Splitting hairsNielsen figures show who won and who lost in recession |
Femina’s closure was inevitable.
EAST LONDON - Marketing budgets are one of the first things to get slashed in tough times and last year everyone in media - from print to TV - felt the pain as advertising revenue diminished drastically. With the mid-year Soccer World Cup looming, everyone in SA media circles is expecting ad spend to pick up this year but, for many, it will be a slowing of the decline rather than moving into back into positive territory.
If last year was an annus horribilus, this year is a sober clawing back to profitabilty as most have got their costs under control but the effects of 2009 will be felt for a long time to come. For evidence of just how awful 2009 was, look no further than the recently released AdEx figures from Nielsen, which is an annual review of advertising spend for media organisations. These numbers are seldom covered in the media as many think they are proprietal but I called up Nielsen and they sent them on. The figures can be controversial as they are calculated on official ad rates and, therefore, cannot factor in discounting and cross-title deals within the same media house so some of the stats for last year may, in fact, be generous. It does, however, give one the opportunity to compare apples with apples.
So who lost and who won last year, according to the AdEx figures? Broadly speaking, community newspapers faired better than the regional and national papers and many even inceased ad revenue. The business sections of national newspapers and national business print titles had large drops in ad spend - as did the majority of magazines, especially in the general interest category.
The shift towards the more targeted - and cheaper - community newspapers was echoed in radio, with many community radio stations increasing ad revenue while most of the national and regional stations dropped. However, ad revenue for most of these stations remained in the hundreds of millions and, considering commercial radio stations operate on low cost bases with small staff complements, profit margins would have been less squeezed.
In television, quite a few satellite channels saw large growths in ad revenue but many came off a low base while e.tv rose 4.6% from R2.092bn in 2008 to R2.189bn while its eNews Channel rose 145% from R87 370 478 two years ago to R213 979 416 last year. The SABC's commercial TV channel, SABC3, fell 6% from R1.476bn in 2008 to R1.388bn last year.
But it is the highly competitive women's general-interest magagine category that is the most intructive, especially with Media24's recent announcement that it is closing Femina. The leading media house in this sector is the Naspers-owned Media24, which has titles such as Fairlady and True Love. It also owns the big kahunas of the magazine trade, You and Huisgenoot, which are classed "family magazines" but have large female readerships. Femina was bought by Media24 from Jane Raphaely's Associated Magazines in 2006.
Associated Magazines, the company started by Raphaely in 1983 after she founded Fairlady for Naspers in the 1960s, has Cosmopolitan, Marie Claire and O.
Caxton, the owners of The Citizen newspaper, own titles such as Living & Loving and Rooi Rose.
If you take a look at the table below, you can see how the recession took its toll as advertisers got more selective about where to put their money:
Something had to give and, although there has been much handwringing over the closure of Femina, it seems sensible that Media24 - which is not known to be sentimental about brands as they are a results-driven company - shut the title when they already have Fairlady. The difference in revenue streams between the two titles is notable: Fairlady brought in R39.6m last year compared with Femina's R7.6m.
There may well be more magazine deaths in this competitive sector this year and, in the view of economists, this is a desirable consequence of recession. In the good times we build up all sorts of services and products for which there may not be a viable market; in recession we clear out the dead wood.
Ultimately, the real winner is Raphaely. She has always been an extremely agile media owner. First she started Fairlady and made it the market leader. Then she had Femina to compete with Fairlady. Cosmopolitan, which is strongly focused on younger women, continues to be a success and bringing O to this country was a major coup (though you'll notice it had a bad year last year).
But Raphaely's master stroke was selling Femina to her old bosses before the tide turned in a big way. She may just be less sentimental about brands than Media24, which is why Raphaely's family business has survived this long up against the likes of Media24 and is still one to watch and learn from.
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