US magazine market hardest hit by ad slump
By Carlos Grande , The Financial Times
The $24bn US magazine advertising market has been hardest hit by the slowdown which has also affected Japan and western europe, according to an industry report.
Magazine publishers must look to China, South Korea and other developing economies for sales growth as their traditional markets stagnate, the World Magazine Trends report says.
While circulation revenues - which make up the bulk of revenues for publishers in most markets except the US, Germany and Italy - have been stable, worldwide magazine advertising has slipped back to 1998-9 levels prior to the technology boom and the peak of the US bull market. The study predicts the industry will not see sustained growth until a general recovery in corporate profits, which is not widely anticipated before late 2003.
Even the dim prospect of an advertising return will be welcome in the US, where magazine companies are still coping with advertising falls of 10 per cent at consumer titles and 22 per cent in business publications last year.
It is estimated that US consumer magazine advertising spend fell from $17.7bn to $15.9bn in 2001 - the biggest drop since the Depression. European markets such as Germany, Italy and France - where magazines account for a much larger share of advertising budgets than almost any other country - saw less dramatic declines last year. In the UK, consumer magazine advertising grew by 2.1 per cent while spending in other media fell back. Partly in response to the slowdown, the main publishers in the US - including AOL Time Warner, the privately-owned Hearst Corporation, and Hachette Filipacchi Medias - continue to expand non-US interests either by acquisition or increasing foreign editions.
Though comparatively small, the Russian market saw magazine advertising revenues increase by an estimated 60 per cent from $100m to $160m in 2001.