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Why Magazine Publishers Are Set To Make A Comeback

2010 January 5

Beyond the headlines and hype, there is nothing intrinsically wrong with the magazine business and most likely stage a strong comeback.

While no one can predict the future, the most likely scenario going forward is very positive for print periodicals (although not for dailies). Moreover, any problems magazines might have won’t be due to any digital threat. Whatever the future holds, publishers hold their destiny in their own hands. Any failures will be their own.

While I realize that this view runs counter to conventional wisdom, it is in line with both the fundamentals of the business and the data trends.

Why Advertisers Buy Magazines

While every advertiser and every campaign is different, it’s safe to say that most spending in magazines is due to a mixture of four factors:

Price: While efficiency varies depending on the market, in developed countries such as the US and the UK magazines are roughly 1/3 the price of TV on a CPP basis.  Because magazines publishers evaluate their product in a very unfavorable way, they often don’t realize this.  However, media planners do (even if they don’t let publishers in on the secret).

Audience: Magazines offer a discrete audience.  There is no other media where you can be so sure of whom you’re reaching and why.  This is especially true in the US where local broadcast markets dominate and national buys are difficult to implement.

Context: Publishers still insist on calling this “environment,” but the principle works the same in print as it does on Google.  Relevant ads tend to be more effective.

Shelf Life: Magazine ads don’t whizz by.  In fact, they stick around for a while.  This makes magazines attractive to advertisers with long product cycles, such as durable goods, financial advertising and luxury products.

Magazines and the Business Cycle

Magazines work best as a brand building medium, rather than a “call to action.” That makes them more sensitive to the business cycle than other media.  Two factors contribute to make the magazine business enormously sensitive to business cycles.

Inventory Overhang: In a recession, manufacturers are usually caught with excess inventory.  They naturally are more concerned with emptying their overflowing warehouses than they are with building brands.  Furthermore, because new product launches are curtailed, there isn’t much need to communicate advantages of new products.

When businesses are drowning in their own inventory, they tend to favor sales promotions over the brand advertising that magazines excel.  As I wrote before, brands will become even more important in the digital age, so magazines will have an important role to play.

Consumers delay purchases: When economic times are uncertain, consumers will be more cautious with big investments (frugality is limited with consumer staples and services).

If someone usually buys a car every three years and starts to worry about financial security, the first thing that they’ll do is put off that purchase for another year.  It’s easier to delay a long term purchase than to go without everyday needs.

Since magazines rely heavily on durable goods, financial services and luxury goods, they get hit harder than other media.  It’s a bit worse this time around, because the recession is longer, deeper and had its origins in the financial sector.

Eventually, companies run out of inventory and need to fill the pipeline with new products.  At the same time, people can only hold off on purchases for so long.  Pent up demand combines with regular purchases to create a bounce in consumer activity.   Advertising comes back and nobody benefits more than magazines.

A Quick Look at the Data

It’s important to mention that the details differ by market.  However, it’s been my experience that the same narrative described above holds in most, if not all countries. .


First, it should be said that 1999 is most likely an anomaly due to a change in methodology.  However, discounting that, the data fits the business cycle story very well.  Magazines fell further and faster than other media in the last recession.  They also took longer to recover.  When the economy came back, magazines bounced and had strong growth for most of the decade.

This time around it looks like the same story.  Magazines did worse than the general market in 2008 and, although I don’t have the data for 2009 yet, it’s clear that it was a disaster.  Moreover, things probably won’t be much better in 2010 as magazines take longer to rebound.

For 2011 and beyond though, things look pretty good.  It’s important to remember that since the web emerged in 1996, magazine ad revenues have increased, even discounting 1999.  Even when you look at magazines as a share of the total market, the business has been stable, if not gaining ground, since the dawn of the internet.

The past is no guarantee of the future and it’s quite possible that for some reason it will all be different this time around..  Still, there is no real evidence not to be optimistic about the future of the industry.

Durable goods, especially cars, have been selling at below replacement rates for much of the past two years.  That’s unsustainable.  Moreover, as many have pointed out, some weaker magazines have closed during the crises.  The survivors will probably get an even bigger bounce than usual.

