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Money's Kathy Kayse on the coming ad recovery
By Jeff Bercovici
The year 2001 was a rough one for personal finance magazines. As ad pages in the category dove earthward, two major finance titles, Individual Investor and Your Money, closed their doors, along with others, such as Consumer’s Digest and Offspring, that covered the area less centrally. Time Inc.’s Money, though not immune to the ad slowdown, experienced change of a gentler sort when Kathleen Kayse was named publisher in October. Kayse, formerly of Fortune Small Business, spoke recently with Media Life about the turmoil in the category, the prospect of an economic recovery, and the difficulty of keeping readers during a bear market.
How much harder is it to acquire and keep readers during a recession, when interest in investing is down?
Here’s my philosophy on the whole thing: Following the year we had in 2000, I think it’s very difficult to keep anyone’s attention, particularly in a recessionary period when everyone was so used to making all this money.
No one wants to look at their finances. So, absolutely, why would anyone want to take a look at the magazine, last year in particular.
But my argument back is that I think people need the magazine and the personal finance magazines more than any other magazines today because people realize that this isn’t the bull market we had two years ago, which was a once-in-a-lifetime occasion.
Now we have to take our finances more seriously. So I think it’s a great opportunity for us as we move into 2002.
What’s your outlook like for advertising this year? When will we see personal finance advertising come back?
I think everyone was in a pause mode at the end of the year and everyone had a wait-and-see attitude.
I think we’re going to start seeing more activity beginning in the second quarter--say the end of the second quarter.
I think the financial community will start reading its own press and the research that’s coming out that says there’s more need today than there’s ever been before for financial information.
The marketers, particularly the Fidelities of the world, the brand leaders, if you will, within their industries will be coming forward and starting to reinforce their brands in the market. At least I’m hopeful. No one can predict the future right now.
In his conference call last week with AOL Time Warner investors, Richard Parsons said that the company’s new financial forecasts for 2002 were based on an expectation of no recovery in the advertising market this year.
Right. And I think AOL Time Warner in particular learned its lesson last year, so I think we’re much better served by being conservative.
First quarter right now is not a good quarter for any of the magazines.
I shouldn’t say that in such broad strokes, but we’re all a little behind where we thought we’d be at this time. I don’t see that trend continuing. I’m projecting that we’ll get back to business second, third, fourth quarter and meet our expectations.
Do you expect further contraction in the category of personal finance magazines, or do you think the shakeout ran its course last year, when Individual Investor and Your Money folded?
I think there’s more to come.
I definitely think there is, and I wouldn’t even know where to go, but I think this year, based on what I’m seeing going on in the marketplace, there are a lot of desperation plays for business, and when you see that mode, particularly with brands that I wouldn’t expect it from, in categories of business I wouldn’t expect it from, it says to me that there’s so much pressure to find any dollars right now.
So I think we’ll see one more year of contraction.
There’s been a massive proliferation of personal finance guidance in the last few years, on cable, on the internet, in newspapers and even in general interest magazines. Has that diminished the importance that personal finance magazines hold for the consumer?
I look at it as an opportunity.
It’s saying that there is a lot of interest in personal finance. Yes, you can get tidbits of information, just as you can get tidbits of information about sports in Time magazine.
But if I really take my sports seriously I will go to a source that gives me much more depth of information about sports. As for the opportunity I see for us, for example, Jean Chatzky is doing a column on a somewhat regular basis for Time magazine.
For me, she’s basically creating the appetizer for someone to say, "Oh, I really like Jean Chatzky, I like her point of view. She works for Money magazine. You know what, I should be looking at Money to get much more in-depth information." So the more magazines that are talking about personal finance, the more people I think will say, you know what, I’m not getting enough, I need to get more information.
January 14, 2002 © 2002 Media Life
-Jeff Bercovici is a staff writer for Media Life.
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