www.fipp.com April 2007 | Magazine World | 23
China
Advertising
Model behaviour
China’s ad-driven magazine models are alive and well – for now,
says a cautious Jeff Sprafkin. But stick to the ‘Thud Factor’ and
‘Bandwagon Effect’, and you can’t go far wrong
S
ome 10 years ago, my publisher’s advice on selling
space in my newly launched Chinese titles was
simple: It's all about the ‘Thud Factor’ – referring
to the thickness and heft of an issue; and the
‘Bandwagon Effect’ – the popularity of a title among
competitors and same-category advertisers. Today, glossy
titles flood China’s newsstands and those two principles
still determine the market’s winners and losers. China’s
two magazine business models continue to run in parallel:
an ad-driven model that’s the mainstay of most foreign- and talent shortages mean that circulation-driven titles
affiliated, premium-tier publishers – Trends, Hachette, IDG lag substantially behind in both consumer- and advertiser-
and Rayli; and a circulation-driven model that’s the domain focused promotion, design upgrades and editorial
of traditional, mass-market titles such as Readers, Bosom development, with China’s strongest talent in terms of ad
Friend, Story Club and thousands more. sales, editorial and media management all drawn to the better
In terms of revenue and profitability, China remains an ad- funded, internationally affiliated and commercially run titles.
driven magazine market with relatively few hard metrics for But perhaps the biggest barrier to capitalising on many
readership and circulation. A quick look at ad-buying criteria and circulation-driven titles’ readership and established brands
local magazine economics implies that ad-driven models lead is the perception that these mass-market titles don’t
the largest categories – fashion, automotive – for the foreseeable effectively reach the newly affluent ‘white-collar’ urban
future. But recent reader engagement and media usage research readers at the top of most media buyers' shortlists.
suggests that tomorrow’s winning business models will need to
boost their focus on readers and content in order to maintain
brand competitiveness and tap new opportunities. Ad-driven magazine
models dominate
Limited profits for Ad-buying criteria, economics and talent shortages are likely
circulation-driven titles
to ensure that ad-driven models continue to dominate in
the near future. As Table 1 indicates, ad-revenue growth and
Despite strong reader engagement and real per-issue reach page growth continue to far outpace circulation growth in
that can easily top one million, China’s circulation-driven the largest category. Research among China-based ad buyers
magazines lag far behind their ad-driven counterparts in indicates that title selection and ad-purchase decisions are
financial performance. Our reader engagement research often influenced by magazine brand, product relevance and
found that mass titles such as Readers and Family consistently publisher flexibility in bundling advertorial with ad-page
ranked among readers’ top five favourite titles across most purchases. Typically, unaudited and frequently embellished
major demographic and psychographic segments. With circulation figures make actual circulation and readership
circulation ranging from the mid-hundred thousands to the secondary factors in most magazine selection processes. As
low millions per issue, these leaders are a notable contrast a result, thicker issues – ‘Thud Factor’ – and abundance
to the fragmented base of several thousand low-cover-price, of similar brand and category ads – ‘Bandwagon Effect’ –
low-page-count, low-production-quality, circulation-driven remain important to magazine profitability. China’s fashion-
titles that cover newsstands across China’s emerging title growth provides beefy evidence: average-issue page
second-tier cities, but which face increasing threats to growth leapt ahead by more than 21 per cent between 2003
their survival. and 2006, as a mix of ad-page growth and editorial increases
For both large and small players, the growth of circulation- pushed many Cosmopolitan, Elle and Rayli issues well over 400
driven models is hobbled by several factors. The first is falling pages. These monster editions send powerful messages: heft
subscription levels and fragmented distribution networks. and strong advertiser support, which appeals to ad buyers;
With an abundance of richly packed newsstands, readers are and to readers, hundreds of pages of reading value for a
losing patience with postal subscriptions where titles often cover price of Chinese Renminbi (RMB) 20.
reach them five to seven days after they have appeared on More importantly, ad-driven, premium titles are generally
sale, particularly where no subscription discounts are offered. viewed as some of the most effective media for reaching
Then there’s the rising competition from a growing variety targeted, affluent consumers. Recent research confirms that
of glossy, ad-driven titles that are increasingly affordable increasingly, targeted titles – particularly in niches such as
to China’s newly affluent middle classes. Limited funding fashion, home decor, travel and automotive – continue to
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