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[Transformation 2010] A Message from Magazine Leaders, Panel Discussion 

Good morning,
I’m Ann Moore, the chairman and CEO of Time Incorporated.

On behalf of Chuck Townsend, Cathie Black, Jack Griffin and Jann Wenner, we’d like to thank the 4As and all of you for giving us the opportunity to address the challenging environment for magazines as depicted in the video you just saw.

It has been a wild two years in the media business!

I think you will agree that it’s extraordinary for our five companies to come together. 

We are fierce competitors… but also fiercely committed to the belief that magazines are a powerful, compelling medium for consumers and advertisers… and fiercely determined to correct the many misconceptions about magazines that are swirling around the advertising industry.

The logo behind me is emblematic of our joint mission. 

It creatively fuses our five companies together in a common, passionate purpose:
to underscore the immense affection that consumers have for our brands… and the immense impact that magazines have for advertisers.

Created by Y&R New York, this “Magazines” logo, features distinctive typographies of several leading magazine titles from our companies. How many can you identify?

The M from Time…
A from Vanity Fair…
G from Rolling Stone… A from Entertainment Weekly… Z from Harper’s Bazaar…
I from Marie Claire…
N from Fortune…
and of course ES
from Esquire.

[PAUSE]

Today, for magazine publishers, it seems that everyone is piling on the criticism.

“The Internet has made you obsolete.”

“Young people don’t read your magazines.”

“Your titles are shutting down,
en mass.”

And on, and on, and on…. We hear it all!

The problem is that those pious pronouncements are just not true. They’re unsubstantiated innuendos….or mistaken notions…
or possibly, even a right wing conspiracy!

[PAUSE]

OK, let’s settle on what they really are… Myths.

Myths are invented stories, based on imaginary collective beliefs.  Unfortunately, in the instant word-of-mouth environment of today, myths become perceptions… perceptions shape new behaviors… and new behaviors create new realities.

We’ve really had our fill of the myths!

The joint initiative we are launching today is designed to dispel the misleading myths about magazines through a campaign that will reach the entire U.S. adult population… multiple times… with a brilliantly crafted advertising message.

The five of us still believe advertising works.

This morning, my counterparts at Meredith and Hearst will join me to state – and then decisively bust – six of the biggest magazine myths.

And we will give you a peek at the exciting advertising campaign that will take our message about the power of print to all of America.

So let me jump right in and diffuse the first and perhaps most wrong-headed myth!

Myth number one: Readers are abandoning magazines, and young people simply don’t read them.

This is just plain wrong.

Readers love magazines… and so do young people!

Magazine readership has grown over the past five years. 
In fact total readership increased 4.3 percent from 2004 through 2009 to more than 189 million readers.

And paid circulation remains nearly 300 million, as it has for the past ten years, despite the growth of new media options and our own Web traffic.

In total, 84 percent of U.S. adults read magazines. And the number of issues they read per month has consistently exceeded 11 for the last five years.

Now let’s tackle the age issue – the mistaken notion that young people aren’t reading magazines.

Well, for the past five years, the median age of magazine readers, at 44.5, has been consistently younger than the median age of total U.S. adults, 45.4.

Meanwhile, the median age of primetime TV viewers, 46.6, and newspaper readers, 46.9, has been consistently older than the U.S. adult population.

Contrary to what some people may believe, the number of young readers, 18-34 years, has grown over the past five years by 2.4 percent.

And to those who say teenagers and young adults with iPods permanently implanted in their ears have abandoned magazines, I’d like to quote South Carolina Congressman Joe Wilson …

YOU LIE!
 
Or maybe, sadly, you don’t have a teenager or a young adult in your sad life.

Because here are the facts…

75 percent of teens read magazines. And 88 percent of 18-34 year-olds read them.

Since Facebook was founded in 2004, magazines have gained more than a million young adult readers.

In fact in 2009, young adults read more magazines than their parents!

And during the 12-year life of Google, magazine readership has increased 11 percent.

Myth number one dispelled. 

Let’s move on… 

Myth number two is a direct and disturbing outgrowth of myth number 1.  It’s the perception by some marketing executives that in the digital age, print advertising just doesn’t work anymore.

