Articles of Interest

Monday, October 18, 2004

Consumer media usage - Joe Mandese

Folio: The Magazine for Magazine Management: To Hit Rosy Growth Projections, Mags Need a Year-End Surge - projections for the results for consumer magazines for 2003 - Industry Overview

It's time for prognosticators to update their predictions for the fourth quarter and beyond. And, depending on who you talk to, 2003 will go down as a decent year for consumer magazines - or mediocre at best. At least that's what the three leading industry forecasters - Universal McCann, Zenith Optimedia, and Veronis Suhler Stevenson - would suggest.

On the high end, Universal has consumer magazine ad spending rising 7.0% over 2002. But such optimism is partly due to easy comparisons with the losses of 2002 and 2001, and that outlook seems a bit rosy, given that total U.S. ad spending is projected to rise at half that rate.

Magazine Ad Spending Outlook

Universal is certainly wildly bullish compared with Zenith Optimedia, which projects a 3.0% gain in 2003 and Veronis Suhler Stevenson, which sees a 2.3% gain for the year.

In fact, without some breakout sales in the second half, all of these scenarios may be too rosy. Based on the first seven months of data from Publishers Information Bureau, the industry was on course for a puny 0.2 % increase.

The picture for 2004 and beyond also varies. Universal has yet to release a 2004 magazine outlook, but Zenith predicts magazine ad spending will again rise 3.0% next year; Veronis predicts it will rebound 7.2%. In fact, Veronis anticipates ad demand will remain strong and sustainable through 2007 (see table), the last year of its current long-term forecast. While Zenith doesn't look quite that far out, it does see a modest improvement in 2005, when it sees magazine ad spending rising 4.0%.

Ad Dollars Per Consumer Hour With Media

One reason Veronis has a rosy long-term outlook is that it pays close attention to how magazines compete with other media. The two key metrics are time spent with a medium and a newer metric the magazine industry has dubbed "wantedness." Based on the first, magazines perform pretty badly. Of the five major media - TV, radio, newspapers, magazines, and the Internet - consumer magazines rank last in terms of per capita time: 123 hours per person per year. By comparison, the average consumer watches 1,726 hours of television each year.

If that were the end of the story, the outlook for consumer magazines would be grim, indeed. But when you factor in another component of the Veronis data - how much people pay for the media they consume - the picture brightens considerably for magazines. The amount consumers pay for media is considered a vital component of so-called wantedness, and although magazines are consumed relatively few hours per year, the relative amount consumers pay for those hours - 38 cents - is the highest of any traditional medium.

By comparison, the average TV hour - the cost of cable or satellite TV - costs only 14 cents per person per year, the same as the average of the major consumer media. Radio is an even bigger bargain and presumably a greater "wantedness" question mark to Madison Avenue. It's free.

Only the other print medium - newspapers - rivals magazines in terms of the amount consumers pay per hour: 31 cents. And the only major medium to surpass print's relative consumer value is the Internet, at 58 cents per hour.

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