By Jeff Bercovici

    
    Another January has come and gone, and, with it, another chance for publishers to jack up the ad rates. Buyers of print media say the major publishing houses routinely seek a yearly increase in the 5 to 8 percent range but will try for more if they think they can get it.
     But even those who’ve been modest in their demands may find it harder than usual getting their rate increases to stick this year.
    Ad inventory, a commodity much in demand for the last few years, is suddenly less so as advertisers take a breather and wait to see where the economy is headed.
   People on both the magazine side and the media buying side are quick to deny there’s a crisis, but it’s clear the magazine industry has entered a lull of unknown duration.
   "There has been a slowdown, but I would by no means call it an atypical slowdown," says Harlan Schwarz, senior vice president of print services at Universal McCann in New York. "We are spending more cautiously, but I wouldn’t use the word ‘dramatic.’"
   "Some of our clients have been cautious and are pushing back print spending but not eliminating it," agrees Anita Peterson, director of magazine strategy at DDB Worldwide Optimum Media.
    If ever there was a year when publishers would like to impose bigger than usual rate hikes, this is it. 
    The magazine industry faces a double whammy this year in the form of a 9.9 percent jump in the postal rate for periodicals and a single-digit increase in the price of paper—traditionally publishers’ two biggest costs.
   Passing those higher costs along to the consumer directly in the form of increased cover prices will be tough, given a crackdown by distributors that favors titles with high newsstand sell-through. 
    Ditto for raising subscription rates, as direct mail solicitation becomes ever more costly and ineffective.
     Fobbing it off on advertisers seems the way to go, then. But with the dot.com boom over and the economy in limbo, few publishers have had the confidence to ask for larger than normal hikes. 
   Magazines at Conde Nast, Hearst and other major publishers are for the most part keeping their increases in the mid- to high-single digits, say media buyers, while Gruner & Jahr has imposed an across-the-board 5 percent rate hike, according to a source at the company.
    For print buyers, the slackening in pace is a mixed blessing. Offsetting the decline in bookings is increased clout in negotiations with publishers.
     "It gives us great leverage. We’ve been able to get great premium positions," says DDB Worldwide’s Peterson.
    "Books that are just coming out that initially said they wouldn’t negotiate rates are changing their tunes."
    "The print buying side has more leverage," confirms Carol Pais, a print buyer at Fallon McElligott in Minneapolis. 
   "Publishers are scrambling after the loss of the dot.com ad revenue," says Pais, who calls the rate increases she’s seen so far this year "a little on the high side."
     Most buyers say advertisers are not necessarily trimming their print budgets, but in many cases they are holding back on making decisions until later in the year.
      "Everyone is looking for one bold move," says Valerie Muller, director of print services at Mediacom. 
    "Whether positive or negative in terms of ad buying, it doesn't matter. Everyone is looking for that first big step by someone."

-Jeff Bercovici is a staff writer for Media Life

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