Topic 4: Magazines Economics
Topic 4: Magazines Economics MC 101-740
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This 4 page Study Guide was uploaded by Destiny Giebe on Monday February 22, 2016. The Study Guide belongs to MC 101-740 at Southeast Missouri State University taught by Frederick Christopher Jones in Spring 2016. Since its upload, it has received 48 views. For similar materials see Mass Comm & Society in Journalism and Mass Communications at Southeast Missouri State University.
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Date Created: 02/22/16
Magazines: Economics I'm sure you look at yourself and think -‐ "I'm a unique individual. There's no one else just like me." Sorry, but to the magazine industry, you're just a statistic that fits neatly into a variety of consumer groups. Welcome to demographics. DEMOGRAPHICS Demography is the study of human populations and their social characteristics. Simply put, there are people out there trying to categorize you. Magazines use demographics all the time, because they help in targeting a potential market. Here are just a few of the ways they categorize you -‐ I've also included examples of magazines that fit into each demographic group: • Age -‐ “Seventeen” for teenage girls • Gender -‐ “Maxim” for men • Race -‐ “Ebony” for African-‐Americans • Religion -‐ “Christianity Today” • Wealth -‐ “Fortune” for rich people (or wanna-‐be's) • Occupation -‐ “The Mailbox” for school teachers • Education level -‐ “New Yorker” for the 'cultural elite' Demographics play a huge role in magazine economics. Specific ads will appear in different magazines, depending on the demographic group being targeted. And advertisers can be assured that their ads are reaching the exact group that they want buying their product. Magazines use demographics to reach specific consumer groups, like teenage girls, video professionals or new parents. FRAGMENTATION Let's take a look at how magazines specialize -‐ sometimes referred to as fragmentation. First, there are 50 categories of consumer magazines, categories like crafts, music or sports. But could there be further specialization within the sports category? Sure. You could specialize by type of sport, gender, age, skill level, etc. The diagram below gives you some idea of how quickly magazine categories can fragment: Eventually, you might end up with an amateur road running magazine for men over 50. Do you think there are a large group of people in this category? Probably not a huge amount, but there are certainly thousands in the United States. And that group would be very interested in subscribing to a magazine aimed specifically at them. What kind of products would be advertised in this magazine? Shoes, sports drinks, Viagra. These ads would be very successful, because the readers are interested in these products. What products wouldn't appear? Makeup, cigarettes, support bras. The point is, magazines can be very specialized but still remain economically viable. THE IMPACT OF ADVERTISING Have you ever started flipping through a magazine and after 100 or so pages asked yourself, "Where are the stories?" Obviously, the impact of advertising in the magazine industry is immense. About half of all magazine revenue comes from advertisers. Not surprisingly, about 50% of all magazine pages are devoted to ads. The sad thing is, sometimes the ads are more entertaining than the articles. A popular trend is the use of advertorials. These are ads that are disguised as articles. A teen magazine might have an "article" on beauty tips -‐ but in actually it's an ad for Maybelline. And of course, all of the keys to beauty are dependent on using only the finest Maybelline products. Needless to say, many groups find advertorials deceptive and would like to have them banned. Some critics feel that advertisements occasionally affect the content of magazines. Many magazines won’t write anything critical of certain companies, for fear that they'll lose a major source of revenue. This happened to "Fortune" magazine. They published an article about the CEO of IBM, in which they referred to him as arrogant and obsessed with status. The CEO, upset with the article, pulled ads from the magazine and "Fortune" lost $6 million. It's this kind of financial pressure that prohibits magazines from being critical of companies. TRENDS IN THE MAGAZINE INDUSTRY The magazine industry has examined you, labeled you, dropped you neatly into your little demographic group. Now how do they reach you? One of two ways -‐ the first being through paid circulation. This includes subscriptions or single copy sales. You know when Publishers Clearing House sends you that sweepstakes letter, and you buy subscriptions for some stupid magazines that you never read just because you think you've won $20 million? That's an example of paid circulation. The other way is through controlled circulation. Basically, you get the magazine for free. Pretty sweet. So how do the magazines get paid? Advertising revenue. After the birth of my daughter, I was sent countless free baby magazines in the mail. They included handy articles on how to burp your kid -‐ and hundreds of ads for baby products. And I probably ran out and bought half of the things I saw in that magazine because I was delirious from sleep deprivation. That was an effective use of controlled circulation. Another outlet for the magazine industry is the webzine -‐ which is basically an online edition of a magazine. The cool thing is, the Internet can really supercharge these magazines, offering special interactive features that aren't available in a hard copy. Some webzines, such as Salon and Slate, are found exclusively on the Internet. However, most Internet exclusive webzines have trouble pulling in enough ad revenue to survive.
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