This one really gets under our skin… because we know consumers value our magazines… spend quality time with them… pay for them… and actually enjoy the brand advertising contained within their pages.

Brand advertisers should be clamoring to be a part of this immersive, intimate environment that consumers adore. 

It’s a highly effective one, particularly given the fact that two key measures of ad effectiveness for magazines – ad recall and actions taken as a result of seeing an ad – have both grown significantly.  Ad recall increased by 13 percent over the past four years, while action-taking increased by 10 percent. 
 
And in 2010, two new services –AdMeasure from MRI and Vista from Affinity – will measure the effectiveness of every ad in every issue of the consumer magazines they track.

These services will provide marketers with a measurement of how many readers actually saw their ad, as well as how many took an action as a result of seeing it, providing even greater confirmation of how well magazine advertising works.

Ah ha!  So the burden shifts to you to do great creative!

And there’s more… Magazines have another impact to note. They boost the effectiveness of other media.

When magazine advertising is added to the media mix, purchase intent and brand awareness improve. Magazine advertising drives consumer attitudes and intended behavior more effectively and efficiently than viewing television advertising alone or when TV is combined with online advertising.

But now let’s talk about real dollars and sense impact.

Magazines are the most cost effective and consistent medium at both ends of the purchase funnel.

Adding magazines to TV and online has the greatest impact on consumer attitudes and intended behavior at the top of the funnel… and on favorability and purchase intent at the bottom of the funnel.

Bottom line, magazines are integral to your media mix because consumers value them in their media mix.

Now let’s move on to myth number three… the ‘elephant in the room.’

Magazines are losing scale in today’s media landscape.

The attention paid to magazine closings – admittedly, sometimes a result of our own editorial coverage – is soooo overblown.

The truth is, in our fractured media world, magazines still deliver remarkable scale week after week and month after month.

Would it surprise you to know that every week more Americans read People Magazine than watch the final episode of American Idol!  Forty-five million readers, week in and week out, for People, versus 27.7 million for the 2009 season finale of American Idol!

If you need big reach vehicles in a fragmenting market, you simply can’t beat magazines.

The top 25 magazines reach more adults and teens than the
top 25 prime-time TV programs. 

When aggregated, magazines represent a mass medium.  And when targeted, they can reach a precise niche audience based on demographics, lifestyles or interests.

Very simply, magazines scale up or down to meet advertisers’ needs.

So myth three is easy to dispel. If I leave you with only one thought today, it’s this… I believe magazines are the original mobile device!

Now, I’d like to welcome Jack Griffin, President of the National Media Group at Meredith Corporation, to continue the debate…

[HAND-OFF TO JACK]

[Jack Griffin portion]

Good morning everyone.  Great job, Ann. I’ll take on the next batch of myths…

Myth number four…
All the excitement and innovation are happening online.  Consumers are in control… they’re the authorities… and they search and seek the information they want on the Internet.

Not so…The fact is that consumers still cherish a well told narrative. They value someone else curating their reading experience in a way that delivers deeper understanding, insight and perspective. 

They appreciate how magazines provide a comprehensive digest of the news with a point of view.  They love that magazines chronicle the events and experiences that impact their lives with stunning pictures and powerful words…

Elections… wars… elation… defeat… humor… sadness… accomplishments… and foibles.

Magazines help us do our jobs…enjoy our passions… advance our causes… hone our skills… improve our lives…plan our vacations… and raise our families.

Magazines do this like no other medium, in ways that enable us to better understand, appreciate and define ourselves.  No other medium really accomplishes this in quite the same way.

The magazine industry is continuously changing and innovating.  New printing technologies enable magazines to get to market more quickly and to customize editorial and advertising content to fit subscribers’ unique interests and passions.

Technology has also yielded new cover options, such as the first-ever digital cover, for Esquire, and the first-ever interactive 3D cover, for Popular Science.

This past year, consumer magazine companies announced dozens of digital initiatives, including iPhone and other cell phone apps, video for websites and mobile devices, Twitter feeds, content-sharing partnerships, integrated marketing initiatives and online social networks.

