The decline in media agency spend in magazines is because of a “perfect storm”, with agency bookings down more than a quarter in February, according to Pacific Magazines sales boss Peter Zavecz.
The medium took the biggest hit of any in the February Standard Media Index (SMI) figures, dropping 27.9%. Agency bookings make up around three-quarters of their advertising revenue.
This may have been due, in part, to huge declines in retail (8%) and FMCG (11%) ad spending, which are traditionally large clients for magazines.
Zavecz (pictured) said agencies were punishing magazines to a greater extent than their audiences are dropping, pointing to figures for the top 20 mags showing their readership dipped 2% in six months to December 2012, but ad spend went down 16%.
He told B&T: “We have been caught in the perfect storm as our major advertisers are FMCG, toiletries and cosmetics and retail and they are going through their own challenges, particularly FMCG struggling with the big supermarkets.
“Media agencies are underselling this well ahead of the curve, but the point of the curve where it’s really getting top those levels isn’t really being realised with these trends.
“These figures are more than alarming. But we’ve got the Magazine Publishers Association back together with News Limited and Bauer and the three of us will start to push more aggressively.”
PHD CEO Mark Coad agreed the push from the MPA would improve their share of spend, but said they would probably suffer further declines because of the structural shifts currently in place.
He added: “There’s definitely structural shifts, with the emergence of other areas like online and digital, magazines have copped the brunt of that, but I don’t think the declines will continue like that. It’s not sustainable.
“FMCGs are one of their biggest advertisers, and one of their biggest competitors is supermarkets, because of the pressure they’re placing on margins that is squeezing their advertising budgets.”
Maxus CEO Jon Chadwick added: “There’s a cautious mindset, and where you get a cautious mindset you veer away from the parts of the market where there is some forms of turbulence, and the declines in audiences would be that reason.”
But Zavecz hit back saying whilst newspapers were struggling because a lot of their content is given away online each day, magazines do not suffer the same problem, with its premium content protected, sometimes for many months.