Conde Nast Ad Pages Plummet but Not All Doom and Gloom for Magazines

Not to ‘dog pile’ on an industry and a company, in particular, that is obviously struggling, it is important to keep track of where traditional media buys (newspapers, magazines, TV etc) are heading. It’s important to see where the balance may occur between online and traditional as well as a barometer on the economic environment we all are living with but seemingly saying less about these days.

Conde Nast has already cut four titles this year which sent a shiver down the spine of the magazine industry as a whole. Now, as the company reports on its 2009 ad page sales it becomes obvious why that kind of move may have been the only choice. The New York Times reports

The company’s ad pages at monthly magazines have declined by almost a third since last year, with the company losing 8,359 ad pages this year, according to estimates it released Wednesday. Condé Nast began cost-cutting this fall, closing Gourmet, Modern Bride, Elegant Bride and Cookie.

The worst-hit magazines for the year were Architectural Digest, where ad pages fell 49.9 percent; W, where ad pages fell 46 percent; and Condé Nast Traveler, where pages fell 41.1 percent. Details and Wired both fell about 39 percent.

Ouch, those kinds of numbers usually have a sound effect attached to them (cue the Wile E. Coyote plummeting to his demise audio). The sound that everyone is waiting for next is the thud of when this trend finally hits bottom.

What needs to be watched is that this kind of result is seen as a referendum on the magazine industry as a whole. It’s actually not. The reason that Conde Nast is taking such a beating is that their titles are almost all pointed at the luxury market and the advertising money in that segment has dried up.

On the other side of this is the Meredith, publisher of titles like Family Circle, Better Homes & Gardens, Fitness and more is actually doing better than last year. Why? They are reaching more mass market audiences and there is an emphasis from food advertisers and other marketers who provide products and services that focus on people doing more at home so they can save money. Makes sense.

So while the newspaper industry as a whole is declining that same kind of blanket statement may not be fair in the magazines because magazines do something that the Internet does as well; provides targeted content to particular segments. As a result, marketers to these segments will buy because there is value.

Wow. How about that? You provide value and people buy things. Who woulda thunk?

Smaller Newspapers Have Fared Better Than The Big Boys

If you work for a smaller paper or you have a favorite local paper that you simply don’t want to see fade into the sunset this is OK news. I can’t honestly say that there is real good news. It’s about the newspaper business after all. TechCrunch reports that statistics gathered by the Inland Press Association show that overall the average drop in profits for the industry as a whole was 77.6%, So how do you find a bright spot in that kind of number? You look at who is floundering the least and go from there.

The sad thing is that even of the economy comes back strong at some point this century newspapers may not even see improvement because it’s the medium, not the economy, which is the biggest culprit in the agonizing demise of a once vibrant industry. The chart below shows just how bad things are for the newspaper industry and there is little hope for recovery.

Only one category saw a revenue bump in over the 5 year span studied and that was the smallest of the small papers. There are many possible reasons for this including the lack of online hyperlocal content thus allowing the paper to still be relevant as well as the lower overhead. But is this just delaying the inevitable?

One major reason for the little guys still holding some ground is the classifieds. I personally never look at the classifieds for much of anything so I am a little surprised by this

Another sign of hope: small papers still have a hold on classifieds. Average classified sales for small papers have actually gone up, at a time when they have been declining for most papers. Inland cites an example of a daily newspaper with a circulation of less than 15,000, which posted a 210.4% increase in classified revenue from 2004 to 2008. But it didn’t do much good. The paper’s profits were down by almost 30%.

Now the paper’s profits were down 30% which still means that they were profitable. Now, we’re getting somewhere. This data, however, is just like most where it can be a bit misleading. Considering the sources were the papers themselves and the information was offered voluntarily and with anonymity there may be room for some fudging. Also, there was no recognition of who suffered tremendous losses and who fared OK. The numbers can best be seen as an average.

Who really knows the real deal but there is certainly not a lot of room for celebration. When you have to concentrate on who suffered the least then you have to figure that no matter where a paper is on the scale of size there is not a tremendous amount of hope for the future.