The May Standard Media Index data for the year to date tells a disturbing story around the current state of the newspaper and magazine advertising markets.
In 2012, PWC predicted that magazines would see a year-on-year advertising spend drop of 6.6 per cent, with newspapers seeing a decline of the same amount. The recent Standard Media Index data sourced by AdNews suggests these estimates are well off, with agency bookings for magazines for the period January-April down 24.9 per cent and newspapers down 19.3 per cent
While these numbers are only for a five-month period, they suggest that the erosion of both magazine and newspaper ad revenue is occuring much faster than the experts have predicted. Magazines in particular are in a challenging position.
Here’s the thing. In the December 2012 Circulations Audit Bureau report the audited magazines titles were only down 4.5 per cent year-on-year as a whole. Australians purchase over 12 million magazines per month, making it one of the largest magazine markets in the world. While each quarter there is focus on the titles with significant declines, or titles that have closed, the magazine market is very broad and overall the category is pretty healthy in terms of its relationships with consumers.
It is odd to see a category with such a strong consumer relationship somehow struggling to find the mark with advertisers. In an era where information supposedly wants to be free, the magazine sector is finding a way to generate 12 million transactions a month from consumers happy to pay money to access its content.
It is also odd to see a category with recognised impactful advertising formats, strong contextual environments, and content-led integration going backwards with advertisers at a rapid rate.
Magazines haven’t lost their way with consumers, they have lost their way with the advertising market.
The medium is in a tough position and faces numerous challenges. One, how do they balance their paid product with an unpaid digital presence? How do you create cross-platform brands without cannibalising circulation revenue? Secondly, as magazines are not as measurable as mediums like digital there is a lazy assumption that this means they are also not effective. Unfortunately there is a perception that measurability equates with effectiveness, a horribly incorrect assumption that is rapidly redirecting money away from analog channels perhaps without a robust rationale behind it.
All of these challenges are not going to be solved by a sudden dramatic influx in digital advertising revenue; the challenge is ultimately about re-establishing advertiser confidence in a medium that is still highly supported by consumers. The industry also needs much more conviction in the way it deals with the market. The magazine industry of late has generally been meek and mild publicly, struggling for oxygen against digital companies pushing research, insights, new developments and technology down the throats of agencies and advertisers. However, when it does come out swinging in a public forum the results are potent – as evidenced by Bauer chief executive Tony Kendall’s convincing win in the Mumbrella Battle of the Media just a few weeks ago.
Magazines have a lot to offer advertisers – an engaged, loyal audience who happily pay monthly for the title and editorial staff who intimately know the audience, their interests and how to engage them. Advertising format wise it’s flexible and has impact, with years of experience in content-led initiatives. And it’s generally a format consumed in isolation – it’s difficult to read 10 magazines at the one time, but very easy to have 10 tabs open on your browser meaning technically you are on 10 websites at the same time (with the assumption you are engaged with all 10).
One could argue that all of these areas are of critical importance to advertisers, especially in an era of fragmentation and limited attention where content is being put forward as a way to engage readers and communicate brand values.