The Overhyped Digital Threat

Many people think that magazines will be overrun by the digital media.  In actuality, Digital media doesn’t pose much of a threat to magazines (although it does to newspapers).  While advertisers look to magazines for brand building, digital media is primarily a direct response vehicle (as are newspapers).  That could change, but it doesn’t show any sign of happening soon.

Of course, at some point, maybe people will lose their taste for paper but, as John Maynard Keynes famously quipped, “In the long term, we’re all dead.”  For the moment, consumers seem more than happy to cut down millions of acres of rain forest each year for their reading pleasure.

If anything, the digital arena is a great opportunity for magazines.  Duplication rates for sites co-branded with magazines are usually below 50%, so the web is a great chance to generate new audience and revenue streams.  Magazine web sites, with influential commentary (i.e The Atlantic) are actively linked to and tweeted.  Moreover, some publishers (i.e. Conde Nast, Time Inc, etc.) are starting to show genuine web savvy.  In a growing magazine market, digital revenues are all gravy.

Magazines hold their fate in their own hands.  The greatest peril lies not from a “great digital threat” lurking in the shadows, but from missed opportunity.  It’s time magazine publishers stopped whining and started building new skills.

btw. pls RT thx:-)

– Greg

38 Responses leave one →
  1. January 5, 2010

    “While advertisers look to magazines for brand building, digital media is primarily a direct response vehicle” …I respectfully disagree with you here. Digital media plays (or can play) a huge role in brand building. Just depends on how it is used. As someone who founded and launched a tiny startup children’s footwear brand, I saw this first hand in the case of my company. We had no budget to pay for much magazine (or digital) advertising, so I turned to the internet to build brand awareness mainly through blog marketing. It was free and although it was a slow process, over the course about six months I saw significant traffic and growth coming directly from posts about the brand, as well as the word of mouth phenomenon spreading the word about the brand. Google rankings increased incrementally with each online exposure.

    Although “brand awareness” is something that is difficult to measure, I saw little return from the traditional advertising that we did do. I think a lot of it depends on your target market and your particular business model and product. Obviously some businesses and markets would have greater success with magazine ads than digital outreach, but my view is to always diversify your marketing and advertising plan, but know where to put more weight for your particular business to reach your particular customers.

  2. January 5, 2010


    I don’t completely disagree with you in theory, but in practice, that’s where most of the digital money goes. So while there might be great potential for brand building in Digital, it doesn’t affect spending very much.

    – Greg

  3. January 5, 2010

    Hi Greg

    Having spent 20 years in the magazine industry, leaving it just 2 years ago I hope you are right about the future. Though personally I feel the industry needs to be more proactive and innovative it how it responds to the digital onslaught.


  4. January 5, 2010


    Great insight, love the data.

    I couldn’t agree with you more about this statement, “publishers hold their destiny in their own hands. Any failures will be their own.”

    I recently wrote a guest post at, Mark Schaefer’s Blog {Grow}, titled, Will Blogging Kill Trade Publications? In it, I draw the same conclusions as you have, it is up to the magazine publishers to cease the moment and evolve.


  5. Wayne Godfrey permalink
    January 5, 2010

    Some very interesting points and theories. I’ve been reading your posts for a few short weeks and I like your savvy and frank, practical approach to this business. Your statement “It’s time magazine publishers stopped whining and started building new skills.” is one I’ve been screaming for the last 15-plus-years… mostly on deaf ears. I do see some very serious problems to the optimism though. The first being single-copy sales (newsstands) which are diminishing daily and whose internal business structure is wrought with lawsuits, bankruptcies, conflicts of interests and declining distribution points. The loss of these revenues is chopping a leg off the publisher’s three-legged revenue stool (subs, advertising & newsstand). Distribution costs are through the roof as are production and paper costs. The generally held thought of these costs cleansing the market for survival of the fittest is now killing the fit as well, as revenue streams are diminishing across the board. Besides, if only the strong (re: big) survive, then our perspective is yet again, controlled by a few large corporations. Not exactly my idea of democracy in action or the promise of publishing.

