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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.

Print Publishers Still in Recession

Print recession continues

More at .

Who's Going to Pay the Journalists?

Guy Delivering Papers in the Snow

I hear that question a lot. As the mean-spirited bloggers steal audience from traditional publications, and as audiences migrate from reading publications printed on paper to reading them online (where the ad rates are lower), what’s going to happen to the Fourth Estate? Who’s going to pay for investigative reporting??

Seth Godin reminds us that the journalists and photographers aren’t the expensive part of running a newspaper or magazine:

“A magazine with a million subscribers might spend more than a million dollars to deliver a single issue to its subscribers. A million dollars spent on postage, printing, subscription sales, fulfillment, ad sales, sub rights and more. I wouldn’t be surprised if the freelance budget for the writers and photographers (the real reason people read the magazine) is less than 15% of the cost, perhaps a lot less.

“The economics of this business are interesting. Millions spent, millions earned, and almost all of it goes to pay for the paper and the friction it brings.”

So let’s ask different questions. Who’s going to pay for the paper? Who’s going to pay for our collections department? Who’s going to pay our enormous gasoline bill to fill up those delivery trucks? Or even, who’s going to sell the ads?

Two good things happen. One, the discussion is immediately less hostile: Reading news on the internet doesn’t mean you hate democracy. Two, solving the business problem gets easier. Is your ad sales team inefficient? OK, outsource to Google or Federated Media. Is your accounting group costing too much? Maybe software and offshore partners can streamline your approach. Paper, ink and delivery costs decimating your profits? Check out the Internet and the iPad.

2009 Ad Revenue: TV Down 10%, Internet Display Up 7%

Overall US ad revenue for 2009 was $125 billion, down 12%. Newspapers and radio fared the worst (down 20% each) with magazines (down 17%) not far behind. Online display ads were up 7%. Infographic supplied by the Business Insider’s Chart of the Day.

2009 US Ad Revenue by Media

Search Ad Spending Growing Fast Again

From :

“Search engine marketing firm Efficient Frontier has upped its estimates for search ad spending this year. The company now expects spending to increase between 15 and 20 percent, up from its earlier estimates of 10 to 15 percent growth, in part due to the economic recovery. By contrast, Efficient Frontier says search ad spending increased six percent in 2009.”

In Q4 2009 Google added to its enormous market-share lead:

“That was a shift from previous reports, which had indicated that Google was losing ground to Bing. Efficient Frontier says Google’s share of overall search ad spending increased to 74.5 percent from 73.9 percent during the previous quarter. Bing’s share, meanwhile, shrunk to 5.1 percent from 5.3 percent.”

US Ad Spending Down 12.9% in 2009, Another 2.6% in 2010

The global outlook is a bit better:

“Global ad spending will decline 10.2% in 2009 when the year is complete but eke out a 0.9% increase in the coming year, according to Publicis Groupe’s ZenithOptimedia.”

Internet advertising is the only ad sector to post gains in 2009. More at .

From :

“The net was the only medium to attract more money in 2009 in Zenith’s figures, though its growth curve is flatter than the early-2000s heyday growth of 40+ percent a year. It’s now on track for more modest but consistent growth pace of 9.5 percent (2010), 12 percent (2011) and 13 percent (2012), in line with that of TV, which will remain the dominant medium.”

Spending mix, as forecast by Zenith, through 2012:

Ad spending mix according to Zenith

Body Building Magazines Bucking Downward Ad Revenue Trajectory

Muscle & Fitness Mag Cover

Among SAI’s list of amid the recession, two of the titles are men’s body building mags: and . That surprised me….

Online Ad Recovery Not Helping Online Newspapers

From :

“Newspaper sites are the patent-leather stilettos of the online world: they get used for special occasions, but other shoes get much more daily wear. The beneficiaries of this behavior are networks and exchanges like Advertising.com from AOL and DoubleClick Ad Exchange from Google, which dominate the buying and selling of extra space.

“At nonnewspaper sites like Yahoo and Google, revenue from display advertising — the image-based ads on Web pages — seems to be returning. Yahoo’s display revenue on its Web sites increased 2 percent in the third quarter, though it was down from a year earlier. Display revenue increased at Google from a year earlier. “

ZenithOptimedia estimates Internet advertising overall to be up 9.2%, to $54.1 billion.

Rupert Murdoch: Advertising Improved in Recent Weeks

Rupert Murdoch

At a Goldman Sachs conference on Tuesday, Murdoch said all ad-supported units at Newscorp have been calling on a more receptive market in recent weeks. More at Hollywood Reporter.

CPG Dollars Move Online, Help Boost 2009 Online Advertising Out of Recession

While Nielsen and TNS both report that first-half 09 ad spending was down over the same period of 2008, by 15.4% and 14.3% respectively, TNS saw the online advertising segment up 6.5%. (Nielsen says online, like advertising as a whole, was down in the first half — but only by 1%.) According to TNS, CPG and wireless telecom are driving online’s growth.

From PaidContent:

“As for the reason TNS found for display’s sudden rise, the researcher pointed to the spending shift from traditional to online by consumer packaged goods marketers. That trend has been accelerating over the past year and is likely to continue, thanks to the promise of lower cost, better targeted spots.”