Nina Link speaks at the American Magazine Conference 2008

Nina Link, AMC 2008

October 6, 2008

Nina Link
President and Chief Executive Officer
Magazine Publishers of America

President’s Outlook
American Magazine Conference
October 6, 2008
San Francisco, CA

Good morning. Welcome to San Francisco and the 2008 American Magazine Conference.

We are meeting at a time of unprecedented change and uncertainty. For the world. For  the country. For  the media. And for magazines.

2008 has rocked the very foundation of our economy.  The Dow drops.  Anxieties rise.  Credit tightens.  And the uncertainty about the  presidential election fuels the volatile business climate.

Against this troubling backdrop, magazine companies face rising paper and postal costs. Lower retail sales. Soft advertising dollars…and… an evolving business model, a model where magazine dollars are not going to be exchanged for digital dollars…at least not in the near future. WE ARE NOT ALONE…other media, our advertising clients and agencies and retail partners are facing similar challenges and uncertainty.

BUT…make no mistake about it. We are a tough, resilient medium. Magazines have seen it all…heck we’ve reported on it all. War, peace, booms, busts, ups, downs, bubbles, fads, trends...you name it. We’ve been there.

Yes, these are uncertain times.  But here’s what we know for certain about magazines.  And these bedrock beliefs will help us through this painful cycle: 

• Magazine brands attract large, loyal audiences because they offer trusted, filtered content. 
• Magazine brands excel at bringing together vast communities of people with like-minded interests. 
• Magazines are targeted
• Magazine advertising is liked and valued by readers and these readers take action when they are exposed to an ad

Magazine brands can extend and expand their audience across a number of different platforms, especially digital

MPA’s mission – in good times and in tough times – is to protect the assets and investments of our members, and to help the magazine industry to grow and adapt to change. There are sweeping legislative, advertising and distribution issues that individual companies cannot tackle on their own.

Together, as an industry, we can address these challenges.  Together we can promote the power of our magazine brands.  Together we can pave the way for expanding and valuing our brands across media platforms.

And MPA, working together with you, has achieved so much despite the steep hill we all climbed this year. My goal this morning is to review some of our major accomplishments as advocates for the industry and to highlight initiatives that position our industry for print and digital growth.

First, Government Affairs.

The comprehensive Postal Reform legislation that we succeeded in pushing through has already delivered enormous cost savings for publishers. This past year, postal rate increases that could have exceeded 20 percent under the old law, were just 3 percent because of the new law’s inflation-based cap.

Meanwhile, Direct-to-Consumer advertising, our largest health-related sub-category, continues to draw Congressional scrutiny despite legislation passed last year protecting DTC. This year, MPA defused a number of new legislative proposals, by carefully explaining the value of DTC advertising and the special role that magazines play in health-related advertising.

Protecting our First Amendment rights applies not only to DTC advertising, but also to our journalists. We’ve made considerable progress in the past two years in moving federal Shield legislation forward, protecting journalists from having to reveal their confidential sources. We are doing everything we can to push the legislation over the goal line, finally, in 2009.

And we are redoubling our efforts to protect magazines’ intellectual property and fight piracy amid ever-increasing digital initiatives. This legislation is now very well positioned for passage in 2009.

This year we have a great advertising story to tell. In fact, we’ve never had a stronger case for magazine advertising.

Last month we launched “Under the Influence of Magazines,” MPA’s ad campaign on the power of magazine advertising. It’s reasonable to wonder why we’re advertising our medium in a soft market. Well, here’s the answer: Independent research shows that magazines lead in purchase intent, online traffic and search. What better time to tell that story when marketers want results more than ever.

Magazines are also tops in influencing customers to start a search online. Better than broadcast and cable TV. Better than newspapers. Better than radio. Better than Internet ads and outdoor billboards. And we’ve got the numbers to prove it.

Tomorrow, we’ll hear from MPA’s Dom Rossi, who will reveal some hard-core tips about how publishers can fight for more ad dollars in a soft economy.

Another way we are working to position our industry for growth is to develop faster, more stable, and more comparable magazine measurement. We’ve been working with McKinsey looking at ways to transform magazine measurement to more accurately reflect and convey the value of magazines to advertisers.

This measurement approach will measure – issue by issue – exposure to the magazine and key demographics such as age, gender, income, ethnicity, and family status.
It will measure engagement with ads based on issue-by-issue recall measurement of individual ads.

And it will measure consumer action as a result of magazine advertisements, issue by issue, ad by ad.

Establishing an industry-wide metric that advertisers will also find credible presents significant challenges. But it is crucial to enhancing the strength of magazines in the marketplace.

We are also working hard to promote the power of magazines at retail.  Last month, MPA and Meijer, the Midwest chain of supercenters, concluded a major newsstand promotion at 182 stores. The promotion gave customers a $2 discount off their next purchase at Meijer when they bought two or more magazines in a single shopping trip.

Although we are still analyzing the data from the test, early readings show very encouraging results.  The promotion lifted the sales of the entire category by 9% during the promotion period, and several of the featured titles enjoyed incremental sales of more than 50%.

Finally, no part of our magazine world is changing more rapidly than digital. Digital platforms offer us vast opportunities to expand our relationships with advertisers and our audience. And not only are these relationships expanding, but so is the size of our digital footprint.

This year, for the first time ever, MPA has been charting the growth of our online visitors. In this year’s second quarter, the traffic to consumer magazine websites rose 8.5 percent the over the same period last year. Consumer magazine sites averaged nearly 70 million unique monthly visitors in the second quarter. Visitors spent 21% more time on magazine websites compared to the second quarter in 2007.

They’re doing far more than just reading our magazine stories online. It’s obvious we can’t just call them readers anymore. They are watching videos, listening to podcasts, playing games, and even generating their own content for our sites. Let’s just call them our audience. And we love them because they’re engaged and committed to our magazines on whatever platform the brand exists.

These are just a few of the magazine industry’s accomplishments over the past year. In the face of trying times, we have worked hard to position our brands for growth.

Going forward, we must always tell our advertisers the unique strengths of our medium. We must always remember that we are blessed with gifted editors, publishers and marketers who adapt to change and capitalize quickly on market opportunities. And we must always remember that despite the explosion of media choices and touchpoints, our connection to our audience remains stronger than ever.

Thank you all.

We have a fantastic agenda for the next two days, so let’s get started. And now, I’d like to turn the program over to MPA’s Chairman and President of the National Geographic Magazine Group, John Griffin.