    But the real problem I see for the future of magazines is a generation of non-magazine readers that is replacing the aging group of us, who were brought up with magazines. This generation is NOT magazine savvy, nor do they read for pleasure. I see it daily with my own children, on the streets, everywhere. Sit in an airport terminal and people watch. You can see immediately the age difference in who have their nose in a book, magazine or newspaper and who have it on a screen, be it a cell phone, netbook or laptop. Until we can bridge this gap, my feeling is that print’s heyday is long behind it.

    I’m not a defeatist, I do believe that magazines have life left, just not as traditional consumer vehicles. I also wonder if the advertising models that we’ve become accustomed to, has outlived its life-span. I’m rambling here, so I’ll cut it short and hope that we can talk some more.


  6. January 5, 2010


    You’re definitely right about the need for publishers to get more digital savvy. However, the truth is that digital media doesn’t affect the magazine business as much as you would think.

    – Greg

  7. January 5, 2010


    Thanks. Great post btw.

    – Greg

  8. January 5, 2010


    You make some very good points. Distribution has always been a money loser for magazines (especially subs) and at some point paper will become the “new fur,” but for the near to medium term, magazines look like a very viable business.

    Unfortunately, it has been such a good business that most publishers are hopelessly naive about the web. However, some really seem to be catching on and delivering some fantastic web products. So there is hope…

    – Greg

  9. January 5, 2010

    Hi Greg,
    I actually was discussing with family today about a blog post I had done on marketing to senior citizens. My wife’s grandfather is still an avid reader of newspapers (he’s over 90!). While I can see how his eyesight is not great anymore, (heck even i increase the font size on my web browser) it got me thinking how light weight e-readers with adjustable font sizes are such a blessing.

    About books and magazines, sure if i’m bored waiting for someone in a lobby I’ll pick up one, but people in the age group less than 40 these days rarely have time or desire to go thru a magazine, or book and prefer to have the i-podded audio version of the book or use devices from PSP to ebook readers , to even smart phone screens, for their fix of news and reading material.

    I see the complete benefit of an E-version of a magazine with zoomable font size for the audience that really still reads – The baby boomer gen as listed in this article:

    This is no doubt how vinyl got replaced with tape, then cd, and now mp3.

    Just my view on the subject. I do like the topics you bring up on Digital Tonto. It’s one of the better blogs out here!

    best Regards

    P.s here’s the article on marketing to senior citizens:

  10. January 5, 2010


    Great article. Thanks.

    I agree that in the long term the future is digital. However, what’s amazing is how much different the data is from the headlines.

    – Greg

    – Greg

  11. Wayne Godfrey permalink
    January 6, 2010

    A good friend and corporate VP of Kable News once cautioned me, “figures don’t lie, but liars figure.” I took that to heart and have lived by it ever since. I’m not disputing the data, only the perspective of the data. In my experience, digital has, at very least, fractured audiences and that has had a very negative effect on circulation. I found that out the hard way. Digital has also warped the mindset to “free content.” I remember talking to a coworker about the ramifications of the internet way back in 1995. Most of his predications have come to pass… but the one I shook my head at the most was the lousy business model of free content. I’m still shaking on that one, in more ways than one.


  12. January 6, 2010


    I understand your point, but it’s striking how poorly the conventional wisdom matches the data.

    Also, magazines are not free content. Free would actually be a step up. Publishers highly subsidize their distribution in order to attract ad dollars.

    – Greg

  13. Wayne Godfrey permalink
    January 6, 2010

    “Also, magazines are not free content. Free would actually be a step up. Publishers highly subsidize their distribution in order to attract ad dollars.”

    Not sure I understand your point here, would you mind expanding on it? You and I seem to be on similar planes of thought, but I’m not sure I’m reading you right…


  14. January 6, 2010


    Well if you sell a magazine at $1 and it costs you $4 to print and distribute, the you lose $3 for every issue you sell. Free with minimal distribution costs would actually be a step up.

    Besides, TV and radio have been on a free model from the start.

