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March 8, 2004 - Strategy Media Archive
News

U.S. mag spill is down, but are Canadian titles prepared for a rebound?

by Brendan Christie
page M 2

With nations to build and Enron execs to harass, Americans haven't had much time for light reading over the last few years and that's been evident in their magazine ad spends.

With several years of "negative growth" in the U.S., titles in Canada have managed to survive, if not thrive. And while the cat's away, the mice have plans to whoop it up - to the tune of a projected 5.5% growth in consumer magazine advertising revenue this year, according to the PricewaterhouseCoopers Entertainment and Media Outlook. But the question is, what happens when the American tabby turns back into a tiger?

With a steady flow of magazine launches and fewer closures (see sidebar below), there's no doubt that Canadian mags are doing well. And, according to Magazines Canada president Gary Garland, U.S. influence has abated.

"We have been measuring spill for the last 20 years," he notes, "and what we've noticed is that it has been in decline - certainly average circulation per title has dropped in excess of 40% in that 20 years, and that continues as a year-over-year trend. Despite there being more titles coming into Canada from the U.S., there seems to be less circulation coming with it."

But while Canadian mags are going blow-for-blow with their U.S. counterparts, it might not have been an entirely fair fight lately, given that the U.S. was distracted by matters in its own back yard. While Canada was partially insulated from the worst of the downturn by its sagging dollar, the U.S. caught the recession full in the face, and Yank publishers had more imminent things to worry about than Canadian penetration.

But indicators suggest that might be coming to an end. "The [U.S.] projections I have seen for 2004 suggest magazines will be catching up with a vengeance," says Garland. "They'll be making up for lost time, and they are expected to lead the market."

Publishers Information Bureau numbers show that although U.S. mag ad pages are down in the U.S. by 0.3%, January '04 over January '03, reported ad revenues are up (for the first time in three years) by 10.4% - including a 33% bump in transportation/hotel/resort titles, a 24% gain in apparel titles and a 22% jump in drug titles. Those gains were slightly offset by losses in technology titles (down 17%) and finance/insurance/real estate titles (down 6%).

Whether the U.S. rebound is a glass-half-full situation or not depends on your point of view. Garland believes that with so many U.S.-based advertisers and agencies burrowed into the Canadian landscape, more dollars hustled into mags in the U.S. will mean a similar trend north of the 49th. But that optimism is not universal. Masthead magazine editor Bill Shields thinks a rebound in the U.S. economy could mean an increase in split runs and increased competition that could negatively affect some Canadian titles - and therefore, by extension, advertisers.

Shields says he has already seen U.S. mags try to raise Canadian circ by using direct mail blasts. On his desk is a folder containing mail pieces from titles such as Condé Nast Traveler, Business 2.0, Business Week, The Economist, Fortune, Prevention, and Outside to name a few. In fact The Economist has sent multiple hits north, and Shields believes it could attempt a split run once it nears the magical number of Canadian subscribers (50,000 or so), where re-plating presses and replacing ads makes sense financially.

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