YEAR-END REVIEW: Global slump blows ill wind for print titles

It was a year of closures, downsizing and reduced ad pages for

Asia's print media players, buffeted by the twin disasters of a global

slowdown and the terrorist attacks on the US. But then, few expected to

match last year's outrageous performance after the bottom fell out of

the dotcom and telecom industries.

The closure of AOL Time Warner's weekly news and business title,

Asiaweek, following a high profile relaunch earlier this year, caps what

has been a tumultuous year for the region's print media.

Coming off the outrageously inflated 2000, few expected to match last

year's performance. Indeed, titles had expected to see earnings moderate

this year, but the terrorist attacks on the US jolted the world like

never before, resulting in adspend coming to a virtual standstill in the

weeks after September 11.

The demise of Asiaweek closely followed rumours about the magazine being

folded into its sister title, Time Asia. Only weeks prior to that, rival

publication Far Eastern Economic Review (FEER) - now hailed as the last

bastion of locally-produced English language weekly news in Asia - had

seen its editorial team merged with the Asian Wall Street Journal (AWSJ)

and 25 per cent of the combined staff laid off.

If magazines across the region had not implemented a hiring freeze prior

to September 11, they certainly did immediately afterwards.

The budget cuts and lay-offs have raised concerns over whether magazines

will be able to maintain the quality of editorial going forward, and to

continue to develop the editorial product, introduce new content

elements and supplements - items that are likely to attract advertisers.

The Economist's regional advertising manager Tim Pinnegar wonders if

certain titles are going to be able to maintain editorial quality in a

region where resources are already stretched. "A lot of companies have

been giving away free copies of their publications to push circulation.

But without subscription fees and now ad revenue, they are going to get

into trouble."

Media buyers voiced other concerns. "One of the issues we are going to

put a watch on is the combining of editorial departments," comments

CIA's general manager Tess Caven in Singapore. "We're a bit concerned

that this could potentially lead to a lack of variety in the stories

covered and points of view expressed."

Still, some magazines have managed to keep their editorial fresh,

despite the market downturn. The Economist introduced a quarterly

technology section at the end of last year and underwent a redesign in

May and then saw its circulation hit a million for the first time in

September; both the AWSJ and FEER had their own facelifts and redesigns

earlier in the year with the former also introducing a technology

section and the latter increasing its coverage of China. Reader's Digest

updated its cover look and format, launching a practical advice

section.

Despite improvements, the numbers show just how tough the year has been

for most, with very few exceptions. Eventhough the latest CMR

International figures, tracking January to September, did not fully

factor in the full impact on ad revenue of the US tragedies, it still

paints a pretty gloomy picture for the region's print media. Asiaweek's

fall in revenue for the January to September 2001 period against last

year of just over 22 per cent, was by no means the greatest revenue

slump, going by the performance of its regional competitors.

The handful of titles that had a very good year, at least up until

September 11, included Fortune China,which banked just over 50 per cent

more in revenues compared to last year, and Reader's Digest scored a win

with a 35.7 per cent increase.

Indeed, Reader's Digest has been remarkably resilient. Despite

aggressive targets based on an extraordinary year in 2000, the title

expects to surpass budgets, according to associate publisher Peter

Jeffery. Now in its third quarter, based on a financial year that closes

in June, the publication had its best-ever performance in December after

38 years of operating in Asia. Asia's biggest-selling title, with a

combined circulation of 1.2 million was 18 per cent up on revenue

compared with any previous edition, with its three regional editions

closing the year at record levels.

For others, there were also silver linings in the cloud. Despite

Fortune's low revenue figures, its marketing director, Stan Stalnaker,

said 2001 still turned out as the magazine's "second best year ever".

The magazine doubled ad revenue from three or four years ago. "We're

pretty much on target," says Stalnaker. "From an ad page standpoint you

see a drop, but we're on target - 2000 was just outrageous so we knew

that this year was going to be different."

Fortune's Business Life and Most Powerful Women in Business special

editions were key factors which contributed to the bottom line. The

former attracted ad dollars from the luxury goods and lifestyle market,

and the editorial pulling power of the latter brought a wider base of

advertisers on board.

"It had extreme local relevance; it was an eagerly anticipated issue and

advertisers were keen to come in," Stalnaker says.

Regional finance magazine, CFO Asia has also had a comparatively good

year, so much so that it has been able to invest in a spin-off title in

China, CFO China, which launches next March and which marks the first

time ever that an Economist publication has launched a non-English

language title. "We've had a good year," says CFO Asia ad director Simon

Cholmeley.

"We're up on pages year-on-year; it's been a tough market but we've

managed to do well."

At Newsweek, its two special editions of the year helped the title pull

in ad dollars in what has also been a difficult year for the

magazine.

Advertising director, Theresa Yeung, said the plan was to build up its

Issues Asia and the year-end Issues 2002 as brand extensions under the

Newsweek umbrella given their strong advertising pull. The former is the

second and the latter the third in a series of annual reviews of Asian

and global issues. Issues 2002 hit newsstands this month and will remain

on sale through to February 2002.

In all, Yeung said 670,000 copies will be distributed worldwide. The

issue was supported by 42 advertisers, bringing in US$2 million

in revenues.

Had the US attacks not occured, Yeung said the magazine was on track to

hitting 2000's revenue levels, which would have been a respectable

performance considering market conditions this year.

"What really affected us was September 11. Before that, the numbers

weren't looking too bad. We were at about 2000 levels, which was one of

our best years in the past four to five years," says Yeung.

Since the attacks, Yeung said the market has been on a slow mend.

