After Condé Cull, Buyers Seek Publisher Transparency

With the shocking closure of Gourmet, do all magazines face fresh credibility issues? In the wake of Condé Nast’s decision to fold its elite food book along with three other titles after a McKinsey & Co. review, all magazines will get a harder look from some media buyers.“You’re going to scrutinize everything now,” said Steve Lanzano, chief operating officer, MPG. “It makes you think more about the company and what’s going on. It makes you think about magazines across the board.”To be sure, the ad market collapse has wiped out dozens of titles. Many of them were considered weaker players or redundant with others in their categories, and as such, their deaths came as little surprise. But the economy also has claimed a number of titles that were well-regarded and seemed to hold promise like Rodale’s BestLife, Time Inc.’s Cottage Living, Disney’s Wondertime and Condé Nast’s Domino. Gourmet’s closing “really makes me take a harder look” at all magazines, said Scott Daly, executive vp, executive media director, Dentsu America. “I just don’t believe anyone anymore.” Brenda White, senior vp, publishing activation director, Starcom USA, said she also would demand more detail about magazines’ underlying financial strength. “Some [closures] have come out of left field, if you will,” she said. “I think there’s going to be more intense conversation about the numbers behind everything. I think we’re going to have a little more transparency going forward.”White, like other buyers, heard of the closures from Condé Nast on Oct. 5 along with the rest of the world. “What we’ve learned over the past 12 to 18 months is that things change pretty quickly,” she said. “They need to keep buyers in the loop as far as what’s going on in their business. What I’ve said to Condé Nast is,‘We need to be given a heads-up before it breaks.’”Indeed, at week’s end, sales execs were still trying to assuage angry advertisers who had planned ad schedules in the now-defunct titles. The upheaval at Condé Nast, while notable for its scope, isn’t likely to be the last tremor in the industry. Earlier this month, National Geographic and TV Guide let go a handful of top executives. There are rumors about more cutbacks to come at Time Inc., which let go some 600 people last year. And whoever buys BusinessWeek may have to undertake dramatic cost-cutting measures to reduce its steep losses.An ode to fine cooking and living, the 978,037-circulation Gourmet was known for its sumptuous photography and decadence-inspiring editorial. Perhaps because of its longevity and credibility with readers, it also performed well from an ad effectiveness standpoint. Per Vista’s Print Effectiveness Rating Service, Gourmet readers were as likely or more than were readers of other food magazines to recall ads in the magazine, take action in response to them and view them more favorably after seeing their ad.Yet Gourmet depended heavily on luxury advertising, which has cratered like a bad soufflé this year. Through October, its ad pages had fallen 43 percent, per the Mediaweek Monitor. Condé Nast decided to place its bets on its broader-based, 1.4-million circ Bon Appétit, perhaps seeing it as a better bet to compete with up-and-coming food magazine stars like Every Day With Rachael Ray and Food Network Magazine.Other buyers said Gourmet’s closing shouldn’t come as a shock and that it was unrealistic to expect publishers to be franker about their magazines’ financial health.“Unless you’ve been living under a rock or are in media-lockdown mode, these things have been rumored for months,” quipped one buyer, who declined to speak for attribution. Demanding more financial disclosure is a “nice thing to say to clients to make yourself seem like a big hammer in negotiations, but [I] don’t know in practice how realistic that is,” the buyer added.“I think most enlightened people in our business have been separating the strong ones from weak ones,” said Peter Gardiner, partner, chief media officer, Deutsch. “Gourmet folding freaks everyone out because it was a much-loved magazine. But in the days of Food Network and Rachael Ray, it’s hard to invest the kind of money Condé Nast invested to keep a product as rich and sensual and well thought of as Gourmet.”Gourmet aside, magazines still face an upward battle to win over advertisers in a time of skimpy ad budgets. (See feature story on page 10 on how some titles are broadening their business models to draw more revenue.) Circulation has been getting a harder look with buyers and planners questioning rate bases and unpaid sources like verified subs. They’re also demanding data issue-specific ad measurement services from Mediamark Research & Intelligence and Affinity Research that promise near real-time magazine measurement.At the same time, marketers’ interest in print is waning as they look to embrace new ways of reaching consumers. Witness Procter & Gamble, which, as part of an effort to get closer to shoppers, rolled out Rouge, a pocket-sized promotional booklet that’s thinly veiled as a health and beauty magazine.“It’s a more fundamental change that’s occurring,” Gardiner said. “Magazines as a discussion topic have fallen way down the list. It’s social, search, mobile.”Gardiner predicted Gourmet’s closing also will accelerate other magazines’ digital developments. “There’s huge value” in magazines, he said. “It’s a question of how you port that to the Web and other platforms.”

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After Condé Cull, Buyers Seek Publisher Transparency

Lucia Moses

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