Brand equity counts for recovering magazine industry
Many have predicted the death of the magazine industry, yet it has continued to defy the doomsayers. As a considered and personal purchase, periodicals retain a strong brand equity among consumers, says Pete Davis of media ideas hub getmemedia.com.
For the past 20 or so years since the desktop computer started making an appearance in publishing, the magazine industry has had the doom-sayers gathering round, predicting its ultimate death. Yet the industry always manages to pull through. Even with the wide-scale adoption of the internet in the late 90s, magazines stood firm.
Despite carrying on bullishly, the past two or three years indisputably have been tough ones for most magazine publishers, with advertising revenues coming down and new technologies and platforms challenging existing business models. But just when they thought it couldn’t get better, the industry is bouncing back again.
According to the latest PPA Publishing Futures survey more than 96% of 101 publishers surveyed expect profitability to increase over the next 12 months. This is supported by two positive industry trends: rising demand for consumer magazines and a year-on-year increase in advertising revenues. Despite forecasts predicting a further decline for consumer magazine advertising last year, the medium enjoyed revenue growth in three of the four quarters in 2010, according to AA/WARC advertising figures.
With the growing importance of the internet as a media channel and the impact of mobile platforms – from the iPhone to the iPad and beyond – publishers still face complex decisions in terms of creating working business models for these technologies, with many looking to areas such as online and real-world events to drive new revenue streams.
However, to my mind one of the most important elements throughout the history of magazines and print is the power of the brand. If you look at newspaper brands, titles like The Times and the Guardian will remain a powerful symbol of trust and integrity for their readers whatever the platform. The same is true with magazines, whether you read Hello, FHM or the Economist. And it’s their brand equity I believe that has carried them through tough periods time and time again. Yes, many publishers have faced a challenge monetising, but we were quite happy to pay for quality printed content so I’d like to think we will pay for content in other formats.
For this reason, I believe the magazine industry has a healthy future. And as a media channel it still offers a powerful avenue for advertisers, with consumers still spending around £1.9bn on magazines each year, and magazines being read by 87% of the population. On top of this, magazine distribution was up 4.1% year on year for the second half of last year.
Even if print in some quarters is declining – and the dailies are being hit hardest – we still need to consume that information so we will find a way to make this work. Magazines are a considered and personal purchase, and one that is likely, for now, to hold its value for consumers, and therefore for advertisers.
Pete Davis is managing director of innovative media ideas hub getmemedia.com