Magazine Economics

Another way to understand the advertising appeal of a magazine is to look at the kinds of ads it carries. They reveal something about the nature of the audience, and the breadth of the ads may predict the ability of a magazine to weather difficult times.

A look at the ads in one issue each of Time, the Economist, the New Yorker and The Week suggests that the magazines are aimed at different audiences and that some have a deeper pool of potential advertisers than others.

The May 23 Time relies heavily on cars (9 pages of ads), banks and financial companies (6 pages) and computers and technology (4 and 2/3 pages). And the companies in the 28 total ad pages are names familiar to most consumers: Honda, Citi, Microsoft and General Electric.15 There are a few exceptions. GE, for example, specially sponsors a section in the back of the magazine called “innovators” with an ad that is more about what a good clean company GE is. But most of the ads are like the one inside the back cover for the Toyota Sequoia, the three-page spread on Citi’s Thank You program, or the one-pager for the prescription drug Nexium. They are ads to spur sales.

The Economist’s May 14-20 selection of advertisers is broader. Its biggest advertisers are banks and financial companies (7 pages), followed by automakers (5 pages) and computer and technology companies (5 pages).16 But other advertisers suggest a different audience from Time’s — consulting companies, petroleum companies and a government ( Puerto Rico to be precise). Even the magazine’s car ads are different. Toyota’s ad in the Economist isn’t about a car, it’s about an assembly line and its engine plants in the United States. Hyundai’s focuses on the company’s engineering plant in Michigan. The ads aren’t about the sleek products as much as they are about the companies themselves. (But the back cover which features a silver Jaguar on the inside and a Patek Phillipe watch on the outside.)

The Economist, which still calls itself a “newspaper,” also features 10 pages of “classified” advertisements for things like conferences, symposiums and jobs, including chief executive and chief economist positions. Altogether, the Economist carries 46 pages of advertisements.17

The New Yorker’s May 23 edition features an even broader set of ads. Not many magazines offer a huge four-page BMW advertisement in the same issue with a little box ad — 1/18 of a page — for www.replacements.com, a Web site to help you find china, crystal and silver collectibles. The biggest ad buyers are still banks and financial companies (6 pages), followed by automakers (5 and 1/3 pages) and computer and technology companies (4 pages, all of which are for Microsoft products). But books and book companies have nearly three pages of ads. General travel ads — everything from Frommer’s guides to a cruise to Antarctica — get 2 and 1/6 pages. And the tiny boxes of miscellaneous ads, selling everything from commemorative crystal bowls to subscriptions to a literary magazine by children, take up a total of about 2 and 1/3 pages.18 If one were to try to get an understanding of who The New Yorker’s reader’s are by looking at these ads, one could only say the advertisers seem to see the magazine’s readers as literate, with a lot of disposable income to spend on “unique” items.

The Week’s May 27 issue follows the title’s strict rules on advertising. The magazine limits advertising to only 30% of its pages — the industry average is about 48% — and all The Week’s ads are full-page.19 This issue carries 10 pages of ads, half of them for banks and financial institutions.20 Everything else gets one page each — cars, petroleum, technology, alcohol and food. Some of the ads, like the one for Chevrolet’s SSR vehicle, are clearly consumer purchase ads, but others, like those for Exxon and the Altria Group, are focused on corporate image. The mix may say something about the readers of the magazine, who reportedly include well-known newsmakers. Indeed, nearly every issue features a quote on the cover from a well-known person — from Salman Rushdie to Barry Diller to Bob Kerrey — saying why they like about the magazine.