The Future of Magazines

In the US and Europe, magazines (like newspapers) are in trouble, with circulations either static or falling. Emap (UK) is up for sale and there are rumours that Time Warner will soon sell Time Inc, the world’s largest magazine company. In Germany it’s much the same story, with Bertelsmann allegedly attempting to offload Gruner + Jahr, its magazine division. So is the sun slowly setting on the magazine industry? Business models are definitely under threat as readers and advertisers migrate online, but things may prove to be healthier than suspected. For a start, magazines have many qualities that their online equivalents cannot match. They are highly portable and glossy. Indeed, in some instances, such as fashion, the ads are seen by many readers to be part of the product and people will willingly pay to have advertisers target them with highly-personalised ads. Moreover, instead of simply replicating images and text online, magazine companies again have the opportunity of offering readers specialist subject-related products and services online.

For instance, if you are a specialist homes magazine it is relatively easy to offer online 3D planning tools or colour palettes. So to sum up, reports of the magazine industry’s immanent death may be exaggerated. On a related note the world’s 11,000 newspapers recorded a 2.3% increase in circulation last year (and were up by 5% over the past five years) although again this was not the case in the US and Europe. Moreover, if you combine newspapers with magazines globally they still represent the world’s largest advertising medium with a 42% global share of ad spend.

Advertising on mobile phones

Advertising on mobile phones is currently a tiny text-based business worth around US$871 million globally, according to Informa Telecoms & Media. That’s out of a total global ad market worth US$450 billion and an Internet ad market worth US$24 billion. But things may be changing. There are approximately 2.5 billion mobile phones globally (a figure significantly more than the number of computers) and the mobile phone is generally one of the three personal items that people carry wherever they go (the other two being keys and money). Moreover, phone companies know a lot about their customers and their habits and mobile phones also leave trials of data –ranging from location to payments – that can be tracked, subject to privacy laws. Added together this makes what advertisers like to call ‘relevance’. Firms know where their customers are and what they like and this can, in theory, be translated into subject-matter or location-specific ads. For example, if you conduct an Internet search using keywords, these keywords could be used to sell you a specific product or service. Equally the GPS inside an increasing number of phones (all new phones in the US by law) knows you are next to a pizza joint and so, theoretically, could send you a coupon for a discount pizza. In the future things could get even more interesting.The technology already exists to analyse voice calls or text messages – and therefore eavesdrop – on what you are saying or texting, which in turn could be used to predict what you might be interested in. (If you use the world ‘hungry’ that pizza voucher might pop up again). That’s the theory anyway. The fact that mobile phones are personal may mean that any intrusion from advertisers will be unwelcome, although some early evidence seems to contradict this. For example, in the US Virgin mobile has a service that trades free airtime and text messaging for ad exposure. If you agree to receive the ads the calls are free. So far Virgin has given away 10 million free minutes of airtime so something must be ringing a bell with subscribers.