    – Greg

  15. Wayne Godfrey permalink
    January 6, 2010

    Okay, I see what you were driving at. I’ve done publications using both the free and paid distribution models. Having done so, I will agree that free is indeed a step up. BUT and to me this is a big one, I still have to pay for my content and/or images either through freelance contributors or by having a staff in-house. Those costs along with production, paper, distributions costs etc., etc., are decimating the few positive revenue streams available to publishers based on current business models…. digital or no digital. What I was saying earlier is that content isn’t free, not at a professional level, therefore it shouldn’t be distributed free either. I need to pay my content providers to keep them providing for my business AND for their livelihood.

    TV is reaping the benefits of cable subscribers, each of whom they get a chunk of change. They are also part of a large corporation that subsidizes through many other ventures including film and film library rentals, programming, etc. Plus they have the benefit of ad revenues on a local and national level. This is one of my main bitches with the internet as it is setup now, cable providers pay for content but ISPs do not. ISPs reap the benefits of other people’s creativity and work with little or no costs other than providing bandwidth. The telcos cry the bandwidth blues, but were paid huge amounts of money via taxation to lay the optical fiber networks that are basically laying dormant or were never laid at all, while we struggle bandwidth-wise through ancient cooper and twisted wire. Content is paid for via cable, but not paid for online. Nothing is free, not in this world…

    What’s radio?


  16. January 6, 2010


    I think cable is an anomaly. It’s a regulated industry so there are some economic rents that can be shared.

    At the end of the day, if there’s a shift in the supply curve, then there’s going to be a shift in the demand curve. With lower distribution costs, consumers will demand (and suppliers will be willing to supply) lower prices. At 0% marginal distribution costs, there’s a good case for free content.

    That doesn’t mean that paid models won’t work, but it does suggest that it’ll be harder to get people to pay.

    – Greg

  17. Wayne Godfrey permalink
    January 6, 2010

    So we become a truly “free” market society?


  18. January 6, 2010


    No, but the freemium model seems to be gaining traction and there will always be content that people will be willing to pay for. HBO, bloomberg and WSJ are all very good examples.

    I just don’t see how publishers can expect to go from a model where they’re subsidizing distribution to making distribution a profit center. If it’s content that already demands a premium, then it makes sense, but if not there’s very little chance that consumers will be willing to pay more instead of less.

    – Greg

  19. Wayne Godfrey permalink
    January 6, 2010

    Must be the arctic blast or the fact I’m deep in web coding, but I’m just not getting your point of subsidizing distribution. Are you referring to charging for a magazine copy or…? Does the freemium model rely solely on ad revenue for survival?

    Sorry if I’m dense here, but I’m not following your train of thought…


  20. January 6, 2010

    Publishers lose money on distribution. For instance, if GQ or Vogue charges $1 (85% of circulation is subscription so you can’t go by cover price), and it costs them $2 to print and distribute, then free distribution would be a win.

    The problem isn’t with free distribution, but that magazines don’t understand how the revue model works in electronic media.

    – Greg

  21. Wayne Godfrey permalink
    January 6, 2010

    “The problem isn’t with free distribution, but that magazines don’t understand how the revue model works in electronic media.”

    That’s the part I’m trying to understand, how does the model work in electronic media?

    Back when, our revenue streams were, in order, ad dollars, single copy sales (newsstand) and finally subs. To be honest, we lived too much on the newsstand numbers, but those numbers were an upfront payment based on performance, and gave some indication of how well the product was performing. Ad revenues were a 60-120 day post-payment and subs merely 1/12th of the money received. Now that model is at best a rickety three-legged stool for large publishers, only. Newsstand for small publishers is basically non-existent and without circ numbers, ad dollars won’t be flooding in… I still have to pay vendors (contributors, etc.) even in an electronic-only mode.


  22. January 7, 2010


    That’s a longer discussion, but I explain most of what you want to know here:

    – Greg

  23. Stuart Nicholson permalink
    January 7, 2010

    Hi Greg,

    I am not an expert on the business model of magazines, not having worked on the publisher side like you.However i see the future of magazines as being quite positive, in part.

