The heady adspend days of last year are over. It was only a few
months ago that Asia's publishers were popping the corks on a bumper
year.
Revenues on regional print titles were up by as much as 50 per cent in
some cases and ad directors were licking their lips as the cash rolled
in.
But, fuelled as it was by the free-wheeling, free-spending internet
boom, it was all bound to unravel sooner or later.
Telecoms, IT, banking and finance were the darling categories of the new
millennium. But when technology stocks came crashing down, venture
capital dried up, and dotcoms closed down, spends retracted across the
board.
All media had benefited, and all media has suffered - not just
print.
"Outdoor was a favourite in some markets," says CIA International Asia
general manager Tess Caven. "We worked out that at the height of the
madness, nearly 50 per cent of bus advertising in Singapore was taken up
by dotcoms."
Towards the end of 2000, media owners had begun to look over their
shoulders.
And their fears have been realised. In contrast to 2000, when research
company CMR's ad revenue figures showed Time Asia up by 31 per cent from
US$49 to 65 million, and Newsweek Asia up 34 per cent from
US$33 to 44 million, first-quarter figures for this year show
that total advertising revenue in Asia has increased by just three per
cent - with Time Asia showing 0.9 per cent year-to-date growth and
Newsweek Asia one per cent.
As well as technology, telecoms and finance, other categories like
travel and consumer electronics are down, says Caven: "Overall, I think
that a lot of clients are holding back and spending on a piece-meal
basis."
No category is spending heavily. It is not that they don't have the
budget, more that they're waiting to see what the US economy will do
before they start spending.
There is always hope in an economic downturn that companies will use the
opportunity of discounted rates to build their brands. More often,
advertisers focus on specific local markets in an attempt to concentrate
on territories where they feel they can get most value for their
advertising dollars.
"There is a tendency for clients to retract their spend back to local
market advertising in tough times, because pan-regional advertising is
less quantifiable results-wise, and an easy thing for country managers
to take pot-shots at," says Caven.
"If media owners are in a position to split their feeds or localise,
they can at least chase local dollars as well as regional."
She adds that clients are increasingly looking for local-language
options too, particularly in less English-friendly markets like Taiwan,
Japan and Korea.
MindShare business director, Ralph Szeto, agrees that some clients are
moving away from regional media: "In Q1 and Q2, clients selected target
markets and local media, not pan-regional media. Regional is seen as
being for an elite group.
"Budgets are down because of the overall gloom, which has made clients
concentrate on individual markets. Driving sales is more important in a
downturn. Companies still want to build a brand but they don't want to
spend on it now."
According to CMR, the revenues of Asiaweek, which relaunched on May 11
as a technology and business lifestyle publication, rose by just 11 per
cent last year compared to 2000, and dipped 15 per cent in the first
quarter of this year. Its rival the Far Eastern Economic Review rose by
42 per cent in 2000, and a further 25 per cent in the first quarter.
Asiaweek's new look has attracted mixed reviews. "It is a big change,
and it's now much more differentiated from Time Asia," says Szeto. "It
is more Asia-focused and will interest our clients more. It's a good
direction to go in because it can attract both local and pan-regional
spends. The editorial is attractive, and in terms of flexibility it is a
split buy."
By contrast, another media director claims that the title had abandoned
its brand equity as a respected regional news magazine, and gone too far
down the "dotcom-Wired meets George meets Red Herring route".
He adds: "There was even an article in one issue about how to tie a
Windsor knot - how insulting to their existing upscale audience that
they have hitherto flouted so proudly."
However, Asiaweek associate publisher, Rick Gates, says he's confident
that the relaunch will contribute to meeting the magazine's year-end
targets, despite the economic climate.
"This is in response to changes in the Asian consumer. There is a whole
new group of entrepreneurial Asian consumers. These people are breaking
the mould. They are driven by technology and business, not
politics."
Other publications have tried to tap into the technology lifestyle
trend, but none as wholeheartedly as Asiaweek. "We are now more of a
technology and business read," says Gates. " We're different because
we're talking to Asians about Asian personalities and Asian trends."
Another title that has changed, albeit subtly, is The Economist. While
not making any radical editorial departure or deliberately aligning
itself more closely with Asian markets to attract split-buy spends, the
158-year-old title has, in its own conservative way, made a break with
the past.
"It has been so well implemented and accepted that it's hard to remember
what it was like before," says CIA's Caven. "It certainly makes it more
approachable for many new and existing readers."
The Economist still has ground to make up on competitors such as
BusinessWeek.
But its first-quarter figures are tentatively encouraging: a 0.7 per
cent fall in advertising, compared with BusinessWeek's 20 per cent
drop.
BusinessWeek has been hit by the fall in US technology and automotive
advertising. The title is trying to grow its non-traditional clients, in
areas like travel and finance, and introduce new sections, one-off
reports and incentives to book.
"We are trying to hold our rates, but flexibility is built in where
necessary," admits Business Week Asia managing director Alan Lammin.
"Currently we are 10 to 15 per cent down on 2000, and about the same
amount up on 1999."
Time Asia and Fortune are also looking at adding Asia pages. "The
slowdown hasn't hit Asia so badly, so we are making up shortfall through
Asian pages," says Time and Fortune president, Andrew Butcher. He adds
that the company is looking for new sources of revenue in China and
India.
Time Asia also publishes a trimmed insert, On, that focuses on
technology.
"It is developing as a reader franchise, and we are beginning to
increase it," Butcher says. "There is no question that technology will
be the driver of both business and lifestyle for the next quarter of a
century."
Newsweek Asia, like its rivals, is looking at its editorial product
closely.
This month, like last year, it is publishing a special edition dedicated
to what it calls "the key issues in Asia".
"It has been received well. It is very collectable and is one of the
ways we can grow our business," says Newsweek Asia advertising director
Teresa Yeung.
She added that with Asiaweek trying to reposition itself as a
technology-focused title, and Time going in the same direction, it had
strengthened Newsweek Asia's positioning as an international
magazine.
Yeung is cautiously optimistic about the future. "I don't think we'll be
seeing another 20 per cent year, but we shouldn't be seeing a fall - and
that's without revising my revenue targets," she says.
While the drop-off in revenue from internet companies has affected print
media, the internet is still around, and it's an increasingly powerful
competitor to print for ad dollars. In the context of a less-than-robust
regional economy, it's just one of the threats that makes the future of
pan-Asian print media an uncertain one.
"The year may be on-par, plus or minus five to 10 per cent, if the US
and Japanese economies don't belly-flop," says CIA's Caven. "If these go
and Europe wobbles, I think that budgets could be held back, and the
back-end of the year could be bad."
This might be unduly pessimistic, and what we're feeling now might just
be a necessary counter to the unsustainable, technology-fuelled growth
print titles experienced during 2000. Whatever happens, one thing's for
sure: it won't be as good as last year again for quite a while.
