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Each issue of CMO Close-up features an interview with a CMO, as well as other marketing executives answering that issue's "Big Question."
This week's feature:
Close-up with Laura Howard, CMO, ECI Telecom
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Is time up for newsweeklies?
Changing media landscape forces stalwarts to dramatically cut back
Marie Griffin
Story posted: January 19, 2009 - 6:01 am EDT
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After 75 years as a weekly, U.S. News & World Report is now a monthly. Meanwhile, the two leading weekly news magazines in the U.S.—Time Warner's Time and Washington Post Co.'s Newsweek—have been cutting jobs and other costs as ad pages plummet.
According to IMS-the Auditor, ad pages for Newsweek totaled 1,191 in the first 11 months of 2008, down 15% from the year-earlier period. Time's ad pages decreased 17% to 1,398 over the same period. Newsweek cut more than 100 staffers through voluntary buyouts last year, with another offer made to about 60 employees in December. Time Inc. is in the midst of a reorganization that will eventually eliminate about 600 jobs.
Time's rate base is 3.25 million, down from 4 million in 2006. Newsweek reduced its circulation from over 3 million to 2.6 million in 2007.
When anyone with an Internet connection can get news anywhere, anytime, what is the value proposition of a high-circulation weekly magazine, especially in a difficult economy?
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TRUSTED BRANDS STILL RELEVANT
“Time and Newsweek are trusted brands. They're not breaking news; they're a different type of product,” said Scott Peters, a managing director at media investment bank Jordan, Edmiston Group. “Clearly, they are still relevant to large audiences that buy the magazines and subscriptions. But the question over the long term is: Does the business model work?”
(Time and Newsweek declined requests to be interviewed for this article.)
Even if the economy were stronger, the newsweekly brands would still have to face the fact that “the Internet has changed the value proposition of broad-based publications,” Peters said. “Before the Internet, only a few magazines could reach a mass audience. Today, online ad networks can give you millions of impressions in any targeted demographic for far less money. That's a compelling proposition to sell against.”
The newsweeklies have at least one distinct advantage. “Advertisers continue to trust the brands and trust the environment. It's still difficult to get that consistency en masse online,” Peters said. It's not too late for the newsweeklies to develop profitable online businesses, but they “are in a position now where they must evolve; in fact, they need to accelerate the evolution,” he added.
Frannie Danzinger, VP-media at HSR Business to Business, said Time and Newsweek “are still relevant, and they have extreme credibility and a dynamic following, but the category is struggling.” General-interest properties are harder for advertisers to justify from an ROI perspective, she explained.
“In this economic climate, b-to-b marketers are scrutinizing all of their spending. In most instances in the business-to-business space, you're targeting specific audiences that are found in vertical rather than the horizontal channels, so the newsweeklies have become more of a luxury,” Danzinger said. “What I'm seeing now is that nonessential buys are falling off a lot of programs, both in print and online.”
For Martha Cleary, VP-group account director at Carat, Time, Newsweek and U.S. News & World Report are still important for some b-to-b clients, such as Philips Professional Healthcare. “The newsweeklies tend to cover the health care market better than the business magazines,” she said. “Health care professionals such as doctors and hospital administrators are not necessarily looking for financial news. The newsweeklies fit this target because they are read by more educated people, who tend to be professionals.”
Cleary looks for specific content, such as Time's coverage of such topics as Alzheimer's and vaccines or U.S. News & World Report's Best Hospitals issue. U.S. News & World Report's change to a monthly is not a problem for Cleary. “We're buying the content, not the frequency,” she said.
The move to monthly frequency “is the right move for U.S. News,” Danzinger agreed. “I would not advocate that across all the newsweeklies, though.”
“I think the U.S. News move to monthly is an anomaly,” said Michael Parker, managing director of AdMedia Partners. “U.S. News has never been a head-to-head competitor to Time and Newsweek, and it is a different animal because it's privately owned.” Parker said he doesn't anticipate any frequency change for Time or Newsweek because “they are part of large companies with diverse revenue streams, so they aren't under the same pressure.”
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DIFFERENT APPROACHES ONLINE
For the moment, the two major newsweekly brands are taking different approaches on their Web sites.
Last September, Time.com was relaunched in an effort, among other goals, to align its branding relationship with the magazine, which went through a major redesign in 2007. To stress its timeliness, Time.com's Latest Headlines box is now located in the upper righthand portion of the page, opening up the center space for original news stories of the day.
It's been nearly a year and a half since Newsweek.com's last major redesign. Other than the Latest Headlines box in the center of the home page, the Web site stories are repurposed from the magazine.
Things may change in the digital realm for both newsweeklies this year, as the parent company of each has brought in new online talent in recent months.
Vijay Ravindran has been named senior VP-chief digital officer for Washington Post Co. Ravindran was with Amazon.com from 1998 to 2005, then joined Catalist, a start-up political technology company.
Jason Kelly has joined Time Inc. Digital as VP-strategy and revenue management. Previously, he was manager-advisory services for Rapt, part of Microsoft Advertising's Publisher Solutions. M
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