    While the move away from the reading habit among the young and competition for share of pocket is affecting sales of magzines (cover price is competing with money spent on downloads, texting, mobile etc)it seems to me that the economicis on the cost side must, to a certain extent be easing.

    Years ago the costs involved in producing print titles were huge (print presses, unionised labour etc).However now, digitisation has made the process of producing a title a bit more cost-effective.

    It used to be the case that you had to ensure a substantial readership to offset high fixed costs.Now it is possible to appeal to a relatively niche group and still probably make the economics work in your favour.

    The overall trend away from mass-media vehicles is certainly affecting the large general titles that have dominated the sector in the past.However probaly the number of titles will continue to grow and their subject matter will become more and more specific.This has the added benefit of a very strong “engagement” sell for the publisher against a group of very committed readers.

    That is not to say that it isnt still going to be hard out there generating revenue.It is still going to difficult making money out of cover price, and obviously all media is affected by the drift to digital.While a lot of newspapers woes are caused by loss of classified ads and magazines dont tend to depend on this so much, there is now a resurgence in digital’s display product with the replacement of the old banner ads with more impactfukl formats , especially pre-roll vide.This is causing a lot of conservative advertisers who are more head-count than response focues to concentrate their minds on the opportunities for adding digital for its incremental reach potential rather than neccessarily being interested in clicks.

    Having said that, many successful magazines are brands in their own right and can migrate to whatever forms their consumers are using.This of course applies to brands originating on other media platforms too.I take the point about free content.This is becoming an issue.Eventually, if professional journalists find that they cant get paid adequately for their services, the better ones will do something else and also there will be a reduction in quality entry into the profession, affecting the standards of writing.
    Quality content will be at a premium asthere will be less .Ironically this probably will benefit the few vehicles where consumers are still willing to pay as they will be able to charge more as the alternative is less attractive.I do see this as an overall problem into the futuire though.As platforms increase there is a huge need for quality and cost effective content to fill the vast amount of white spece generated.Producing this content in the face of lower margins is one of the biggest challenges the industry faces.

    Sorry…this has meandered a bit as my train of thought has wandered, but perhaps this will prompt some debate.

  24. January 7, 2010


    Lots of good points (too many for me to comment on all of them). I think the one overarching theme is that magazines need to evolve their business model, but not because of a “digital threat,” but because any business that doesn’t rise to new challenges and opportunities won’t be competitive.

    – Greg

  25. January 7, 2010

    Interesting debate, but not sure I entirely agree with some of the sentiments. I will give you an example from here in the UK. Media Week was a weekly B2B magazine for the media planning, buying and advertising sales industry. It has just closed its print edition and now exists as part of a digital overarching site Media Week was a free publication, but it wasn’t financially viable?

    Why? because most of the advertising in this market comes from recruitment. Most recruitment advertising has migrated to the web, hence why it is still viable as a digital proposition.

    So sometimes even the ‘free’ model cannot help magazines survive.

  26. January 7, 2010


    It’s a very good point. Magazines that depend heavily on classified advertising are in the same lousy position newspapers are. The web is unparalleled as a direct response medium.

    However, publications that make their money on display advertising are in pretty good shape. Digital media doesn’t actually affect them that much. In actuality, one of the reasons that publishers have so much trouble making money on the web is that they fail to recognize the distinction and adapt.

    – Greg

  27. February 7, 2010


    A good article and a great set of comments. I actually disagree with your conclusions. Your data is historical but I don’t think a historical trend necessarily predicts the future. We all agree the newspaper industry has been hit by digital and you mention classified ad issue but I think the consumer moved to digital for news because of its immediacy. Now I think, there is something new about to happen (which has nothing to do with history). I would predict that those people that have moved to digital for news will now want to take the next step and move to mobile digital for news, that is e-Readers, tablets and mobile phones will become the new place to be. There’s also a better business model for publishers here because this content can be sold (well everyone is hoping it can). Now, if this prediction comes true and a certain Steve Jobs seems to think it will, then what next people will have been converted from paper to touch screen. It’s obvious to me they would then expect and the environmental in them expect to read magazines in the same place. The switch for news could take 1 to 2 years to have major effect; the switch for magazines though will happen in the same timescale.

