Few magazines will win rate hikes

'This
marketplace is still a buyers' marketplace.
That's
not to say that some publishers aren't getting increases, but most are
not.'

Few magazines
will win rate hikes

Buyers retain clout: Unless you're hot you're not

By Jeff Bercovici

   Among the top media rituals of January are pondering the ultimate price Super Bowl ads will fetch and sniffing around to see the sorts of rate increases magazine publishers are asking for and getting -- or not getting.
   As with the Super Bowl, so it is with magazines. One side loses, and this year it is publishers. Few are expected to realize the increases they have been asking for, ranging from 4 percent to 9 percent for 2003.
The ad economy may be recovering, but magazines overall are lagging, and the negotiating clout is still very much on the side of buyers.
   Only a select minority of magazines will be able to command more than a marginal increase in real prices, say both buyers and sellers.
   Those are the more specialized titles, often with a base of endemic advertisers who came back year after year. Or they are the top titles within categories that are themselves doing well.
   For all others, they will be lucky to defend the page rates they saw last year. One publisher reports being told by buyers: No rate increases without an increase in your rate base. We're not paying more unless we get more.
   "In general, publishers have come out of the gun aggressively with announced rate increases across the board," says Cyndi April, director of print strategy for OMD. "The economy being what it's been, we're not paying all that."
   Peter Gardiner agrees.
   "This marketplace is still a buyers' marketplace," says Gardiner, who is vice president and director of media services for Deutsch. "That's not to say that some publishers aren't getting increases, but most are not."
   One problem faced by publishers is the extensive rate-slashing over the past two years, which makes it especially difficult to assume rate increases when the ad dollars return. Too many buyers remember you when you were giving your pages away.
   This is especially the case among the general interest titles.
   General interest magazines, traditional women's service titles, newsweeklies and business magazines are all expected to end up more or less flat with last year in rate negotiations.
   "If you look at it from a rate card standpoint, you’re seeing sort of a flat increase across all categories," says Steve Lerch, print media manager at Campbell Mithun Esty in Minneapolis. "But by the time it gets through negotiations there’s greater variation in who’s able to get it and who’s not."
   One publisher of a newsweekly says that, to a greater extent than in years past, print buyers are resisting rate increases by magazines that can’t demonstrate substantial circulation growth.
   Conversely, those that can stand a good chance of getting the increases they’re asking for, particularly if they belong to a category buyers see as being "hot."
    One category that's expected to do particularly well is newer women's service magazines such as O: The Oprah Magazine, Budget Living and Real Simple.
   Those magazines are decidedly in the minority, however. Even with the beginnings of a recovery, print continues to lag well behind broadcast, with forecasters expecting another strong network upfront this year.
   Unfortunately for publishers, demand in the broadcast market is not yet so high as to spill off into magazines.
   "TV is always a driving factor in this," says Lerch. "When TV raises their rates, that's when a lot of people start looking toward print."

-Jeff Bercovici is a staff writer for Media Life.

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