For magazines, 2006 was a puzzler. The year careened between great growth in ad pages, peaking at 4.3 percent for the month of August, and great declines, with a dip of 2.6 percent in November, and ended essentially even to last year. Meanwhile, as titles in the epicurean, fashion and women’s service categories showed strong growth, a rash of closures of once-hot titles in the men’s and teen categories left many wondering what would go next. That’s led to somewhat cautious forecasts for 2007 of growth of 5 percent in magazine ad spending, basically accounting for rate increases, and predictions of more magazine closures this year. In a recent Media Life poll, nearly half of respondents predicted that more publications would follow the lead of Teen People, Elle Girl, FHM and Shock and abandon print publications while continuing to maintain a web presence. Magazine consultant Marty Walker of Walker Communications, talks to Media Life about what to expect from magazines in 2007, which categories are headed for a shakeout, and why he isn’t shedding any tears over the demise of Cargo.

We saw a lot of ups and downs in ad pages in 2006, with part of that obviously due to auto spending. Would you characterize it as a good year or a bad year for magazines? Or neither? Why?
 
It was not a good year, but it wasn’t terrible. It was a flat year. In that sense, the last few years have been relatively flat for magazines. It’s not going back to the go-go years of growth-growth-growth year after year.

A lot of money is moving to the internet and coming out of print, No. 1.

In past years, magazines could do anything because they could always increase their ad rates and increase their pages. Now there are crowded newsstands, so what they are doing because of the economic crunch is reducing their rate base. And to some extent they have to do it in some proportion so that even with the same kind of pagination, you’re talking about less revenue. That’s affecting the ad picture considerably.

Time Inc. is cutting rates on Time and now they’re trying to sell audience the same way TV does. But that remains to be seen if it will be a trend the buying agencies sign off on.
 
Magazines are also being pushed more and more in this whole ROI game, and of course no one has figured out what a return on an investment means in advertising.

Some research companies are trying to run around and measure reader engagement, and magazines are doing research--we’ve done a few benchmark studies for clients that measure different attitudes--but it’s getting more and more expensive.
 

What did you see as the most important developments in magazines last year? Why?
 
The number that folded. I mean, it was a year when we saw some significant players drop out of the market, not the little guys.

There was FHM, you had Shock, you had Cargo go, you had Elle Girl, major brand names folding because they couldn’t make it. And you couldn't project how they could make it. Those magazines were particularly competitive with what people could do online, and they suffered the most.

No. 2, I would say the whole change in the [Audit Bureau of Circulation] rules. Thirdly, obviously, is the increased competition from the internet, certainly in the youth market.
 

As you mentioned, we saw several titles close, including two teen magazines and two men's titles. Are there any categories where you see a shakeout occurring this year?
 
I’m not sure. Maybe in technology, or product-related magazines. On the other hand, I tend to look at the ones that survive, and they are the ones where you really need the printed page to show the products, like fashion and beauty.

The news magazines will continue to struggle because people get news on the internet. The internet is now the No. 1 source for people looking for science info and news, and I would think the same thing is going on in health.
 

Which categories do you see doing the best in 2007?
 
Fashion and home furnishing, because you need pretty pictures, you want to see room settings, etc. I think the magazines that are in niche markets, like boating magazines, where they have a big passion for the activity, those will still do well because people absorb any kind of information they can get about their passion. So I think you’ll see more and more niche-type magazines than larger titles.

One thing that’s interesting is in the old days Detroit would never advertise in small magazines, but now they go into all kinds of small magazines because they realize that if you’re into certain kinds of things, you’ll be into certain types of cars.
 

Do you anticipate more launches than average or fewer in 2007? Why?
 
I don’t think you’re going to see any major million-circ launches this year. In other words, I don’t think that if the idea for Portfolio came up this year that Conde Nast would make the decision to fund a magazine that size.

But I do think you’ll see a lot of niche magazines and regional and city magazines. But I don’t think there will be any major magazines launching. You need to grow circulations to over 1 million over a period of time in order to be competitive.
 

Looking at predictions for magazine spending in 2007, would you say they've been optimistic or pessimistic? Why?
 
You know, the projections are under 5 percent, so that’s pretty much rate increase. If everyone raises the rates between 3-6 percent, chances are revenue will grow 4 percent with no growth, so to me that’s sort of flat.

There’s certainly been no change in rate negotiation. Magazines don’t get anything near their rate card rates. They’re lucky if they get 50-55 percent of their rates when all is said and done, though smaller magazines do better.
 

What are some new ideas that you'd like to see embraced in 2007?
 
You know one of the big problems magazines has is the way print advertising is bought. You have a creative agency, a planning agency and a buying agency. Then you have separate online agencies.

Very often they don’t talk to each other or don’t talk well enough to each other. Creative may have one idea when the buying agency has others, so I’d like to see more integration of the buying side.

Number two, in too many cases the agency side is at such a low level in the process. The media department will just look at numbers and have no sense of the differences between magazines. The young media planners are not magazine readers, they grew up on the internet and television.

You should be able to show two magazines targeting the same kind of reader with unique editorial, but media planners often just look at circulation, demographics. etc. I don’t know what can be done to overcome that, but it’s certainly an issue.
 

Which magazine do you think really stood out editorially last year?
 
I scan so many magazines, I don’t have a chance to really look at everything. New York did a great job in changing. 

The good thing is, I don’t think magazines dumbed themselves down, they still have a high standard.

I was kind of happy to see that the shopping magazines didn’t do so well. They've kind of plateaued. They’re not magazines, they’re catalogues.