Consumer titles still hot; mass market titles emerge winners from 1989's scratch-and-claw ad market

Folio: The Magazine for Magazine Management, March, 1990 by Kevin Sghia

Consumer titles still hot

NEW YORK CITY -- Now there's good news for those publishers who bemoaned single-copy woes, suffered ad-clutter complaints and faced competitors who did all but roll over and beg for extra ad pages.

Consumer ad revenues were up 10.9 percent last year, showing double-digit growth for the first time since 1984. Moreover, ad pages also broke records for the 166 magazines tracked by Publishers Information Bureau (PIB).

Total ad revenue topped $6.6 billion--a newhigh. Adjustments for discounts and rate negotiations, however, bring revenue to about $5.1 billion, according to one calculation.

The rosiest magazine categories were business, travel, auto and bridal, along with the Seven Sisters. And, surprisingly, only a few categories, such as investment and gardening, suffered an off year, says Sarah Crowley, associate media director and director of print advertising for Hill, Holliday advertising. Individual books may have struggled, she notes, but most categories did well.

Despite the surge in specialty books, many ad-heavy mass market titles performed better this year than in 1988, says Donald Kummerfeld, president of MPA. Both Time and U.S. News & World Report, for example, reported big gains, as did most of the Seven Sisters.

Time Inc. Magazine Co. titles topped the revenue charts, with Time, Sports Illustrated and People Weekly together bringing in over $1 billion in ad revenue for the company. TV Guide was fourth, despite losing ground last year, and Business Week rounded out the top five.

"Clearly, the Time titles benefited from the MAX-PLAN," says Richard LePere, a publishing management consultant. The plan, which rewards network advertisers with free pages, evidently also helped Fortune: The biweekly was seventh in overall revenue and showed almost 22 percent revenue growth.

The real story, however, is that the total revenue for consumer ads has shown strong growth for three years, gaining 5.5 percent in 1987 and 8.6 percent in 1988, says Kummerfeld. Advertiser spending on magazines has grown for 14 years straight, he says, but 1985 and 1986 were actually flat when adjusted for inflation.

Automotive advertisers contributed most to the big year, spending nearly $900 million, despite changes in media strategy that led Nissan and General Motors to pull a combined $350 million from magazines. The push for pages came largely from auto advertisers selling luxury cars.

Some strong categories turned negative numbers into positives last year. Business/consumer services went up 12.9 percent, and food advertisers rose 15.5 percent after spending less in magazines in 1988 than in 1987. The biggest gainer was beer, wine and liquor, which jumed 19.1 percent from 1988.

False boom in business titles?

On the surface, at least, major business titles finally rebounded from the stock market crash of 1987. Business Week outpaced all titles, with 4,914 ad pages, compared to 4,586 in 1988. The magazine also topped other business weeklies with over $260 million in ad revenue. Fortune, up 16.6 percent in pages, showed the biggest gain of any business title since the stock market crash, with an increase of over 700 pages.

Forbes had 12.9 percent page growth, and its revenue climbed 22.5 percent, to over $157 million. Entrepreneur also showed the largest percentage gains.

Crowley, however, calls the business-book growth "a farce. Free pages are a common practice for any advertiser that has committed to those titles. I have not noticed this degree of free pages in any other category."

Only a handful of business magazines posted losing numbers, most notably the struggling Manhattan, inc. It was down 15.9 percent in revenue, dropping from $8.2 million to $6.9 million. High Technology Business had the worst numbers of any PIB title: down 50.5 percent in revenue and 53.5 percent in pages.

Moreover, the leading investment magazines declined. Money, slightly off in revenue and down 7 percent in pages, didn't appear to benefit from the MAX-PLAN. Changing Times fell off 8.5 percent in pages and 4.7 percent in revenue. "These books never made it back after the stock market crash," says Crowley.

But travel titles had a strong year, thanks in part to a 16.4 percent increase in spending by travel, hotel and resort advertisers. "Travel has been a booming market the past five or six years,c says LePere.

Conde Nast Traveler, whose forth-right editorial sent some offended advertisers packing had gains of 78 percent in revenue and 52.7 percent in pages. "The fact that they shoot straight from the hip is the reason advertisers want to be in the book," says Crowley. Travel & Leisure, the category leader in revenue, showed a healthy 19 percent growth. Also strong were European Travel & Life and Endless Vacation.

Meanwhile, the automotive category was strong from top to bottom, with two books, Car and Driver and Motor Trend, showing over 20 percent revenue gains. And both Bride's and Modern Bride walked off with double-digit gains in pages and revenue. With the exception of Better Homes and Gardens, morever, the Seven Sisters were all up at least 9 percent in revenue--no doubt due to extensive marketing "partnerships" among packaged-goods advertisers.