Magazine Economics

Positive indeed — while all the other news titles we examine saw a drop in either ad pages or dollars or both in 2005, The Week, now five years old, enjoyed significant growth. Ad pages were up 9% in 2005 and ad dollars were up a dramatic 63%. In absolute numbers, The Week still lags far behind its competitors. Its 568 ad pages are only a fraction of Time magazine’s 2,293 and not even equal to David Bradley’s National Journal, with 820 pages — a title where ads are an afterthought and subscriptions pay most of the bills. And in ad revenue The Week’s $17.8 million does not compare to Time’s $632 million.6

Still, the speed at which The Week is growing is impressive, and because of the low-cost, low-overhead, manner in which the magazine is put together — compiled from publications around the country and world — even relatively small increases in revenue can have a big impact on the bottom line. The magazine is not making money yet, but its staff reports it is on track to break even in 2006.7

Change in Ad Dollars and Pages, Select Magazines

2004 vs. 2005

Design Your Own Chart

Source: Publisher’s Information Bureau

Other nontraditional news titles had more mixed results in 2005. Jet had a 7% increase, or about $2 million, in ad dollars and a 9% increase in ad pages. A smaller increase in ad dollars than in ad pages (the reverse of what most magazines experience or, at least, announce) may suggest that the magazine will not be able to command the rates it would like.8

Four other titles saw the reverse advertising picture — pages down but dollars up, a little more favorable position once the economy improves.

The Atlantic’s ad pages were down 13%, while dollars were up a small 0.3%. In actual dollars the Atlantic experienced a $73,000 increase in revenues.9

The New Yorker and the Economist suffered through small reductions in ad pages — 3% for the New Yorker and 2% for the Economist — but both also witnessed good-sized increases in ad revenues — 7% and 11%, respectively, in 2005. In dollar terms, the Economist had a revenues increase of about $7.5 million in 2005 to $72.5 million, while the New Yorker had an increase of about $15 million to $215 million. That number puts the New Yorker in the same ballpark as U.S. News and World Report ($256 million), the struggling bottom player among the big traditional news weeklies.10

It is not unusual for ad revenues to rise while pages decline; ad rates can increase even as pages fall. The ad revenue figures collected by the Publisher’s Information Bureau and cited here are determined by multiplying pages by each magazine’s stated ad rates. The rates advertisers actually pay are closely held secrets and are often not uniform. Actual rates can depend on anything from the advertiser and to the length of contract. Some industry insiders say the revenue figures are so inflated that the actual numbers could be only around half the amount the PIB figures indicate.

U.S. News, also, saw pages down and revenues up in 2005. The revenue increases, though, were more in line with the Atlantic ’s, just 9%, to about $257 million. Ad pages dropped 0.6% following a year when they were up substantially.11 The question for the magazine now is what will happen as it embraces its new mission and becomes more of a Web-based publication? And how soon and how quickly will those changes occur? Some of the ads in the magazine may migrate to the Web, but it is unclear what the net change in revenue will be. If newspapers are any example, U.S. News is likely to be limited to much lower rates for online ads than for print ads (see Newspaper Economics).

Both Time and Newsweek fared much worse in 2005 than in 2004. Ad pages and dollars both fell at both titles. Time had a particularly down year with a drop of 12% in ad pages and 8% in ad revenues — more than 300 ad pages and $55 million. Newsweek witnessed a 11% decline in ad pages and a 6% drop in ad dollars, or 247 ad pages and $30 million.12

News Magazines Ad Pages, by Title

1988 - 2005

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Source: Publisher’s Information Bureau annual reports

News Magazine Ad Dollars, by Title

1988 - 2005

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Source: Publisher’s Information Bureau annual reports

What might explain the declines? Could they be attributed to a post-election year drop-off — numbers simply looking low in comparison to 2004?

If you compare 2005 to 1997 — the year following the most recent presidential re-election — that theory doesn’t hold up. Time, Newsweek and U.S. News all saw increases in ad pages and ad dollars in 1997.13 All magazines, news and otherwise, saw a drop in 2001 (after the 2000 election); the industry suffered through a one-year decline in advertising pages of more than 10%.14

It may be that the ups and downs of the news titles have more to do with the nation’s overall economic situation than the news environment. From 1994 to 1999, when economic times were good, ad pages were rising at the traditional weeklies. From there they dropped, and not even the 2000 election could save them. But are times so hard in 2005 that pages should be falling the way they are? And why are the drops so much more dramatic at the big news weeklies? The nature of the 2005 economic situation may suggest at least part of the answer. Car ads make up a lot of the pages in the big titles, and the U.S. auto industry is in a slump. The question may not be fully resolved until the economy improves. If the advertising picture does not rise then, it will signal bigger problems for general-interest print magazines.