November turned out to be surprisingly strong and she expected to end

the year marginally off on last year.

Business Week described the year as a challenge but it moved to offset

the technology slump by focusing on new categories of advertisers -

including lifestyle consumer products and investment companies - and

enhancing the cooperation with its conference partners in order to

produce more special sections and advertorials.

Alan Lammin, the publication's vice-president and managing director of

Asian operations, said he would be building on this strategy for next

year.

"We have to be more creative and adaptive because we're not getting a

clear visibility on clients' marketing plans. I believe that there is a

lot of pent-up demand out there but the watchword for the moment is

caution," he said.

But while Business Week is digging into a holding pattern in Asia,

Business Week China is going from strength to strength.

Lammin says the rate base will be increased from 74,000 to 80,000 next

month and the magazine has recently introduced a limited amount of local

content, penned by scholars and opinion leaders.

It goes without saying that magazines are eager to put 2001 behind them

and to try to get through the first half of next year. "In January,

no-one would have predicted September 11," says The Economist's

Pinnegar.

The Economist itself lost just under 20 per cent in ad revenue this

year.

"Anyone who set budgets in January for 2001 won't be near them."

The biggest advertisers this year across the board for regional players

have fallen into the following categories (the order of importance

varying from one magazine to another); computers, online and internet,

telecommunications, financials and corporate.

But the sectors that the publications are bracing themselves for - in

fact, banking on if they are going to survive the next year - are the

ones that have stayed away post-September 11, the travel and hospitality

industry and, to a greater extent than now, the financial

institutions.

The campaigns that have stood out the most in the industry's eyes have

been those that have intelligently and cost effectively exploited as

many available media as possible. The key word this year was undoubtedly

integration.

Singapore Airlines' campaign with AOL Time Warner, which saw it run a

multimedia promotion that included a large viral component for its new

Chicago route, was cited as making a very smart use of money and

media.

Liquor companies also aggressively pushed two key brands, Martell and

Chivas Regal, across the mainstream media, again using print as just one

component of a wider, integrated campaign. Sponsorship opportunities

were also crucial in getting the brand message out, with Chivas Regal

running bar and club guides in The Economist as well as advertorials

that tied in with its other promotions in Newsweek.

Time Asia staged a coup for Sony in its special double edition on Asia,

by allowing Sony product placement and accompanying advertorial content

that effectively positioned the Japanese electronics giant as the

corporate sponsor, without actually having to pay a premium for it. The

media agency was CIA.

"We did an ambush sponsorship by placing some advertorial pages

welcoming readers to the special - it made it look as if Sony was

sponsoring it," remarks CIA's Caven. "Sony was thrilled with it."

She adds that the publications that will win out next year will be those

allowing for more unconventional creative executions. They will be

flexible to new ideas and are willing to go beyond the 'norm'.

Time and Reader's Digest are two publications that spring to mind as

both already fit the bill, according to Caven. Of Reader's Digest, Caven

says: "They are proactive, very flexible, very creative -they've got

more to bring to the party like DM, online - and they offer more than

just cheap rates."

Reader's Digest's Jeffery said the title invested in sales, marketing

and research and played up its strengths as a direct marketing

organisation to pull in a range of new advertisers.

"Certainly our consistent message to clients is that we have a

responsible audience and can deliver more of their customers. It's not

just about delivering the numbers though as we have been putting

together some terrific integrated programmes and creative ideas," says

Jeffery.

As far as rates go, depending on who you talk to, they have either been

slashed all over the place by "weaker" magazines or have been

steadfastly kept at rate card -or standard discount - levels by the

likes of The Economist and AWSJ. But The Economist's Pinnegar admits

that this adherence to rate card prices may have lost it some

business.

"There are always magazines that discount and those that don't,"

counters Karin Galley Dick, general manager MindShare Singapore. "But

what everybody is looking for is added value, cover wraps, sponsorship

programmes and so on. I don't think we're seeing any great creative

executions though in regional print."

Looking ahead, publications are positive, but prudent, predicting single

digit growth figures at best. "We've been up and down," says Phil

Revzin, vice-president international at Dow Jones. "But the bottom line

for us is we're here to stay. We're not at all spooked by this

market."

Next year will be tough for Asia's print media, the first half in

particular.

But while publications are bracing themselves for more tough times ahead

in the next six months, with further consolidation and a tighter rein on

adspend, there does appear to be a light at the end of the tunnel,

namely when absentee advertisers get back in the game.

"Next year will be a really challenging year, but there are still key

opportunities out there," muses Fortune's Stalnaker, concluding: "The

world doesn't end in a day."

FEELING THE PINCH: HOW PRINT FARED BETWEEN JAN - SEPT '01

USdollars USdollars 2001 vs

Jan- Jan- 2000 %

Sep 2000 Sep 2001 USdollars

ASIAN WALL STREET JOURNAL 44,609,387 36,587,037 (8,022,350) -18.0

TIME ASIA 41,206,030 34,891,847 (6,314,183) -15.3

NEWSWEEK ASIA 28,242,006 24,732,803 (3,509,203) -12.4

ASIAWEEK 19,778,228 15,382,540 (4,395,688) -22.2

BUSINESS WEEK 15,226,948 10,644,163 (4,582,785) -30.1

FAR EASTERN ECONOMIC REVIEW 13,928,784 10,984,722 (2,944,062) -21.1

FORTUNE 13,274,266 10,098,165 (3,176,101) -23.9

THE ECONOMIST 11,481,850 9,191,750 (2,290,100) -19.9