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2013 US Advertising Growth Includes Print Magazines Too

According to new data from Kantar Media, US advertising spending for Q2 2013 is up 3.5% over the same period in 2012, to $35.8 billion. Cable TV made the greatest gains, up 14.9%, and Spanish-language TV was up 6.1%. On the other side of roster, newspaper advertising is down 4.3%.

September Magazine Issues

The most interesting news to me, though, is the section on print magazines. Ad revenues for consumer magazines are up 1.9%, although (if you want to quibble over the details) they sold fewer ad pages than last year, each one at a higher average rate. And Sunday magazines, the magazines inside newspapers, grew ad revenues by 4.1% — the same rate by which Internet display ad revenue grew.

Digging into individual titles shows more signs of vitality. The September issue of Vogue is the fattest since 2008 — 665 pages of ads — and the September Elle just broke the record for highest page count ever for a Hearst publication. W, Bon Appetit, Allure, Teen Vogue and Glamour all had their best Septembers since the 2008 financial crisis. The Atlantic, with its diversified approach across print, digital and events, is on a tear.

Who’d a thunk it?

As Brands Become Publishers, Publishers Become Retailers

From last week’s NY Times:

Fashionistas who are following the latest runway collections being shown this month have the opportunity, beginning this season, to buy some of those looks, from designers like Diane von Furstenberg, Marc Jacobs and Derek Lam, right from the Web site of Vogue magazine…. Fashion magazines are suddenly getting into the retailing business.

Some high-end retailers aren’t thrilled to see competition coming from the media partners who cash their advertising checks.

But, hey, wait a second. Haven’t brands themselves spent the past five years — especially as they venture into social media — trying to reinvent themselves as content publishers? When I was at Federated Media we described our “conversational marketing” services as exactly that — “we work with brands to create media” and “brands must become publishers.” The NY Times suggests that the practice is now mainstream:

Mr. Granger [Esquire's editor-in-chief] said that many magazines were making similar moves because retailers were starting to move in on their turf. The new Barneys catalogs, photographed by big names like Juergen Teller, look more like an issue of W, with clothes shown on New York celebrities, and shopping online at Net-a-Porter looks more like flipping through the pages of Harper’s Bazaar.

It’s very hard, even for an experienced magazine publisher, to do what Vogue does. Just like it’s really really hard, even for a veteran retailer, to knock Barney’s off the block. The odds are slim that Conde Nast will dominate high-end retail any time soon, or that we’ll cancel our subscriptions to W because Nieman Marcus catalog has displaced it.

So I love to see both sides adding to the competitive fray — publishers trying to be retailers, and brands trying to be publishers. Increased competition usually leads to innovation. Maybe, in their efforts, some publisher’s will lose their editorial credibility (and then their audiences and then their ad support), and that would be sad. But I think it’s more likely that publishers like Vogue, Esquire and Style.com understand that it would be suicide to pimp out their editorial credibility, and so they’ll find a way to execute these new ad partnerships without losing their souls. Maybe they’ll even find a new business model that supports quality digital publishing.

(Disclosures: My employer, Luminate, is a company dedicated to making images interactive. Publishers use our image-applications platform to provide their end users with apps that enhance images with relevant content and services. One of the applications lets users scroll through products in the picture, and click out to a retailer if they’re in a buying mood.)

Conde Nast Will Charge More for Print and Online Content

When I saw yesterday that Conde Nast plans to increase the rates it charges readers of its magazines and websites because, according to CEO Charles Townsend,

“We have been so overtly dependent on advertising as the turbine that runs this place, and that is a very, very risky model as we emerge from the recession,”

my first thought was: Oh come on. There have been plenty of recessions and one Great Depression since Conde Nast began a publishing empire built around ad-supported magazines, starting with Vogue and Vanity Fair (which in 1915 ran more ad pages than any other US magazine). I thought here’s another traditional publisher that’s preparing its audience for a post-Internet iPad paradise where readers will pay for their digital content.

My second thought was: Maybe, but so what. Conde Nast should have raised subscription and newsstand rates ages ago. When Henry Luce launched Fortune Magazine in 1930, he charged $1 per issue at a time when the Sunday New York Times cost $0.05. The whole point (according to Alan Brinkley’s telling in his Luce biography The Publisher) was to weed out the riff-raff who couldn’t or wouldn’t pay such an insanely high price for a copy of magazine, and then to make a mint selling advertising against such an upscale audience.

Fortune Magazine Cover February 1930

Whether or not the content-is-free culture of the Internet gives way to an I’ll-pay-for-the-premium-stuff future, Conde Nast should raise rates for their magazines. Vogue, Vanity Fair, Glamour and GQ readers aren’t highly price sensitive. And besides, the advertising pitch gets better when your readership is limited only to those with lots of disposable income.

