fipp.com Q4 2008 | Magazine World | 11
cover story
Diffi cult decisions will have to be made
ADAPT AND
Pierre Lamuniere CEO, Edipresse Group, Switzerland
T
he impact of the current Globally speaking, tougher and forgetting the need to continue to
crisis depends on which more expensive credit leads to produce high quality products.
markets we are speaking about. cash flow challenges. We have Difficult decisions will have to
For Edipresse, in Eastern Europe seen that when this happens, be made requiring publishers to
and Asia there has been only advertising and marketing adopt a smart portfolio strategy,
SURVIVE
a marginal impact to date. It is budgets are the first to be cut which includes defending our
too early to tell whether this will when companies are forced to top brands while not hesitating
change for the worse. adopt aggressive cost saving to close weak underperforming
My feeling is that these measures. titles. It is also important
markets will be affected, but While digital is still very that we adopt a long term
less so than in more developed encouraging, we have to perspective. This means that
markets. In Switzerland, the remember that in absolute terms; we have to be ready to accept
crisis has had a moderate impact. digital revenues are still very a decline in profitability and to
In Spain, which is one of our small compared to print for most keep ourselves robust and well
larger markets, the economic publishers. positioned for when the economic
downturn has led to decreases in Strategically, the starting point cycle changes direction and when
advertising and copy sales. is controlling costs while not growth does kick in.
Three-pronged performance plan Ensure market share remains strong
Steve Lacy CEO, Meredith, USA
Peter Phippen Managing director, BBC Worldwide, UK
continues to impact the demand increased inflation. The situation
for advertising, the other areas there is certainly is not as serious
of our business remain strong. as in the UK, although there are
Our circulation is solid. Our non- signs of a slowdown.
advertising related businesses, Adspend will be the biggest
particularly Meredith Integrated area hit – it is down year-on-year.
Marketing and brand licensing, However, it is a varied picture, with
are posting strong revenue and the home interest sector having a
profit growth. difficult time, as is mass market,
Meredith is executing a but Top Gear remains strong with
three-pronged plan to address revenues up.
T
he second half of 2007 was the current environment. Our We don’t expect a dramatic drop
very strong for Meredith, with strategies include: T
here is no doubt it’s a difficult
market for all magazines in in copy sales or subscriptions.
magazine advertising revenues 1. Special sales incentives and the western economies at the We are better placed than many,
up more than 10 per cent – double new marketing programmes to moment. And there is a double as most of our titles are sector
the industry average. We started maximise market share in our impact: softening consumer leaders which will be
to see slippage in the first quarter core publishing and broadcasting confidence is impacting revenues, less-affected.
of 2008, and then felt the full businesses. while costs, like paper and Digital ad revenue continues to
brunt in the second quarter, when 2. Aggressive expense postage, are rising. see growth, but at a reduced level.
ad-revenues dipped 20 per cent. management, including tight I can’t say how long it’s going Going forward, we will continue
This trend has continued into the control of labour and vendor to last, but 2009 is going to be a to produce fantastic magazines
second half of 2008. costs. difficult year. There were signs of and outstanding websites. We will
Companies that operate in 3. Revenue diversification a softening in the UK advertising focus on growing market share
Meredith’s advertising categories initiatives to accelerate growth market before the banking crisis. and being market leaders. And
– including food and beverages, of new revenue streams, many BBC Worldwide has a strong we will continue to invest in our
prescription and non-prescription of which are not dependent on presence in Australia and India. brands. We will also work hard on
drugs and home – have been traditional advertising. These Australia is in a similar situation the things the consumer doesn’t
impacted by the current economic include our integrated marketing to the UK, although it is difficult see. The back office will be run
downturn. However, these and brand licensing operations. to say as we have only recently more tightly and carefully. We
categories have historically We’ve also invested in new tools launched there. The market aren’t recruiting at the same pace,
outpaced advertising industry and platforms across our 40- in India is still pretty buoyant but have not had to lay anyone off.
growth rates, and we hope they plus websites and broadened – ad revenues continue to grow, Adopting this approach, we can hit
will serve us well in the long-term. the reach of Meredith Video although the market is being hit by budget and maintain profit targets
While the weak economy Solutions. the rising costs of materials and in 2008.
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