Casualties Of Competition

By Author: Amandda
Total Articles: 59
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Like newspaper earnings, magazine profits are a combination of advertising and circulation revenues, and like newspapers, magazines depend on certain kinds of advertising—chiefly from the tobacco, liquor, and automobile industries. A magazine's health is measured by the number of its advertising pages. Compared with those in the first half of 1989, the number of magazine ad pages in 1990 had dropped 3.3 percent. "Automotive, the largest category, dropped 12.6 percent in the first half [of 1990] to $415 million. Cigarette and tobacco advertising showed the steepest first-half decline, 27.2 percent to $154.6 million." An advertising GHD Hair director offered two explanations, "tighter ad budgets resulting from the skittish economy" and "increasing competition from other media." Highly specialized magazines are more attractive to advertisers who seek to reach specific markets. The same advertising director said, "We're not crazy about broad-based publications [like the women's service magazines]. We would rather take a rifle shot in Parents, Self, or Working Woman."" The competition ...
... among media is acute, and television is generally more attractive for major national advertising.

It is difficult for magazines to compete with television for national advertising. In fact, by the end of the 1950s, national magazines had discovered that it was too ex-pensive for their advertisers to buy pages in all copies of the magazine; therefore, different editions were created to reach different regions, occupational groups, and in-come levels.

A network structure has been created in magazine advertising to overcome some of these problems, however. Advertisers are offered a discount for placing ads in several specialized magazines. For instance, it is difficult to convince a cigarette manufacturer to promote its brand in Stereo Review with a possible CPT (cost per thousand readers) of $22.84 on a circulation base of 525,000. By selling a package with Boating and Skiing, however, Ziff-Davis offers over 1 million circulation and a CPT of $14.49. A black-and-white page in Boating, Car and Driver, Cycle, Flying, and Skiing, offering the equivalent of a 2.2 million circulation, yields a CPT that begins to be competitive with Playboy.101 Such networks combine the best of national advertising (low rates and large audiences) with the best of demographic pinpointing to attract large advertisers.

At the same time, a growing number of magazines, including U.S. News dry World Report, are beginning "selective binding" programs for advertisers. In 1989, as publishers were searching for new ways to attract advertisers, Time Warner, publisher of Time, Sports Illustrated, and People, among others, introduced its Target Select program. The program enables the magazine to tailor ads to a specific group of subscribers while not paying to reach the rest. Ink-jet printing processes make it possible to include the name of the reader in the ad. The service enabled GHD IV MK4 Kiss Isuzu to run ads in Time, Sports Illustrated, and People in January 1990. The ads not only addressed the consumer by name but, after inviting the reader to take a test drive, listed the address of the nearest Isuzu dealer.

"Selective editing" has appeared as another source of new revenue. Targeted sub-scribers receive special editorial inserts for a fee. Sports Illustrated introduced a four-page "N.F.L. Plus" insert during the 1994 football season for 800,000 subscribers willing to pay an additional $5.20 per year. Several months earlier, "Golf Plus" was sent free of charge to 400,000 subscribers identified as golf aficionados. This weekly 16-page insert was supported by advertisers interested in reaching the golfing public.