In late 2009, five publishers – Condé Nast, Hearst, Meredith, News Corporation and Time Inc. – announced an exciting joint venture – called Next Issue Media – to develop open standards for a new digital storefront and related technology that will allow consumers to enjoy their favorite media content on portable digital devices, as well as purchase print subscriptions online.

Here’s what we are doing with Next Issue Media:

Creating a highly featured digital reading application capable of rendering the distinctive look and feel of each publication;

Developing a robust publishing platform optimized for multiple devices, operating systems and screen sizes;

Building a consumer storefront offering an extensive selection of reading options;

Importantly for you and your clients, offering a rich array
of immersive and customized advertising and marketing opportunities.

You’ll be hearing more about this initiative later this month.

Magazine brands are voices of authority, and they reach readers who are influencers and opinion leaders. That’s a powerful combination – a core reason why magazines have such a huge cultural impact.

Heavy magazine readers are far more likely to influence family and friends across a range of product categories than are heavy users of other media.

The bottom line is that magazines excel at reaching people who shape attitudes and behavior.

Myth number five.  Readers interact and engage online – not with magazines.
 
As we all know, there is a big difference between interaction and engagement.  While the Internet may be the place for interactivity, magazines are the number one medium of engagement – across all dimensions measured.

Research shows that the average magazine reader spends 43 minutes reading each issue.  In addition, they are much less likely to engage simultaneously with other media or take part in non-media activities compared to users of TV, radio or the Internet. They concentrate!

In addition, magazines score significantly higher than TV or the Internet in ad receptivity and all of the other engagement dimensions, including being “trustworthy” and “inspirational.” By definition, magazine purchasers have opted-in, they have paid, and they consider advertisements to be part of the overall content experience.

Isn’t that what we are all looking for?

When consumers were asked to rate media based on how likely they were to pay attention to the advertising messages within their respective environments, magazines were number one for total adults age 18-64, and a close number two among adults 18-24.

Magazines also strongly influence word of mouth, and are most likely to complement the Web in reaching social networkers who build buzz.

In addition, magazines excel in driving web search. They perform better than any of 12 other media at influencing consumers to start a search for merchandise online – far ahead of Internet and email advertising, online communities and word-of-mouth.

In a nutshell… magazines are the medium of engagement… the medium of today.

Finally, myth number six… Magazines have devalued their content by giving it away for free on the Web.

Like every other medium, magazines have been adapting to the Internet Age and its “information wants to be free” mantra.  We’ve built sites and posted a great deal of free content online under the ad-supported model.

But accessing this content on the Web is an entirely different experience than reading it in our publications. Consumers recognize this difference and value the immersive reading experience that magazines provide. 

And that’s why they pay for our brands – week in and week out, month in and month out – through their subscriptions and single-copy purchases at the newsstand.

Circulation generates more than 40 percent of all magazine revenue: nearly $10 billion.

And beyond paying for subscriptions, consumers spend more than $93 million each week at retail on single-copy magazines. That's $3.1 billion annually.

When consumers buy something – when they personally own it – they value it. With magazines, they make time in their busy schedules to fully consume the content they’ve purchased. They understand that great brands matter… and that real fact-based information is not free.

Advertisers benefit from the deeply entrenched bond that consumers have with magazines.  It provides a special, intimate environment for brand building – one that’s unmatched by any other medium.

[PAUSE]

OK, we’ve busted the six magazine myths, and now we’re ready to explain how we’re going to tell the story of magazines’ strength, vitality and impact to the world.

And to reveal how we intend to do that, I’m delighted to welcome to the stage Cathie Black, President of Hearst Magazines.

[HAND-OFF TO CATHIE]

[Cathie Black portion]


Thanks, Jack.  I have the pleasure of unveiling one of the largest print and digital advertising campaigns ever created to promote the vitality of magazines as a medium. As publishing leaders, we felt it was important to set the record straight and reinforce the fact that the magazine business is vibrant and innovative, despite
the changes and challenges the industry has faced.

Our campaign, aimed at our consumers has the full support of the Magazine Publishers of America, targets readers... who,
of course, are our advertisers, and agency partners, shareholders and industry influencers. 

