NEW YORK — In magazine advertising terms, 2006 is shaping up to be a lot like 2005: not great, but not horrible either. Contemplating the first quarter and beyond, publishers are again expecting to be able to grind out small gains, but only by fighting for every dollar and page.
But while overall spending will likely continue at a similar pace, the ad landscape for magazines is changing in a variety of important, even dramatic ways. WWD talked to publishers in the fashion, beauty, men’s lifestyle and teen categories to find out what the biggest changes are and how they will affect business in the year to come.
One theme that cropped up in almost every conversation was the migration of dollars from established media outlets to newer ones. While ad pages for fashion and beauty magazines as a whole were roughly flat this year, lifestyle-oriented women’s titles such as Real Simple, Martha Stewart Living and O, The Oprah Magazine posted double-digit increases.
“The biggest negative impact for me has been [from] the lifestyle magazines,” said Carol Smith, Elle’s group publishing director.
“You’re going to continue to see a flat situation among traditional fashion and beauty magazines, with the growth coming in other places,” predicted Jim Taylor, publisher of Town & Country.
One factor uniting the magazines that will perform well in 2006 is their ability to stimulate sales of products, according to Harper’s Bazaar publisher Valerie Salembier. “The way the flock is moving is toward more commercialism,” she said. This mind-set, she added, is increasingly held not just by mass brands but by luxury marketers, who in the past have been content to treat magazines as a branding tool rather than a driver of sales.
“Before, it was always, ‘We’re looking for image, image, image,'” agreed Men’s Health publisher Jack Essig. “Now, a lot of the smartest marketers are really focusing in on selling product.”
On a wider scale, publishers are trying to stem the tide of dollars flowing out of print and into television (especially cable), the Internet and even newer outlets, such as satellite radio and mobile telephones. “There’s some very seductive new media emerging all over the place,” said Maxim publisher Rob Gregory. “Clients want to know more and more about them, and they want to delay spending in traditional media to give themselves time to evaluate them.”
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But while there is plenty of downside to this trend — a number of publishers lamented the continuing flight of liquor advertisers to cable — there is, increasingly, a significant upside as well for magazines. As Gregory put it, “Magazine brands that are big enough to move immediately into satellite radio, mobile, podcasts, all that stuff — those are going to be the brands of the second half of the decade.”
He estimated that ad spending on Maxim’s Web site, its satellite radio channel and its mobile phone network already constitutes 5 to 10 percent of the brand’s total ad revenues. Similarly, Cosmogirl publisher Kristine Welker said 5 percent of the brand’s income was driven by its Web site, the revenue from which she forecasts to double in 2006.
The nature of online advertising is changing as well. Prior to 2005, most Web advertising came from the automotive, financial and consumer electronics categories, according to Dee Salomon, managing director of Style.com (which, like WWD, is part of Condé Nast Publications). Now, she said, a brand’s online ad base is coming to resemble its offline advertisers.
“The model that was paved by luxury automotive and luxury financial is trickling across to fine jewelry, big names in fashion and to beauty,” she said.
“It’s mirroring the magazine more now in terms of category strength and growth,” said Seventeen publisher Jayne Jamison of her Web site.
From a demographic standpoint, the aging of the Baby Boom generation will continue to exert a massive influence on ad spending patterns. Allure publisher Nancy Berger said skin care was the strongest area of growth within the beauty category, a fact she attributes largely to the popularity of new antiaging products. “Our research shows women who are just entering into their mid-20s are already thinking about antiaging,” she added.
Town & Country’s Taylor said he believed body-consciousness among Boomers was the force behind strong sales of high-end watches and other accessories. “As they get older, they’re going to buy their luxury in the form of shoes and jewelry rather than form-fitting clothes,” he said.
Finally, the upheavals in a few key industries will have an outsized impact on 2006 ad sales. Looming large in the minds of publishers are the lingering ripples from the Federated-May merger. For many prestige beauty marketers and makers of bridge and better lines, “it is going to be a traumatic change in their business,” said Elle’s Smith. “I would not want to be in the position of having to replace those sales.”
The U.S. auto industry, meanwhile — which was already challenged heading into 2005 — is facing what may be the end of the SUV boom. Playboy publisher Diane Silberstein notes that searches for SUVs on Cars.com were down 25 percent in November. “It’s scary — their business is just terrible,” said Diane Newman, publisher of American Media’s Active Lifestyle Group. But several publishers noted that increased spending by Asian automakers was largely making up for the cutbacks in Detroit.
All in all, most publishers say they are feeling good about 2006 — a mood Cargo’s Lance Ford chalks up to “either blind optimism or a cultural phenomenon in the States: We really believe that this, too, will pass, and we’ll spend our way out of it.”
But Esquire publisher Kevin O’Malley no doubt spoke for many when he said, commenting on all the tempered optimism out there, “Fairly bullish in 2006 is fairly different than fairly bullish in 1998.”