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business magazines
Return of financial ads with surging stock market
By Jeff Bercovici
The last three years have been a terrible time for business and finance magazines, with the prolonged drought in financial services and technology advertising having put quite a few titles out of business and brought steep page declines to the survivors.
But publishers now say that such advertising is at last poised for a serious comeback beginning in the second half of this year.
For that, credit the recent surge in the stock market as well as more gradual improvement in the overall economy.
"The stock market has had a great year already, and the year is only half over," says Knight Kiplinger, editor in chief of Kiplinger's Personal Finance.
"We are hearing from some of our major accounts that they intend to beef up their marketing spending in the third and fourth quarter this year to take advantage of new investor interest in the stock market. The financial services advertisers who are sitting on the sidelines are at risk of losing market share to the companies that have maintained spending at a reasonable level."
"I think there is pent-up demand to get the brand message out there," agrees Geoff Dodge, vice president and associate publisher at BusinessWeek.
"A lot of them have been dark for a while. My gut tells me that companies playing that field would want to capitalize on rising consumer demand."
Although Wall Street has witnessed several false, short-lived bull markets over the past three years, the increasingly widely-held consensus is that this one is the real thing. The Dow is back over 9,000, the S&P 500 is up 13 percent since the start of the year and the Nasdaq has risen 23 percent.
Still, many brokerages and fund companies need a little more convincing, says Bill Holiber, publisher of U.S. News & World Report.
"I think what's going on now with financial advertisers is it's still wait and see if this market's going to sustain itself," says Holiber. "When they have confidence that there will be steady growth, I think they'll start to increase spending."
The real gains probably won't come until the fourth quarter, says Christopher Poleway, president of Time Inc.'s Fortune/Money Group, which includes Fortune, Money, Fortune Small Business and Business 2.0.
"We've heard some positive news from some of the big fund companies in terms of recent inflow of investors and investment dollars," says Poleway.
"I gotta figure that will translate into an uptick in financial services sometime around a September-October timeframe."
As for fears that the bull market will prove to be yet another mirage, Kiplinger, at least, says he’s not worried.
"Stock gains have gotten a little ahead of earnings growth, but corporate profits aren't going to go into reverse," says Kiplinger. "Stocks will continue to rise in fits and starts. I don't think we'll see the sharp run-up in the next six months that we did in the first five months, but likewise I don't think the stock market is going to give back these gains."
Meanwhile, he says, another encouraging trend is just beginning to show up: Capital spending, all but non-existent over the past three years, is on the rise. That's a function of business owners' increasing optimism as well as their need to replace worn-out office equipment and outdated technology.
As capital spending, encouraged by incentives in the new tax laws, rumbles back to life, so will advertising for business equipment from computers and photocopiers to light trucks, says Kiplinger.
It's only a matter of time before business and finance titles start to reap the benefits.
"A lot of advertisers don't want to get ahead of their market," he says. "They want firm evidence that people are in a spending mood before they roll out their more ambitious marketing."
June 23, 2003 © 2003 Media Life
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Jeff Bercovici is a staff writer for Media Life. Click
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