Created by Y&R New York, it will appear in the magazines of our five publishing companies, as well as Active Interest Media, American Express Publishing, Bonnier Corporation, Emmis Publications, ESPN, National Geographic, New York Magazine, Martha Stewart Omnimedia and other third-party sites in the food, shelter, sports, entertainment, fashion and news categories. At last count nearly 100 magazines were asked to run the campaign.

The advertisements will begin in April with weekly titles,
and later that month, when the May monthlies go on sale.

For the first time, we as publishers will be speaking directly to the advertising community and beyond, using the most powerful medium we have – our own titles – to convey how vibrant and dynamic magazines are.

The campaign contains two separate but connected executions. The first features spreads with intriguing headlines and short essays about the power of magazines, accompanied by iconic photographic images lifted from the pages of America’s best-known titles.

Let me share one of these spreads with you now…

This memorable photo of Michael Phelps is accompanied by the headline – We Surf the Internet. We Swim in Magazines.

Here is the copy for the essay…

The Internet is exhilarating.  Magazines are enveloping.  The Internet grabs you. Magazines embrace you. The Internet is fleeting.  Magazines are immersive. And both media are growing.

Barely noticed amidst the thunderous Internet clamor is the simple fact that magazine readership has risen over the past five years. Even in the age of the Internet, even among the groups one would assume are most singularly hooked on digital media, the appeal of magazines is growing.

Think of it this way: during the 12-year life of Google, magazine readership actually increased 11 percent.

What it proves, once again, is that a new medium doesn’t necessarily displace an existing one.  Just as movies didn’t kill radio.  Just as TV didn’t kill movies. An established medium can continue to flourish so long as it continues to offer a unique experience.  And, as reader loyalty and growth demonstrate, magazines do.

Which is why people aren’t giving up swimming, just because they also enjoy surfing.

The ad includes our special Magazines logo which, as explained earlier, fuses distinctive typographies of multiple magazine titles from our five publishing companies into a wonderfully recognizable mark.  And we have a new memorable and commanding tagline… The Power of Print!

Alternating with these essay ads will be a second execution that in a different but extraordinarily creative way, refutes the magazine myths.

This execution weaves the names and covers of many favourite consumer titles into a compelling narrative. 

Here is the copy…

You might think that in these WIRED times, PEOPLE don’t read magazines anymore, that with the ALLURE of the online world, magazines have fallen out of VOGUE.  But it’s not true.

From SEVENTEEN through their SUNSET years, folks are reading MORE magazines than just a few years ago. 

Sure, there’s a FORTUNE being spent online.  But there’s also a lot of SMART MONEY being spent on magazines, with nearly 300 million paid subscriptions.

Our two types of executions will alternate in nearly
100 top titles of the five publishers, including Glamour, Vogue and The New Yorker from Condé Nast… Esquire, Oprah and Harper's Bazaar from Hearst… Better Homes and Gardens, More and Parents from Meredith… Time, Sports Illustrated and Fortune from Time Inc. and Rolling Stone, US and Men’s Journal from Wenner Media and so many more.

Beyond placements in a huge array of magazines, there will be a digital strategy to support this campaign as well all throughout 2010, reaching approximately 112 million readers per month. That's three quarters of a billion ad impressions.

By far, it’s the largest campaign the magazine industry
has ever undertaken!

[PAUSE]

It’s been our distinct pleasure to unveil this campaign to all of you this morning and to bust the many myths that permeate the dialogue about magazines. 

It’s especially appropriate, we think, that you’ve given us the opportunity to start changing the conversation at this 4As Conference – an event entirely devoted to transformation, and to exploring the many ways that brands can more effectively communicate with and influence consumers.

These are not just magazine titles... These are Brands, each standing on its own... some more than 100 years of age... that communicate and connect with readers-- your consumers and customers-- in important ways.

Week in and week out. Month in and month out. They deserve -- let me say demand... your renewed interest and exploration.

Thank you for your attention. We look forward to continuing the conversation with each of you!

 

Cathleen Black, President, Hearst Corporation
Jack Griffin, President, National Media Group, Meredith Corporation
Ann Moore,
Chairman and CEO, Time Inc.

Transformation 2010

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