It Was a Very Good Year

If magazines this year seemed unusually plump with ads, they were. It was the best year for magazine advertising in more than a decade.

By year-end, overall ad revenue is expected to rise 13% over last year, to $12.7 billion, and ad pages will grow 6% to 230,000, according to the Magazine Publishers of America.

Not since 1984 has the industry enjoyed such gains, the trade group said.

The main reason for the robust growth? The economy, magazine executives said without hesitation.

“The consumer feels good, unemployment is low and you have a strong stock market,” said David Pecker, chief executive of Hachette Filipacchi Magazines, which publishes such titles as Elle, Woman’s Day and Car and Driver. “This is fueling companies to launch new products, and to launch new products, they need to advertise.”

But other factors also are in play, including the priority advertisers are placing on building brands and targeting their markets.

“A few years ago, people said our industry had seen its best days, but look where we are now,” said Don Logan, chairman and chief executive of Time Inc. “I believe more and more advertisers are understanding the importance of print media for brand-building.”

Logan said magazines lend themselves to brand building because they tend to have a longer shelf life than other media. It’s not as “perishable” as electronic media, he said.

A lot of information also can be conveyed in magazines, which has attracted advertisers such as pharmaceutical companies.

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From January through November this year, drug and remedy companies spent $770 million in magazine ads, an increase of 30% over last year.

Drug companies have been using magazines and other advertising to launch new products. Until recently, pharmaceutical companies couldn’t advertise on TV without providing detailed information about their products. That made magazines a good vehicle for getting their messages across.

Automobile companies have boosted spending in magazines to advertise their new cars and corporate names. The automotive industry placed $1.6 billion in ads this year, an increase of 21%.

Beauty and fashion companies also took advantage of the prospering economy to showcase their products. Cosmetic firms increased their magazine ad spending to $1 billion, up 14%.

“Major designers have become brands, and they’re using magazines to become brands,” said Steven Florio, chief executive of Conde Nast, which publishes Bride’s, Vanity Fair, Vogue, GQ and several other popular titles.

Special interest magazines are benefiting from a trend toward targeted marketing, said Michael A. Clinton, chief marketing officer of Hearst Magazines.

“The big buzzword in marketing circles these days is how a marketer can get closer to his customers,” he said. “A lot of companies have developed in-depth profiles of their customers, so it leads them to be a lot more focused in their advertising.”

Always on the hunt for ways to raise ad revenue, magazines also are continuing to come up with special issues and events to attract more advertising.

For instance, GQ sponsored an awards ceremony and celebration at New York’s Radio City Music Hall this year to coincide with its Men of the Year issue. Entertainers such as David Bowie, Steve Winwood and David Duchovny attended the heavily publicized event, which helped draw attention to the November issue.

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As a result, the magazine ended up with 310 ad pages for that month, making the November issue its best of the year.

People magazine, the top publication in terms of ad revenue, also scored with its Sexiest Man Alive issue. That issue, with George Clooney on the cover, drew 119 ad pages, its highest for the year.

“Advertisers want to be associated with our sexiest man issue because the subject matter is fun,” said Nora P. McAniff, People’s publisher. “We also promote it heavily, and it’s on sale for two weeks.”

Aside from its special issues, People’s success also came from its ability to draw new advertisers, including luxury cars and prestige cosmetics.

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“I think the breadth of our editorial content lends itself to a wide range of advertisers,” McAniff said.

Although the magazines generating top revenue continue to be long-standing titles such as People, Sports Illustrated and Time, several newer publications fared well this year too.

Martha Stewart Living, for instance, saw a 72% increase in ad revenue, while Time Inc.’s In Style celebrity magazine posted a 106% increase. Another big gainer was the women’s magazine Marie Claire, which generated 39% more revenue from January through November of this year.

But now, with one of their best years behind them, magazine executives are wondering what’s going to happen next year. Most predict gains, but fluctuations in the stock market and the economic crisis in Asia have made some skeptical.

“Although the economic crisis seems far removed, it could produce a domino effect,” said Steven Cohn, editor of Media Industry Newsletter, which tracks magazines. “Some companies with business there will lose out, and then magazines will lose out.”

But early signs are giving magazine publishers reason to be optimistic about next year’s outlook.

GQ, for instance, sold 20% more ad pages for its January 1998 issue than for January 1997. Other publications also are reporting similar gains.

“Business continues to look robust,” Hearst’s Clinton said. “We’re all watching the situation in Asia, but the momentum from this year seems to be carrying on through the first quarter.”

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Glad Mags

This was the best year in more than a decade for magazine advertising revenue. Magazine executives say the strong economy helped boost ad pages to record numbers this year at many publications. They are the growth should continue next year, although less dramatically.

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1997* ad revenue, % increase Magazine in millions from ’96 People $519.5 11.3% Sports Illustrated 483.1 2.8 Time 460.5 19.9 TV Guide 445.0 17.9 Newsweek 364.0 7.9 Better Homes & Gardens 348.8 13.9 PC 294.8 4.5 Business Week 292.6 10.6 Forbes 215.4 13.5 US News & World Report 210.0 7.7 Woman’s Day 209.8 7.2 Fortune 202.5 14.4 Good Housekeeping 197.6 21.8 Reader’s Digest 194.9 5.8 Family Circle 190.5 19.5 Cosmopolitan 172.8 19.6 Ladies’ Home Journal 165.7 13.7 Vogue 137.4 13.1 Entertainment Weekly 129.5 16.4 Glamour 126.3 18.2

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*Through November

Source: Publishers information Bureau