Our business environment is changing. Some publishers are coping better than others.

By William Dunkerley

"Covid-19 Represents the Biggest Challenge to Media Advertising Expenditures Ever" is the headline of an April 27 Forbes magazine article.

The article explains: "Advertising expenditures are being canceled, delayed, and in some limited cases increased, all in reaction to Covid-19 and the stay-at-home orders issued across most of the nation."

Prospects on the subscription side of our businesses may be different, however. Magazine publishing giant Meredith points out: "Given recent lifestyle changes, our content is particularly relevant now as more Americans are spending time at home and are demonstrating expanded interest in DIY, food and entertainment, as well as local news programming." The company is silent, however, about whatever financial benefits it may have reaped from those lifestyle changes.

But Meredith goes on: "At the same time, the Covid-19 crisis has created an extremely challenging business environment, including significant advertising campaign cancellations and delays. While our financial position is strong, given the impact on advertising -- which represents approximately half of our revenue mix -- we are proactively taking aggressive actions to strengthen our liquidity and enhance our financial flexibility in the near-term to effectively navigate the current environment.

"Those actions include pausing the company's common stock dividends, reductions in board of director fees and officer, executive and exempt employee salaries; and even tighter control over production costs and variable expenses."

According to ChiefMarketer.com, "Marketers are managing their expenses in this new coronavirus-impacted economy, and that has translated to a decline in advertising spend. The Interactive Advertising Bureau recently reported that 24 percent of brands paused their advertising spend for the first and second quarters of this year, and 46 percent are at least adjusting it. Overall, digital ad spend is down 33 percent and traditional media is down 39 percent."

A survey conducted by our sister publication, Editors Only, shows that the impact on advertising sales is highly dependent upon specific markets and also upon the resourcefulness of the respective publications.

A Tale of Two Magazines

With due respect to Dickens, the Covid-19 crisis won't allow us to say that "it was the best of times, it was the worst of times...." But we can contrast the reactions of two different magazine publishers as the best of responses and the worst of responses.

The prize for the best of responses goes to Scrap magazine, published by the Institute of Scrap Recycling Industries. The association was about to hold its annual convention and exposition, typically a highlight of the year. The editors had put together a special issue, 50 percent larger than a regular one. Substantial content pertained to the upcoming event. The advertising department had been hard at work, too. They brought in a good collection of ads, some timed to coincide with the upcoming event.

Then crisis hit. The association saw no alternative but to cancel the event in light of the Covid-19 pandemic.

That threw the magazine staff into crisis management mode. The editors removed from the upcoming issue all the convention-related content. Many of the ads had to go, too. The editors rewrote and re-edited whatever content was left that made reference to the convention. They added new content about the coronavirus and described resources the association would provide members to help them address the crisis.

In the end, the magazine staff produced a smaller issue, one with less advertising. That loss was mitigated, however, because the magazine will save money on printing and distribution.

That's one impressive effort in crisis management at deadline, I think.

In contrast, I offer the response of AAA World, published by the well-known automobile association. Its May–June issue is a theme issue on the topic of road trips.

Members received the issue at a time when in many, if not most, places nonessential travel was banned. Of course, it was reasonable to presume that the travel bans would be lifted at some point. But that would still leave travelers with a host of Covid-related precautions they would have to contend with on any trip. The road trip issue could have given prospective travelers some very useful advice in that regard.

But AAA World missed that opportunity to be helpful to readers.

Advertisers were disserved, too. They lost the opportunity to tell readers that their facilities and events would be compliant with required safety precautions, or to remove their ads if they weren't.

Instead, a message from the editor appears next to the table of contents. It says, "As we went to press, AAA members across the US were being told to stay home."

The message explains, "We made the decision to proceed with printing our planned road-trip issue with the vague hope that we might be able to travel by the time the magazine reaches your homes and the certain hope that in the not-too-distant future, we will all be packing up the family car and hitting the road."

I'm sure we all share that hope for the undefined "not-to-distant future." But practically no one could reasonably share the hope for that to be realized in mid-April when AAA World arrived in the hands of its readers.

In this case the publishers didn't even make an attempt at productive crisis management. They just printed a non-sequiturial excuse for doing nothing.

Turning Lemons into Lemonade

In future issues, STRAT will discuss new strategies that magazine publishers can use to cope with the still unfolding crisis and to prepare for life in its aftermath. Believe it or not, we can reasonably expect to see new opportunities on the horizon. We'll help you to identify them and exploit them to your advantage.

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

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