Thursday, September 27, 2007

Beleaguered Men's Magazines Start to Battle It Out

Beleaguered Men's Magazines Start to Battle It Out
By David Crow

Men's magazines is truly a sector in crisis: in the first six months of 2007 nearly all UK titles aimed at the coveted 18 to 34-year-old market posted dramatic falls in circulation. FHM - Emap's leading men's title - was hit the hardest; it sold an average 312,000 copies in the first half of the year compared to 421,000 in the same period in 2006, a massive drop of 26%. Maxim didn't fare much better, dropping 18.1% to 108,000 copies.

Cheaper weekly magazines like IPC's Nuts and Emap's Zoo - launched in 2004 to help save the sector from decline - have also performed badly. Zoo sold 187,000 copies in the first half of the year, an 18.1% decrease that pushed the magazine below the 200,000 barrier for the first time. Esquire, published by the magazine giant Hearst, is the only title which is holding its own, although with a circulation of just over 50,000 a month it sells far less than its competitors.

Although all traditional media - be they television, radio or print - have been hit by the popularity of online content, the men's mag sector has felt the squeeze more than most. Over 44% of British men say their buying habits have changed as a result of online growth, compared to 36% of women. It's easy to see why: the kind of product that FHM et al pioneered offered readers a previously unseen degree of control. Polls, competitions and the ability to submit amateur content - such as true stories and pictures - created an audience ripe for user-generated content. When Web 2.0 came of age, men's magazine readers were ready for the next step.

Luckily for the industry, advertisers are still desperate to target this market. Men aged 18-34 often have impressive spending power twinned with an appetite for luxury and high-end goods, making them an attractive proposition. But they are famously elusive, known in the industry as "message averse": they will spend money, but it is hard to influence them on how to do it.

Over 71% of males aged 18-34 say they now spend more time on the internet than they did a year ago. For men's magazine brands, this offers the perfect opportunity to develop new products, an opportunity which most have seized. now boasts an audience of over 1.7m unique users a month, a figure the print title could only dream of, even in its heyday.

The site began its transformation seven years ago when it started offering more video content, with clips of glamour models during photo shoots especially popular. Since then, has launched a community section where users can create personal profiles, submit content and make online friends; more than 70,000 users have signed up.

Dennis Publishing's internet products are also thriving. Monkey - the online magazine tipped for success in The Business last year - now boasts nearly 270,000 users, a figure which is growing by 20% a month. More importantly, the eZine - which is read online but looks and feels like a printed magazine - has offered advertisers innovative ways of targeting this problematic audience.

In the current issue, Carlsberg are advertising a "draughtmaster", a product which it claims pours the "perfect pint". Instead of buying static advertising space, Carlsberg has purchased a full page where readers can test a virtual version of the product; it's the kind of fun, user-involved promotion the magazine's readers will love.

Hearst, publisher of Esquire, has been slow to offer an online competitor in this area. Its recent acquisition of - a network of sites aimed at the young men's market - is its first real attempt to target young men on the web. UGO has had a chequered past. It launched in 1997 as Unified Gamers Online, to provide an internet destination for video gamers.

It was sold a few months later to InterWorld who spun the company off and began seeking venture capital. Since then, more than $82m (£40m, E58m) has been spent trying to build the ultimate men's site, although its success was thwarted by the emergence of Web 2.0. At one point, things looked so shaky that the venture capitalists pushed through a scheme to guarantee them five times their investment if the site was sold.

Despite its history, UGO is not a bad purchase. The deal, reported to have been worth $100m, has given Hearst a platform that boasts over 28m unique users worldwide, 11m of whom live in the US. It is also profitable, bringing in $30m revenue and $6m profit. The marketing solutions offered by UGO have been the envy of much of the men's entertainment industry for years, offering advertising which goes "beyond the banner". Most of these promotions take the form of branded mini sites; Fox sponsors The World of Simpsons section while Apple has branded the iPhone launch centre, keen to target this audience of "early-adopters" of technology.

Most importantly, UGO is one of the few Web 1.0 brands to have survived the dotcom crash, putting it in the esteemed company of eBay, Amazon and Yahoo! This will allow Hearst to add real value to the site by building in user-generated content and rich multimedia features, a move that should see traffic increase; that UGO is not yet finished is one of its best attributes.

The men's magazine brands already working online should watch the site's development carefully: Hearst's entry into the arena may be late - but it could really shake the market up.


Emap: Consumer magazines 'challenging'

27 September 2007

By Paul McNally

Emap has warned that the outlook for its consumer magazines remains "weak" and "challenging" - with advertising revenue down 11 per cent year on year.

But in an update to the City this morning ahead of its half-year results in November, the magazine and radio giant said overall conditions were "encouraging".

Emap's B2B division continues to be its most successful asset, with like-for-like revenue between April and September up an estimated five per cent year on year.

The company has reported "good growth" in B2B information products and events, while the performance of business magazines was "broadly flat".

Emap's consumer magazines, meanwhile, have seen an estimated four per cent fall in circulation revenue between April and September, but a number of "efficiency initiatives" had reaped "earlier-than-expected benefits".

"We anticipate that trading conditions in our consumer magazine markets will continue to be challenging for the rest of our 2008 financial year, although, based on current forward bookings, the second half should show some improvement," the company said this morning.

Radio revenues were up two per cent overall - with improved performances outside of London offsetting a slump in revenue in the capital.

The company said it "continues to be encouraged" with the progress of its strategic review, announced in May this year following the abrupt departure of chief executive Tom Moloney.

The search for a new chief executive continues in tandem with the review process, with an update expected from Emap when it announces its half-year results in November.

"The board remains focused on examining all options to maximise shareholder value, including a possible sale or demerger of some or all of the constituent parts of the group," Emap said this morning.

Emap has invested £14m in new product development since April - a large part of which has been directed at the relaunch of First magazine under new editor Jane Ennis.

The group expects to have invested a total of £25m in new product development by the end of the financial year, including digital initiatives in consumer and B2B magazines.

One of those initiatives will be the launch of a new women's web portal, pooling content from weekly titles such as Grazia, Heat, Closer and First.

The company will announce its half-year results on 13 November.

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