Magazine publishers face increasingly tough times as the category struggles to reverse declines in its share of global ad revenue, brought upon by the double whammy that was the
Their piece of the global ad pie is expected to continue declining over the next three years, according to World Magazine Trends 2010/2011, an annual magazine market report published by FIPP Limited, the worldwide magazine media association, and will make for grim reading for magazine publishers.
Globally advertising revenue declined by 10.6% in 2009, compared to a 2% decline in nominal GDP in the same year. Spend on the magazine market alone fell by a dramatic 20.2% in the same year as luxury advertisers pulled their budgets.
This year, global ad revenue saw growth of 4.8%, with growth projections for at 4.6% and for 2010 at 5.4%. This doesn’t translate to magazine adspend, though, with 2010 experiencing a 1.8% decline, a 1.4% decline in 2011 and a 0.1% decline in 2012, according to ZenithOptimedia, which contributed research on advertising figures to the report.
Ultimately, magazine publishers’ portion of the global ad pie is expected to shrink 8.7% of spend by 2012, substantially down from 13.5% in 2003.
Emerging markets now account for 31% of global magazine adspend and contributes 63% of projected growth in the market. The Internet, which continues to siphon away market share from magazines, is expected to increase its share of total ad revenue to 16.5% in 2012, up from 12.8% in 2009.
Developed markets in the northern hemisphere, hardest hit by the Great Recession, will see revenue in 2010 continue to lag pre-recession levels. Money will continue to shift online and magazine publishing will see its share of total adspend continue its decline.
In North America in the US, the outlook for magazines remain grim, while Canada is seeing a slight recovery. Mexico, meanwhile, is experiencing solid growth. Magazines’ share of spend in the region is expected to decline to 10.7% in 2012 – down from 14% in 2003. Online adspend overtook magazines in North America in 2009 with 14% market share, compared to 12.2%.
Picture in Europe remains bleak
The picture in Europe, says FIPP, remains bleak, with magazine closures, organisational restructuring and cost-cutting continuing. Magazine publishers in Western Europe will see their share of the advertising market drop from 18.2% in 2003 to 11.8% in 2012, while their colleagues in Central and Eastern Europe will see a decline to 8.1%, down from 15.3% in 2003.
Internet adspend in Western Europe already outstrips magazines with 15.9% of the market. This will grow to 19.6% by 2012.
The Asian Pacific markets expect growth in advertising spend, with the exception of Japan, which saw its economy slide from second biggest to third in global rankings, behind China for the first time. Even so, magazine publishers’ share of ad revenue will decline from 8.1% in 2003 to 4.6% in 2012.
Asia Pacific is expected to overtake Western Europe as the second largest advertising market in 2012, representing 24.4% of global ad revenues. Japan remains the second largest advertising market in the world, even as adspend in the country continues to plunge. China is expected to overtake Germany as the third biggest advertising market in 2012, up from fourth position.
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