Magazine Death Pool's Grim Reaper On What Market Woes May Mean For Mags

Posted by: Jon Fine on September 24, 2008

There is, you may have heard, much tumult in the financial markets. Ad Age had an interesting story this Monday on what the fallout for media may be, in terms of advertising cutbacks. The piece has got lots of good stuff in it, including a nugget on how AIG had already canceled all TV ads for the rest of ‘08, after spending what ad tracker TNS CMR Media Intelligence reckoned to be $50 million in the first half of this year.

Me, I reached out to the Grim Reaper, the anonymous (apparent) magazine insider, or insiders, behind the blog Magazine Death Pool. Grim, the handle with which s/he signs his/her emails, has a good eye for ad page dynamics, and estimating which magazines are about to disappear.

I know, I know, most magazine types can do that. But where Grim has proven especially acute is in spotting potential future category implosions. Over a year ago s/he was writing about how the shelter category was ripe for a shakeout. I disagreed with him/her/them at the time. Bad idea. Since then, Conde Nast’s Home and Garden, Martha Stewart Omnimedia’s Blueprint, and Hachette’s Home have ceased to exist.

Given that, I was interested in the implications for magazines that the Magazine Death Pool denizen draws from the current crisis. My own view is that he/she/them/it has a perspective that may be overly grim (I’M SORRY!), but what follows is a lightly edited email exchange we had concerning this matter.

I certainly don’t think that today’s convulsed markets means everything’s gonna come up roses for financial advertising, and I have an obvious dog in this hunt, seeing that I write for a magazine that has the word “business” in the title. That said, I see a few logic flaws in what Grim lays out. For one thing, the dotcom boom meant hundreds of businesses—read: advertisers--disappeared. That hasn’t happened here yet. Not even close, in fact.

Also, generally advertisers facing some kind of crisis of confidence want to advertise, not run and hide. Nevertheless, as I said, Grim’s been right before. And who knows? Maybe he’ll drop by here soon. Umm—just not in that way. I hope.

From: "Fine, Jon"
To: Grim Reaper
Sent: Monday, September 22, 2008 1:28:43 PM
Subject: wall street

Grim,

Regarding the current financial crisis (assuming there's no '29 style market crash): is this a net negative or a net neutral event for magazine advertising?

Remember that the financial firms most affected are not big mag
advertisers (and that AIG, which is, still sort of exists).

Best,
Jon

From: Grim Reaper
Sent: Monday, September 22, 2008 9:35 PM
To: Fine, Jon
Subject: Re: wall street

Dear Jon,

When the dot com bubble burst, many business and personal finance magazines felt their first big hurt in a long time. Those same magazines will experience another punch to the gut with this current crisis. There is nothing net neutral about this. There already tons of personal finance ad dollars leaving magazines and television, and going into the web. Besides, banks and other investment vehicles (notably mutual funds companies down the food chain) get advertising cold feet at the first sign of trouble and tend to pull out more than assure their customers.

There's no reason why this wouldn't be hitting high end magazines like the American Express titles and probably some of Conde Nast.

With Wall Street in turmoil, it trickles down to luxury car and watch advertisers getting scared too. The less people there are to buy their products, the more cutbacks magazines will experience.

Yours truly,

Grim

From: "Fine, Jon"
To: Grim Reaper
Sent: Tuesday, September 23, 2008 4:31:23 PM
Subject: RE: wall street

I don’t have the data at hand, but I think most of the banks/brokerages affected were not big advertisers. Ever see a Goldman Sachs ad? Or a Lehman Bros ad?

Probably cobbling a blog post out of your responses to my last email and the one below. Hope autumn in hell is nice.

Jon

From: Grim Reaper
Sent: Tuesday, September 23, 2008 6:14 PM
To: Fine, Jon
Subject: Re: wall street

Dear Jon,

You are right. You do not see magazine ads for Lehman and those sorts. However, the impact does run down the money food chain, as my earlier e-mail said. When things shake from the top, everybody below is affected. It's the old "the rising tide carries all boats," except this time the tide is getting lower for everybody.

When it is perceived there are less employed Wall Street types and the whole institution is on life support, you are still talking about numerous luxury advertisers and mutual fund companies getting cold feet.

I am expecting this to affect personal finance, business and luxury titles. Doubledown Media has to be right in the crosshairs of this too.

As for autumn in hell, it's not like they wrote a song about it, but frankly there is not much scenery to photograph here.

Yours truly,

Grim

From: "Fine, Jon"
To: Grim Reaper
Sent: Tuesday, September 23, 2008 6:15:15 PM
Subject: RE: wall street

I see your point re Doubledown, but I wonder if we (meaning you) are overestimating the national effect of all this, given where we live.

Jon

From: Grim Reaper
To: Fine, Jon
Sent: Tue Sep 23 20:54:40 2008
Subject: Re: wall street

Financial and mutual fund companies are generally like Chicken Little lemmings. Just watch.

This will all bear good viewing for you and me over the next few months for ad pages.

Yours truly,

Grim

From: "Fine, Jon"
To: magazinedeathpool@yahoo.com
Sent: Tuesday, September 23, 2008 10:00:58 PM
Subject: Re: wall street

Normally I never make this point (and full disclosure, I work for a business magazine, duh) but if I am a mutual fund company, I am going to be out there telling people they gotta go with me--now more than ever, in fact. Why wouldn't they?

Jon

From: Grim Reaper
Sent: Tuesday, September 23, 2008 10:38 PM
To: Fine, Jon
Subject: Re: wall street

Dear Jon,

Oh, some mutual fund companies do play it smart and keep pushing their marketing. But in general, and history proves this, a number of these companies get spineless and cut back. Their view is "the sky is falling, people are scared and shaky with this market, so let's pull back." They are conservative and institutional by nature, so when the going gets rough, they pee in their pants and run away.

It's happened every time the market gets shaken up for one reason or another.

Yours truly,

Grim

Reader Comments

George Rappleswood

September 25, 2008 10:12 AM

Regional/City titles depend heavily on real estate pages and the category definitely belongs on any list. I'm sure these titles are hurting now.

Don

September 25, 2008 10:17 AM

I cannot believe you didn't ask the Grim Reaper more about the robot sex topic.

While one doesn't normally see Lehman Brothers ads, one DOES see Merrill Lynch ads and Merrill got caught in all this. Of course EF Hutton spent tons of money 30 years ago and look at them now.

When the dotcom world crashed the very liquid software training company I worked for dried up. We weren't a shaky dotcom, dotcoms weren't even our primary market, but losing 25% of customers who would pay a premium on immediate training vs the other customers who were bargain hunters just killed us. Looking at luxury goods ad buys in BW, Golf magazines, Vanity Fair (traditionally the only place I saw truly high-end watch ads), etc, is the right move. I would be shocked if some companies introduced radical new designs of high end goods in 2010 and didn't just lay off engineers and designers while the market catches up next year.

Now, another question might be, what industry will those investment banking mbas end up in and how will they influence it?

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