  28. February 7, 2010


    You are right that the past is no guarantee of the future. But the fact that the current crises so closely follows the historical pattern should give one pause.

    Maybe the future will be different, but as for now, there is not any real evidence that it will be, despite what the headlines say. Whenever the zeitgeist is that much in conflict with the data, there’s money to be made. (btw. people still bank by phone).

    I also agree that the iPad might be a game changer. It has the potential to make the online magazine experience actually superior to the offline experience.

    – Greg

  29. February 13, 2010


    I admire contrarian viewpoints. They are rarer than they ought to be, especially when things are changing rapidly.

    The part of your thesis I struggle with is this. The costs of producing and distributing content have shrunk to essentially zero. And, the devices we consume content on continue to multiply.

    IMHO, the laws of supply and demand are kicking in hard and this will sharply devalue the pricing of all content.

    How do you think magazines can make a comeback in spite of being much more expensive content, delivered much slower than the internet?

    If you have a formula for this, I think every print publisher on Earth would like to talk with you 🙂

  30. February 13, 2010


    Because advertisers are willing to foot the bill. Magazines have been losing tons of money on distribution (in the US anyway) for a very long time.

    – Greg

  31. February 15, 2010

    Agree magazines have comfortably lost money on distribution for a very long time.

    But I’m not sure I can agree that “advertisers are willing to foot the bill” — at least not on the scale they once did.

    Even Condé Nast, owner of many of the most iconic, resilient magazine brands in history, faces a <a href=$1 Billion dollar ad decline.

    It’s rough out there.

  32. February 16, 2010


    I know it might seem like that from a certain point of view because that’s what the headlines say. However. from an insiders point of view (i.e. someone who actually runs media businesses) I can assure you it’s not the case.

    1. If Magazines are profitable, but lose money on distribution, then advertisers are willing to foot the bill.
    2. Magazine publishing is profitable (digital media isn’t as an industry).

    I can tell you from experience that it is much easier to make a print business profitable than an internet business.

    – Greg

  33. Jim Fox permalink
    February 16, 2010

    I am betting my future on digital and have for the last 10+ years I worked for two of the biggest print tech power houses in the 90’s Ziff Davis and IDG. Ziff is effectively history PC Magazine use to be 600 pages of ads an issue at $60k per page in the 90’s now it does not even publish in print. . IDG is still around but when I pick up Network World the magazine it looks like my neighborhood free paper published on a Mac. The last magazine I was involved with Handheld Computing went away as well, it was a long painful way down loosing client after client as sales director.

    Your points depend on the type of magazine. I would never work for tech in print again. Tech barely exists in print at all much tech writers are not free lance bloggers or doing something else.

    Fashion might have a chance because the visuals in a fashion magazine can not be recreated in digital at this point today. I still believe it’s a long slow decent for print. I had a conversation with a friend who was involved in fashion in the 90’s. Apparently even photographers are starving today. Print’s pinnacle was in the 70’s and 80’s maybe part of the 90s for all involved . It’s been down hill since and will continue sure their might be a slight up swings on the way down. However in a decade half print publications we see on the newsstand today will be gone or eBook only.


  34. February 16, 2010


    Very good points and I think you’re absolutely right. It really does depend on the sector.

    I didn’t hit on this point because I have neither the data nor the first hand experience to say for sure, but trade magazines and tech do seem to be problem areas. I would assume cars and any type of magazine that depends on product reviews will have trouble.

    However, for consumer magazines as a whole, it’s amazing how little the zeitgeist matches the data. I think the iPad will be a game changer as well. It actually has the potential to make the online experience superior to the offline experience.

    – Greg

  35. December 14, 2010

    I’m not convinced. I think a lot of companies are looking for alternative forms of advertising.

  36. December 14, 2010

    Thanks for sharing.

    – Greg

  37. December 28, 2010

    I still think that digital far outweighs some of the traditional print media.

  38. December 29, 2010

    As is your right:-)

    – Greg

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