Magazines Are Suffering From Declining Ad Revenue
The magazine industry puts on a brave face, but data doesn’t lie.
New analysis from the Association of Magazine Media, which unabashedly pushed the power of print magazines as an advertising vehicle, shows an industry still trying to find its place in an instantaneous world while advertising revenue continues to slip away.
Reported magazine ad spending by the 50 biggest advertisers last year fell to $6.1 billion from $6.5 billion in 2016, according to AMM’s annual report. So magazines lost at least $417.5 million in revenue last year, a difference of 6.4 percent, numbers AMM did not make readily available in its report, which was sponsored by magazine printer Freeport Press.
The report notes how top advertisers spent their marketing dollars. Pfizer Inc., Johnson & Johnson, LVMH Moet Hennessy Louis Vuitton, Estee Lauder Cos. Inc., Kering, Chanel, and Amazon were all WAY down, more than offsetting increases from the likes of Proctor & Gamble and L’Oreal. As just one example, Pfizer’s spend decreased by $85mm. That’s a whopping number.
With whopping ramifications. More from the WWD:
With so much money being lost in print advertising, which is largely being diverted to other avenues, like Facebook, Google and influencers, it’s no wonder magazines keep shutting.
A total of 50 magazines with at least a quarterly publication frequency closed last year, despite 134 titles being launched, leaving the number of magazines last year at 7,176. The number of magazines has been a bit up and down over the last decade, but on the whole, down, as there are 207 fewer than in 2008.
Overall, there are very few major magazine brands managing to pull strong through the digital shift. Of the 114 magazine brands tracked by AMM, 56 titles, or 50 percent, have a total audience in decline year-to-date. Print and digital editions are faring even worse, with 74 titles, or 64 percent of magazines, seeing audience on the decline.
Little wonder advertisers are looking elsewhere.
Apropos, a heads up for PETITION readers: you can give the media business a whirl if you masochistically desire. On August 27, the chapter 7 trustee in the case of Interview Inc., the once-famous magazine owned by Peter Brant, is conducting an auction for the sale of the media property. If bankrupted magazines aren’t your jam, there are plenty of other options available — including, most recently, New York Magazine.
Given the decline in advertising, media companies are re-evaluating their business models and many are toggling over to subscriptions. Subscriptions are the “it” thing now. And that obviously includes PETITION (though, to be accurate, we were never dependent on ads). In fact, we now subscribe to so many different resources that our costs are going up meaningfully from month to month. That’s the truth. At a certain point, consumers may get subscription fatigue.
Subscriptions are a great way to draw a steady stream of revenue from readers — unless readers share their login credentials with everyone they know.
As publishers try to grow subscription businesses, they have to figure out how to handle password-sharing, a phenomenon that subscription services like Netflix and Spotify have wrestled with for years.
Netflix and Spotify can absorb this danger. But smaller media outlets either struggling to survive or looking to grow don’t have that luxury. Every time someone shares media that lives off of the subscription model, he/she is effectively siphoning off revenue from them and pushing them one step closer to insolvency. Sadly, only a very select few of you will make fees in that scenario. The rest of you will lose out on quality content you’ve come to love and enjoy. Now wouldn’t that be a shame?