Speakers at the annual American Magazine Conference had little positive to say about the short-term outlook for the ad industry in general, and magazine publishers in particular.
A number of advertisers, media buyers and publishers revealed they saw no let-up in unfavourable conditions for at least a year.
“Our ad dollars are going to be constrained substantially,” announced Frederick Hill, vp–marketing and communications at J P Morgan Chase. “We understand what we should be doing but ad dollars will be constrained till the second quarter.”
He went on to forecast that “by the end of 2002, a turnaround is likely,” though this “likely” downturned into “possible” when he was pressed. Hill was nevertheless more optimistic than most speakers; Jon Mandel, co-managing director and chief negotiating officer at MediaCom, revealed he did not see any ad upturn before 2003. The ad industry, he added, typically lags the overall economy by nine months when conditions are improving and six months when they are in decline.
Further pessimism was voiced by David Verklin, chief executive of media buying shop Carat North America: “We are projecting that total ad volumes are going to be down 10% in 2001 and 2002,” he said.
The magazine industry is in for a particularly bumpy ride, predicted Peggy Kelly, vp–global ad services at Bristol-Myers Squibb, due to its relative inflexibility. Advertisers need to book space in magazines some time in advance, something Kelly said they were not willing to do in the current climate.
The Publishers Information Bureau found that magazine ad dollars fell 1.2% year-on-year in September, with a 9.9% drop in ad pages. For the year to date, advertising revenues are down 2.5% and ad pages 9.2%.
News sources: AdAge.com; CampaignLive (UK) / Reuters