MPA presentation

							Consumer Magazine Industry
Nina Link
President and Chief Executive Officer

Magazine Publishers of America

JP Morgan Advertising and Marketing Summit January 26, 2009

Consumers Turn to Magazines

Magazine Audience Growing
Print Magazine Readership

Magazine Print Readers 18+
Number of Readers (Millions) Index Average No. of Issues Read/Month Index

2004
178,723 100 9.1 100

2008
188,892 106 9.9 109

Source: MRI, Spring 2008; Base: U.S. Adults 18+

Magazine Audience Growing
Print Magazine Readership – Younger Readers
Magazine Print Readers 18-34
Number of Readers (Millions) Index Average No. of Issues Read/Month Index

1999
57,580 100 10.9 100

2008
60,093 104 11.5 106

Source: MRI, Spring 2008; Base: U.S. Adults 18+

Magazine Audience Growing
Online Users
MAGAZINE WEBSITES
Unique visitor
(in Millions)

Q3 2008 67.9 2.01 2.9 29.4

Q3 2007 66.1 1.76 2.5 26.4

CHANGE 2.6% 13.9% 14.3% 11.2%

Total minutes
(in Billions)

Total page views
(in Billions)

Average minutes per user per month

Source: Nielsen Online, 2008

Magazine Audience Measurement

Magazine Digital Initiatives
Year
2004 2005 2006 2007 2008

Consumer Magazines with Websites
Five-Year Trend

4,210 4,712 5,395 5,950 6,453

+53%

Source: Oxbridge Communications, 2008

Magazine Digital Initiatives
MAGAZINE DIGITAL INITIATIVES 2008 244 2007 207 Change +18%

User-Generated Content

Portal Partnerships

Incentive Programs

Source: MPA, 2008

Magazines 24/7

Keynote Presenters:
!

Avinash Kaushik, Analytics Evangelist, Google Domenic Venuto, SVP, Media and Entertainment, Razorfish Jeff Berman, EVP of Marketing and Content, MySpace

!

Google Chairman and CEO Eric Schmidt addresses magazine executives during the “Google Day” portion of the American Magazine Conference in 2008.

!

Media Advertising Share
U.S. Economic Crisis Hits All Media
ADVERTISING SHARE
(January through September)

Media TELEVISION MAGAZINES NEWSPAPERS U.S. INTERNET RADIO OUTDOOR
Source: TNS Media Intelligence, MPA 2008

2008 Share

2007 Share

Pt. Change

46.3% 17.3% 16.0% 8.3% 6.6% 2.7%

44.2% 18.0% 17.5% 7.7% 7.2% 2.7%

2.1 -0.7 -1.5 0.7 -0.6 0

Magazine Advertising
Economic Crisis Impacts Magazines
MAGAZINE AD REVENUE 2008: $23.7 BILLION " -7.8%
7,000,000,000 6,000,000,000 5,000,000,000 4,000,000,000 3,000,000,000 2,000,000,000 1,000,000,000 0

- 4.7% - 1.2%

- 13.8% - 8.8%

Q1 2008
Source: Publishers Information Bureau 2009

Q2 2008

Q3 2008

Q4 2008

Magazine Advertising
Economic Crisis Impacts Magazines
TOP 12 MAGAZINE AD CATEGORIES
AUTOMOTIVE DRUGS & REMEDIES HOME FURNISHINGS & SUPPLIES FINANCIAL, INSURANCE & REAL ESTATE TECHNOLOGY DIRECT RESPONSE APPAREL & ACCESSORIES TOILETRIES & COSMETICS MEDIA & ADVERTISING PUBLIC TRANSPORTATION, HOTELS & RESORTS FOOD & FOOD PRODUCTS RETAIL Source: Publishers Information Bureau 2009

PIB REVENUE 2008 vs. 2007
-20.5% -14.5% -11.5% -11% -9.7% -8.5% -6.5% -3.9% -2.1% -1.6% -1.2% -0.8%

Magazine Web Advertising
Opportunity for Growth
ONLINE AD REVENUE
As % of Overall Ad Revenues
(Estimated by Ad Age)

PUBLISHING COMPANY
MARTHA STEWART LIVING OMNIMEDIA TIME INC. HACHETTE FILIPACCHI MEDIA U.S. RODALE INC. MEREDITH PUBLISHING

12% 10% >10% 9% 7%

Source: Advertising Age 2009

U.S. Advertising Forecasts
“2009: Weakest Ad Market Since ‘01”
Advertising Age 12/04/08

! ! ! ! ! !

Barclays Capital: -10% Credit Suisse: -8% Jack Myers: -6.7% Publicis: -6.2% Zenith Optimedia: -5.7% Magna: -4.5%

Magazine Advertising

Magazine Strengths
! ! ! !

