It's hard not to notice that new-economy magazines, which once arrived
inch-thick on office desks and newsstands, are rapidly shrinking in
size.
Publications like Wired, Red Herring and The Industry Standard, that
used to rival issues of Cosmopolitan and Vogue, now barely make it to a
hundred pages. Ad sales for magazines covering the dotcom sector have
plunged, with too many salespeople left trying to wring ad revenues out
of bleeding dotcoms and staggering technology companies. Layoffs that
were initially limited to internet and tech news websites have started
to spread to print publications.
As most publishers will admit, those internet magazines that relied
heavily on dotcom cash last year are having to raise ad rates, combine
issues, and search for new funding and partnerships. Some news
publications are claiming that their advertising base has broadened,
with placements from companies in the upscale-consumer and mainstream
sectors, as well as financial services.
One thing is certain: like the technology industry itself, the
technology magazine industry is coming off a phenomenal year. Consider
Business 2.0, which pulled in an astounding 328 ad pages for its May
issue last year.
The title's May 15 issue this year brought in only 40.16 ad pages - an
almost 88 per cent dive in ad sales.
The Industry Standard, which last year tripled its advertising revenue
and sold more ad pages than most other tech magazines in the industry,
increased its ad-page count by 139 per cent in the first 10 months of
2000, compared to the same period in 1999. The title, which took in 224
ad pages for its May 15 issue last year saw advertising drop to 29 pages
in its May 14 issue this year, representing an 87 per cent decline in
advertising.
Red Herring too made news as it announced the lay off of 54 workers, or
20 per cent of its staff, as it continued to dismantle an expansion plan
undertaken during last year's blitz in tech advertising. The firings
marked the third round of cutbacks made by the publication since the
third quarter of last year. Red Herring, along with other US titles,
went on a hiring spree when the size of some editions swelled to more
than 600 pages. It also switched from monthly to bi-weekly last year.
Although Red Herring was able to charge higher rates for advertising
space as it almost doubled its paid circulation to about 325,000, the
title's ad revenue fell for the first time in April this year, dropping
24 per cent from last year to USdollars 4.8 million.
That's not say US-based tech titles are the only ones suffering. Asian
internet titles are also feeling the pinch as competition heats up and
revenues fall. And there are signs of a chilling market everywhere.
Probably not the most auspicious time for Penton to launch its Internet
World title in Asia, then.
"I think it is quite important when you look at this market you also
distinguish between the internet industry, which is relatively small,
and the enterprise and corporate market, which includes the medium to
large enterprises," says Internet World publisher, Robert Ferguson.
It's not the dotcoms, but the mainstream corporate market that Internet
World is targeting. "The enterprise and corporate market is the number
one spend for any company at the moment. It's not IT any more, it's more
internet-related information that people want. This isn't just
e-business: it's the back-end logistics, e-procurement, it's all the
seamless integration and other issues which we feel at the moment no one
is really covering in great detail.
"If you ask anyone about the pre-eminent brand for internet magazines,
there's no ready answer. I think maybe if you look at the more IT side,
Computer World would come up. But, if you ask people what the
pre-eminent titles are for internet-related or e-business information,
it's going to be The Industry Standard, Red Herring, Business 2.0. Those
are not Asian publications, and their distribution here is limited to
around 500 to 1,000 copies in each market, which is quite small. There
is still room for a high-standard new-economy magazine here."
Many Asian titles are vying for that position. The advertisement
director of Singapore-based Intelligent Enterprise Asia (IEA), Caroline
Quek, claims that the publication has doubled advertising this year and
has already met its sales target for 2001, albeit the magazine was only
launched in March. "We started out during the period of e-business hype
when a lot of dotcoms were launching. At the same time there were also a
lot of news websites coming up. Our magazine is for CEOs and decision
makers. During our launch, circulation figures were 15,000 and after
fine-tuning, we now have a 14,500 circulation base, which at the moment
is mostly in Singapore.
"We believe the tech industry is still spending, so are other sector
such as banking and finance. The problem we had last year was that not
many people knew what the magazine was about. Now we have a readership
and our advertisers feel safer spending with us because we have proven
ourselves. But the shift for us has been from tech to business. The
other factor was that when we launched, many clients had already
committed their budgets for the year, which meant that we spent much of
last year building relationships."
Another magazine staking its claim to be the leading Asian internet
title is media's sister magazine Revolution. Publishing director Andy
Bridge says advertising support for the title has been encouraging since
its launch last year. "Obviously the recent downturn has had an effect,
but we never set ourselves up as a dotcom magazine or a pure technology
magazine.
We're a business and marketing title looking at new media, and whatever
the current fallout or readjustment, it's obvious new communications
platforms present new opportunities and new challenges for businesses in
general and marketers in particular." Bridge adds the magazine's
advertising was 20 per cent up on its targets at the end of last
year.
The region's internet titles are facing increased competition from
broader publications such as BusinessWeek and Asiaweek, which recently
re-invented itself as 'Red Herring meets Fortune meets Vanity Fair'. The
Time Inc-owned magazine launched with the new tagline 'Redefining
business'.
Ferguson adds that competition from business titles for tech-savvy
readers is likely to continue. "The general business books such as
BusinessWeek, Asiaweek, The Asian Wall Street Journal, Fortune and
Forbes make a very broad market for business-related news, but all of
them have just jumped on the internet bandwagon because the information
need for corporate executives is very great now. They have come out with
tech supplements that we are likely to see more of."
Newspapers are getting in on the act, too: the South China Morning Post
is extending its tech coverage from a weekly supplement to daily
coverage in its business section. And internet magazines also have to
compete with news websites and email newsletters.
AdXplorer CEO Antony Young comments: "Shame on anyone in the online
marketing business that doesn't choose the online publication ahead of
the printed version as their first read. The online titles generally
offer more up-to-date info, better interactivity through chat, and more
regular contact via newsletter services. And I can say from experience
that these get much better response from their advertising.
"What makes this magazine category tough is that they face competition
from the online players, which are of a high standard, and general
publications that are more heavily covering internet stories. Look at
the freshly re-launched Asiaweek - they see themselves talking to the
young, wired and rich. There is only room for probably one player in
this crowded space that can be financially supported with advertising.
The one left standing will likely be the one most committed to adding
insightful perspectives."
Some of the biggest victims of the dotcom gloom have undoubtedly been
content sites. The editor-in-chief, Asia of internet.com, Elaine Ee,
recently announced the site would "no longer publish individual
newsletters based on city or country sites in Asia".
Ferguson explains Internet World will not be making its content
available online in the near future. "If you look at the online
properties at the moment, they are having a tougher time than anybody.
Internet.com has closed its Hong Kong operation and I think the
information needs of internet industry executives are probably met by
what is out there at the moment, so until we can come up with something
more valuable, or a better offer, I don't think we're going to do
that."
With a circulation of 16,000, the first issue of Internet World is out
this month. Ferguson remains optimistic, but strikes an understandable
note of caution. "We will of course be struggling as well. It is a tough
time for a launch in the second quarter with tighter budgets. And I
think we will see a lot of consolidation in the market. There will be a
divide between those that are going to retrench, such as internet.com,
and more established titles that are going to make a real go of it."
