Newsweek: Condé Nast Mags Face $1 Billion Ad Decline
As Condé Nast continues working through its McKinsey &Co.-imposed cost cuts, a Newsweek analysis of the publisher’s ad revenue situation suggests the company’s looking at particularly brutal ad declines. The publisher, which this week killed off the nearly 70-year-old Gourmet and three other mags, could see ad revenues drop $1 billion by the end of ’09, Newsweek said after taking a close look at the past year’s Publisher Information Bureau data.
In the case of most magazines, judging its health by PIB’s ad revenue figures is generally considered flawed since the data is based on what’s stated on publisher’s public rate cards. Most are heavily discounted. But as Newsweek’s Johnnie L. Roberts points out, Condé’s doesn’t tend to deviate from those stated prices. That said, keep in mind the numbers aren’t precise either, as the publisher does have a number of large corporate advertisers, and the large buys earn volume discounts, sources tell paidContent.
So the tally of losses Condé’s roughly 20 titles experienced through August could be pretty close to the truth, as the publisher earned a collective $1.5 billion from ads during the first eight months of the year, compared to $2.1 billion for the same period in ’08:
Architectural Digest: down to $54 million from $102.4 million
Condé Nast Traveler off 42 percent to $62.1 million from $106.6 million
Wired declined 35 percent to $33.4 million from $51.8 million
Vanity Fair dropped 27 percent to $101.8 million from $138.8 million
Many analysts and observers do expect some pick up in ad spending during the holiday season. But since most advertising was locked in during the ’08 holiday publishing schedule, the difference won’t be very great. Meanwhile, the pressures on the the company’s magazine businesses will likely be under even more pressure, as S.I. Newhouse, the head of Condé’s parent, Advance Publications, has sunk wealth plunged to $4.5 billion from $8 billion, meaning that he’s unlikely to continue serving as the grand patron and supporter his publishers have counted on in past lean times.
Where's the link to the Newsweek research?
We left it out just so that you could make this comment :)… adding.
The Newsweek numbers are not even close to being right. The PIB figures do not take into account frequency discounts, Conde Nast network discounts, varying rates for ad sizes.
When I was at Financial World, we were PIB reporting for 12 years. The Conde Nast numbers are off by at least 30%, even if they do hold rate card
Their article is nearly useless and certainly misleading.
Hey Doug, I did note that CN does have a number of large corporate advertisers, and the large buys earn volume discounts, which aren't taken into a count. So while the numbers don't present a clear picture, they do serve as fairly good guidepost to make other assessments about the state of CN's predicament.
I don't have any issue with your article. What is an issue is that Newsweek said the was a "Web Exclusive" The
reported did not interview the people from PIB and publish their comments. He did not publish any estimates from any other media experts.
Johnnie took a PIB report and a calculator did some simple math, and acted as if he had come up with something special. Hardly "exclusive", if you call PIB on the phone
Duly noted, Doug, thanks again. I do think Newsweek went out of there way to make it sound as if they had some special PIB forecast, when all they did was spend an hour adding up columns.