Grow Sales Most Cost-Efficient Drive Web Traffic and Search Build Buzz

Magazines Grow Sales
The Purchase Funnel:
a consumer’s purchase decision process

Ad Recall Brand Awareness Brand Familiarity Brand Imagery Purchase Intent

Magazines Grow Sales
Magazines Outperform TV and Online
7.0

Purchase Intent: Average % Increase vs. Control

5 4.6
Television Online Magazines

Online

Magazines

2

2

Dynamic Logic
32 Studies
Source: Dynamic Logic/Millward Brown, 2004–2007

TV

1.0

Marketing Evolution
20 Studies
Source: Marketing Evolution, 2004-2007

Magazines Grow Sales:
Packaged Goods and Auto
Magazines Outperform TV and Online
Purchase Intent: Average % Increase vs. Control
6.6 5
Television Online Magazines

3

Magazines

Online
2

3.5

Online

2.5

CPG Purchase Intent

Automotive Purchase Intent

Source: Marketing Evolution. 4 Automotive Cross-Media Accountability Studies, including Asian, U.S. & European nameplates, 2004-2007

Magazines

TV

TV

Magazines Are Efficient
Magazines Most Impact Per $1 Spent
Brand Familiarity: Indexed to TV
187

$2.61

$2.58

$1.40

100 101

100

99

Television Online Magazines

54

People Impacted Per $1,000
Source: Aggregate of 38 studies, Marketing Evolution, 2008

Cost Per Impact (CPI)

Magazines Are Efficient
Magazines Yield Lowest Cost Per Impact
Purchase Intent: Indexed to TV
145
$1.77 $2.61 $1.23

147

100 68

100 69

Television Online Magazines

People Impacted Per $1,000
Source: Aggregate of 38 studies, Marketing Evolution, 2008

Cost Per Impact (CPI)

Magazines Drive to Web
Initiate Online Searches
“What medium influences you to start a search for merchandise online?”
Rank Medium % Influenced By Medium

1
2 3 4 5 6 7 8 9 10

Magazines
TV/Broadcast Newspapers Face-to-Face Cable TV Radio Email Online Ads Online Communities Blogs

46%
42% 39% 36% 35% 30% 24% 24% 10% 9%

Source: BIGresearch Simultaneous Media Usage Survey, June 2008

Magazines Drive to Web
Initiate Online Searches – Digital Influencers

go online to find out more after first reading about something in a magazine or newspaper, or hearing something on TV or the radio

Source: MS&L, Fall 2008

Magazines Generate Buzz
Get Social Networkers Talking
Used Facebook or MySpace in the Last 30 Days
(Heavy Users – Indexed to General Population)

185

152 113 90 71

107

z ga a M

es in w Ne

r pe a sp

io ad R

on si vi le Te

t In

et rn e

O

r oo d ut

Top quintile of usage for each medium Source: MRI, Spring 2008

Magazines Generate Buzz
Get Influential Consumers Talking
# of Times Medium Ranks #1 or #2 Across 60 Ad Categories
51 45

19 16

2
io

0
ev is io n O ut do or rn et In te

in es

er

sp ap

M ag az

ew

R

ad

Top quintile of usage for each medium Source: MRI, Spring 2008

N

Te l

Circulation Overview
ABC AUDITED TITLES
FH08 Subscriptions Retail Total 307 million 44 million 351 million

2008 vs. 2007
FH07 302 million 46 million 348 million % Change +2% -6% +1% +/- Units +5 million -2 million +3 million

Source: Averages calculated by the MPA from Audit Bureau of Circulations statements for the first six months of 2008. Data set totaled 551 magazine titles, and only represents magazines that had filed as of July 2008.

Retail
AUDITED MAGAZINES
(ABC and BPA)

FH 2008
Dollar Sales Unit Sales $1.58 billion 423.7 million

% Change vs. FH 07
+1.2% -8.3%

FH 2008 Sales Efficiency FH 2007 Sales Efficiency

36.9% 38.4%

Source: Harrington Associates, 2008

Retail Bright Spots

THE OBAMA PHENOMENON

Retail Bright Spots
SPORTS COOKING TWEEN

+6.2%

+13.9%

+13.8%

+8.9%

+2.1%

Industry Retail Promotion
First-ever industry-wide newsstand promotion for magazines

magazine category sales up 8%

Subscriptions
ABC Paid Verified Total FH08 291 million 16 million 307 million FH07 288 million 13 million 301 million % Change +1% +17% +2% +/- Units +3 million +2 million +5 million

Source: Averages calculated by the MPA from Audit Bureau of Circulations statements for the first six months of 2008. Data set totaled 551 magazine titles, and only represents magazines that had filed as of July 2008.

Postal Issues
!

Postal Reform law passed late 2006 has led to price stability and manageability for magazines
# # #

Modest 2008 rate increase: 2.9% Savings: $300- $400 million per year Expected 2009 increase: 4% on average

!

MPA working to help USPS weather the economic recession
#

Pushing legislation for short-term relief from its health benefit obligations

Subscription Marketing Developments
!

Steady growth in Internet sold subs Launch of Maghound

!

Environment

Thank You

MAGAZINES

www.magazine.org