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

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