. "Three years ago Burberry meant British and plaid," Mr. Galloway said. "Now it means British, plaid and innovative."
Social media is the corporate equivalent of skinny jeans, making you look hip, Mr. Galloway added.
But Burberry also now has a direct line to consumers -- no ad buy necessarily required, even if combining traditional media and social media delivers the biggest impact.
Magazines need to further entwine themselves with social media in general and Facebook in particular if publishers hope to maintain or improve their positions in the system, Mr. Galloway argued. Getting likes is going to get much more expensive, making these the salad days for running up audiences cheaply, he said.
There's plenty of good news, of course, for the media business. "When I was a kid, the product launches we got excited about were cars," Mr. Galloway said. Now product frenzies focus on phones and tablets -- media-consumption devices. The best news in a while came last week, when Amazon introduced a legitimate competitor to the iPad in its Kindle Fire, he added.
And Facebook's scale makes it an opportunity for publishers at least as much as anyone else, he allowed. China is all anybody can talk about, he said, but that 's not the right focus. "Your biggest opportunity globally is not China," he said. "It is Facebook."