Conde Nast Shuts Down Portfolio Magazine

The crack team at ChasNote had its doubts when Conde Nast launched its expensive, high-gloss business mag Portfolio two years ago. I’ve encouraged them not to gloat, though; they were not alone in expressing disbelief that a media company would launch a $100-million-plus investment in a monthly print magazine in the Internet-enabled year of 2007.

Alas, it’s now over for Portfolio. From TechCrunch

:

“Portfolio saw itself in the same vein as the Fortune magazine of the 1930s, filled with lush photographs and long narratives. But that formula doesn’t work in an age where business is about speed, not leisure or luxury. It also doesn’t work in an age where monthly magazines in general are increasingly challenged by the wealth of instantaneous business news available on the Web. (And you thought the daily newspapers had it tough). Portfolio’s insistence on favoring its print over its Website content also helped to hasten its demise. If you are going to start a magazine these days, the Website has to come first. The magazine companies still don’t realize this simple fact.”

Conde Nast (Like All Good Publishers) Helps Make Ads

From NY Times:

“LG ELECTRONICS used to run separate advertisements in each country it did business in, and the ads focused on the products it sold: televisions, phones and home electronics. Now, it is introducing its first global campaign featuring a celebrity. And it was not a Madison Avenue agency that designed the ad, but that eminent wrangler of celebrities, Conde Nast….”

Annie Hall dvd

Never Cry Werewolf psp

“The Conde Nast Media Group, which created the ads, earned almost $100 million in revenue from custom work like this in 2008. It has created campaigns for the department store chain Dillard’s, the vodka Grey Goose, and the luxury car brand Lexus, which have included in-store events, parties and television programs. All the advertising it creates must run in Conde Nast magazines and Web sites.”

This isn’t unique to Conde Nast, and it isn’t new. So why is that independent blogs (or their partner FM) get so much flack when they help their sponsors devise and execute ad campaigns designed, like those made by Conde Nast, to be more relevant to their own audiences?!

Publishers Expand High-End Marketing Services Online; Where Do Ad Networks Fit In?

From yesterday’s WSJ in an article about traditional publishers acquiring web services platforms like Conde Nast’s acquisition of FM alum Reddit.

“Usually when publishers acquire technology companies it’s to spruce up their own Web sites. But increasingly publishers such as Conde Nast and Meredith are drawing on the technology to create advertising campaigns for marketers.

“This takes publishers further into the realm of marketing services. Instead of simply selling marketers ad space, they’re rolling up their sleeves and designing the promotions as well. For the next five months, visitors to the Dillard’s Web site will be able to rank products featured in a top-10 list selected by Conde Nast’s Lucky magazine and fashion Web site Style.com. The fashion lists will rotate seasonally, giving visitors the chance to rank new items every two weeks. The top-rated item on the list then will appear in Dillard’s online ads running on nine Conde Nast Web sites, including Teen Vogue, Glamour, Style.com and Vanity Fair.”

Smart. Also not surprising. High-end offline media companies have always had staff and production capabilities to provide marketing services well beyond trafficking and inserting commercials. This is part of what drives premium rates at leading media brands. Advertisers expect their media partners to do more than cash their checks; they demand that their media partners help them succeed among an audience that the media companies know best.

This is why I was confused by news that ESPN has discontinued working with ad networks. I get it that ad networks cause pricing and channel conflict because — despite promising publishers like ESPN to sell their remnant inventory in a blind manner, as part of a “channel” — they sometimes pitch site-specific opportunities. They offer lower rates for the same banners ESPN sells directly. This is a partnership problem, a serious one, but one that should be addressed with tactics short of termination. It’s not religious problem, as ESPN and others have portrayed it. From Mediaweek:

“ESPN’s decision crystallizes a philosophical debate in the online ad sales industry that has intensified since the Interactive Advertising Bureau’s annual meeting last month when during a keynote address, Martha Stewart Living Omnimedia media president Wenda Harris Millard gave her now famous warning against selling Web inventory like ‘pork bellies.’”

My interpretation of Wenda Harris Millard’s pork-bellies battle cry is this. Digital publishers need to remember that they are publishers — companies that engage with high-quality audiences around content in a unique and magical conversation, and service firms that know how to chaperon marketing brands into those conversations. In other words, companies in the mold of Conde Nast, Meredith and ESPN that offer high-touch marketing services.

Whatever ad avails you don’t sell, offer up on the pork-belly exchanges — online we call them ad networks (or Google Adsense), in TV we call them PI or DR rep firms. Hey, people sometimes want pork bellies, and audiences almost certainly don’t want 30-seconds of white static whenever a TV network fails to sell 100% of spots.

But if you don’t or can’t articulate what it is that makes your media brand uniquely valuable to your marketing partners (hint: it’s not your demographics), you’ve ceased to be publisher.

More on the difference between publishers and ad networks from Battelle.