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Is Magazine Advertising Killing Itself?

Posted on Saturday, December 30, 2017 at 1:34 PM

It's time to stop annoying audiences with bothersome ads, smarten up our business strategies, and boost our overall level of competence.

By William Dunkerley

There's no shortage of evidence that magazine ad sales are declining. In July 2017, MediaPost reported that magazine ad sales are down 16 percent. Other sources peg it at a somewhat lower number. But the trend line is unmistakable.

And for the future? PricewaterhouseCoopers forecasts that the market share for both consumer and trade magazines will remain static through 2021. We see the largest area of growth in internet advertising.

On top of that appearance of a declining magazine ad market, we are faced with an increase in the number of magazines. Statista reports there were 5,340 US magazines in 2002, but by 2016 that number had increased to 7,216.

So not only is there a decline in ad spending on magazines, but the dwindling supply of ad revenue is being shared by an increased number of magazines.

Gloom and Doom?

The above stats may seem to paint an ominous picture. The indicators are not good. A lot of publishers are either discouraged and resigned to a bad fate or flailing around frantically for a solution that is not yet in sight.

However, I'd like to explain why there is reason for great hope. I see three principal reasons:

--Trend statistics are being misinterpreted. The situation may not be as bad as many are led to believe.

--Many individual publishers are and have been operating below an optimal level of performance. There's room for improvement.

--Our industry as a whole is gravitating toward solutions that compromise our future prospects. That course can be changed.

Misinterpreting Statistics

Many of the growth statistics we see deal with market share. That tends to put magazine advertising in a worse light than is necessary. Overall the US ad market is growing. That means even if we had been able to hold our own in dollar volume, our market share still would be in decline.

Another factor is that forms of advertising that never existed before are now attracting ad money. The mobile segment is the best example.

Consider this hypothetical scenario: You're on a road trip, driving along an interstate highway, and you want to find a good place to stop for dinner. Do you grab a magazine from the backseat and look for a restaurant? Or do you press a few keys on a digital device and get all the helpful info you could ever want?

The vast superiority of digital advertising here speaks for itself. Much of the ad money that's going to mobile isn't anything you're realistically in competition for -- even if you publish a digital edition. Yet this kind of mobile ad spending diminishes the market share of magazines.

Suboptimal Business Performance

It's hard to estimate how many publishers are functioning far below their potential. Based on my anecdotal experience, there are many. They are easiest to identify during difficult economic times. I've seen that as publishers have had to cope with a number of economic downturns in the past. In those times I get a lot of calls from publishers who don't know what's hit them. They are confident in the business performance level they've had. They blame the financial hole in which they've found themselves on external forces -- namely the economy.

In most cases, that is a misattribution. When I analyze these businesses, I usually find that their performance has been markedly suboptimal all along. But they didn't realize that. The results they were getting were adequate and they saw no reason to suspect anything was wrong.

By way of analogy, a car that is in need of a tune-up may be able to travel along on flat roads without a problem. But when tasked with driving up a mountainous road, it may sputter and stall. The same principle applies to a magazine's business performance; failure comes when the challenge is greater.

In our instant predicament it's not a national recession that is the problem. Now it's competition from new forms of advertising, the proliferation of multitudinous online publications, changing patterns in consumer consumption of information, and a somewhat frenetic approach that advertisers are taking as they try to sort out new strategies in today's ever-changing media and advertising milieu.

What's a publisher to do? The answer is to critically examine your business strategies and practices, as well as your ad staff competencies. Stop externalizing the blame for declining fortunes and look inward. This may not be easy, but it's essential.

Dysfunctional Industry Trends

If you take a cold, hard look at the directions that media advertising is taking, it's hard to fathom why anyone has pursued them. The prime offenders here are online pop-up ads and native advertising in print and digital.

I deliberately use the term "offenders" because consumers genuinely find them offensive. They consider them annoying. A MorningConsult.com survey reports that online pop-up ads garner a 72 percent unfavorable rating. For native ads it's 43 percent. The least unfavorable reactions come from print ads and billboards, 28 and 29 percent respectively. They are fundamentally unobtrusive and easily ignored if they aren't of interest or relevance to the reader.

The 28 percent unfavorability of print ads, while relatively low, needs some explaining. Certain kinds of publishers may be to blame for it being even that high. I'd bet that some of the unfavorability is a result of those publishers that don't tailor their ad content very well to the needs and interests of their readers.

Nonetheless, there is some controversy in the ad field over whether annoying audiences can actually produce a positive result. Something that's really annoying can certainly draw attention. And in some cases that may result in short-term sales.

But what about the long term?

We can derive some insight from past experience with two other sales modalities: telemarketing and email marketing.

There was a time when telemarketing was an up-and-coming format for sales. Eventually there came a time when the field seemed to be overshadowed by shortsighted marketers who poorly targeted their calls toward people who were not qualified prospects. That created a level of annoyance that eventually prompted legislation attempting to curb the practice. Unfortunately our legislators did a poor job of crafting laws to meet the demand. They didn't shut down all the fly-by-night callers, and instead made life more difficult for legitimate users of the technique.

Then there's email. The problem there can be summed up in one word: spam. Here too, fuming annoyance prompted legislation that also failed to sufficiently remediate the problem. And again it made things harder for legitimate users.

There are no pop-up laws yet. But there are plenty of ad blockers around. And Google Chrome will introduce new blocking features on February 15, 2018. According to TechCrunch.com, "This won't block all ads on all websites -- instead, it'll stop those that are deemed overly annoying or intrusive."

Who's to judge what's annoying? That will be done by the Coalition for Better Ads acting in response to consumer feedback. Pop-ups, autoplay video/audio, and large sticky ads will be likely targets.

One hitch in the plan is that coalition membership includes big players in online advertising: Google and Facebook. Cynics point out that the coalition might just turn out to be a way for those giants to disadvantage other ad companies and brokers.

This scheme also leaves hanging the matter of native advertising. Despite its unpopularity, will it slip in under the radar?

Are Publishers Sapping Their Own Strength?

Two of the greatest assets a magazine publisher has are its reputation for integrity and its dedication to the consumer. If not for these factors, what differentiates content that emanates from the advertiser itself versus content found in a magazine? Consumer trust is central to the strength of any magazine.

More than ever before, advertisers are publishing textual content themselves. Magazines no longer have that role locked up for themselves. Why would a consumer choose content from a magazine over that provided directly by a seller?

Also, it used to be that advertisers needed magazines to aggregate audiences of qualified prospects. But now with the internet they can do that themselves too. They don't need magazines like they used to.

The old lines of demarcation have been diminished. What we're left with as discerning points are reader trust and loyalty. That's what will cause consumers to favor magazines over content generated by the sellers themselves. And if we annoy our audiences with native ads and pop-ups, we're going to lose those distinctions too.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

Add your comment.

Comment:

"Your discussion concerning today's advertising dilemma is excellent!!! I hope B2B publishers and editors who read the article pay attention. What stands out for me in particular is your observation that publishers are slow to shed long-standing editorial practices that no longer have merit. This especially applies in the case of how e-newsletters are treated. At a time when -- as you point out -- competition has multiplied, publishers have not made sufficient effort to boost the amount of original content provided. Instead, many editors still rely on reproducing press announcements as a convenient way of filling editorial space. Another point of interest was the study you cited indicating that native advertising often fails to engage readers. This observation clearly opposes native ad supporters claiming that this media format continues to grow by leaps and bounds." --Howard Rauch, president, Editorial Solutions, Inc.

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