International greats are launching in South Africa and local business magazines are revamping and looking for new selling points. Glenda Nevill finds out what is happening in this sector.
Forbes Africa has galloped into the South African business magazine space, flying its colours unashamedly. It claims to be a “key title that aligns a sophisticated target audience with the world’s leading brands”. A glossy challenger with an international pedigree, it comes with major financial backing and a solid history of success around the world.
With established titles already reeling from hard knocks in circulation, advertising revenues taking strain and the demands of digital taking their toll, this wasn’t great news for South Africa’s business magazines.
“In terms of consumer magazines in the business and news sector, the latest ABCs show that overall the category remains stagnant. Well-known titles such as Financial Mail (-2%), Finweek (-8%) and Noseweek (-12%) continue their slide,” says media agency expert Gordon Muller. “Forbes Africa offers the only real momentum in the category but with ‘subscriptions’ and ‘single copy sales’ accounting for only 30% of total circulation and the balance being ‘non-requested free bulk’, it’s questionable whether this represents a significant shift in reader behaviour,” he says.
“All in all though, the dominance of FM in this market is over. Forbes Africa? Any business-to-business (B2B) title is going to take from the pie. There is no more growth for the sector. The new generation of young executives is going to be increasingly digital. Even the Business Day that I read every day is at least 12 hours old when I get it, but my RSS feed/news is in real time. How much more does this impact on weekly content?” Muller asks.
In the Audit Bureau of Circulation’s fourth quarter 2011 (Q4) figures released in February 2012, the FM was down from 25 152 to 24 514; Finweek moved down from 28 443 to 26 241; while Succeed moved up, from 20 894 in Q3 2010 to 22 164 in Q3 of 2011. This followed a 12 % increase last quarter too. But in Q4 it too took a minor hit, moving down from 21 671 to 21 254.
Entrepreneur was the big winner in the last quarter. From 16 718, its total circulation is now 22 463.
“It is a tough time for magazines in general and business magazines are no exception. Since 2008 we’ve seen a decrease in the number of business-to-business magazines available as publishers close unprofitable magazines,” says Ilan Lazarus, a director at MOST award winning agency, page three media.
And Lazarus is not so optimistic about a short-term recovery. “This is likely to continue in the current economic environment, but new business magazines can still launch successfully, although their offerings would need to be credible, exceptionally well-produced and enjoy sufficient marketing budgets to generate rapid hype and awareness,” he says.
Business magazines aren’t lying back and thinking of the successes of days gone by. Finweek and the FM recently underwent revamps and both are involved in developing their digital models, particularly looking at apps. Cape Media – which publishes Leadership – is about to launch the first digital interactive folio magazine in Africa.
“This is not merely a PDF reproduction of the print version (there are already PDF page turning versions archived on our various magazine websites), but a digital multimedia magazine completely redesigned for the tablet market. These free magazines will be available in the iPad, Android and Blackberry App Stores for download,” says creative director, Brent Meder.
Even with the recent burst of activity in the sector, Finweek editor Marc Ashton believes the business magazine space has by no means reached saturation point. “I will repeat the statistics I have pointed to in the last few months – South Africa has a savings rate of 0%, one of the lowest levels of entrepreneurship in the world and less than 2% of the country manages their own money. There are huge opportunities for growth in the business media space. The challenge is going to be around getting business content to readers including using social media, digital and mobile content,” he says.
Tshego Malinga, marketing manager for BDFM, which publishes the Financial Mail (FM), says although print might have reached saturation point, digital most certainly hasn’t. “We are seeing more and more demand for digital business content. We are a content brand not limited to the print platform,” she says. “We view our digital business as another entry point for our readers; our business structure is such that our digital strategy does not operate independent of the overall content business.”
Ashton says Finweek didn’t have a digital strategy until he took over as editor. “We’ve used social media to drive digital subscriptions via Zinio and Mysubs. We’ve also rolled out the FinTalk.co.za site, @Finweek Twitter feed and Finweek Facebook group that we use to feed content, create social media dialogue and drive digital subscriptions,” he explains.
Succeed’s publisher, Wessel Ebersohn, says the magazine hasn’t gone large on digital. Yet his circulation remains steady. “It’s cyclical,” he says. “It’s our ‘how to do things’ stories that keep our readers growing. Many people have been compelled to start businesses due to retrenchments. Succeed isn’t a comfortable read; we carry the wisdom of clever people so our readers are reading us because they want to.”
Ebersohn says he has instituted a digital version of the magazine, but he says “despite the hype” subscriptions are low, at 4%. “The cost of subs are lower for digital so it’s cheaper but in SA, our readers go for print.”
He says Succeed’s reader profile has changed. “We have more women readers now. Our age group is 25 to 55.”
This is something borne out by Leadership editor Robbie Stammers who says the magazine’s readership has changed “dramatically” over the last few years. “Leadership used to be read by over 80% male readers and now that demographic has changed to almost a 50/50 male/female ratio, which shows how the dynamics have changed in leadership roles across all spectrums over the last decade,” Stammers says.
Ashton says the profile of the Finweek reader has changed, and the magazine has changed to suit the reader. “The average Finweek reader is around 32 years old and 60% black,” he says. “Instead of focusing on traditional investors, we need to be developing content for those who are employed and to whom their job is their greatest asset. The financial crisis has probably also had an impact on the type of reader who is now looking for less high level investment commentary and more in the personal finance space.”
The FM reader profile hasn’t gone through significant changes, says Malinga. “It has changed slightly with the introduction of our online platform.” Editor Barney Mthombothi, in a press release announcing FM’s redesign, said “The Financial Mail is long-established as a must-have periodical not only for the discerning businessperson, but anyone who takes an interest in the world around them and desires a well-balanced, intelligent – and entertaining – read.”
Richard Procter, joint MD of media agency, Vizeum, says that while business magazines are a “niche market, they attract top-level corporate interest as the corporates are also their readers. They have always been almost like cash cows to advertising revenue vs. the size of circulations. This will be a position to defend.”
He says advertisers are opting for print and digital. “But increasingly, more digital platforms are making sense. From a magazine upper income, tablets and apps will become a threat, as this is the first reader user-friendly hardware device. The Kindle started this.”
Procter says he still supports FM and Finweek as the “well established titles”. But, he says, he’ll be keeping an eye on Forbes Africa and the Daily Maverick’s iPad newspaper, iMaverick.
Lazarus believes the entry of Forbes Africa into the market will impact on advertising revenue. “Magazine ad spend is already under pressure and Nielsens confirms its share of ad spend decreasing over the past five years, so the launch of a highly credible platform such as this will undoubtedly fragment the environment further and affect the existing titles.”
In its first showing in the ABCs, Forbes Africa – a new member – reflected a total circulation of 14 462, but its free copies stood at 10 000.
“Online has shown consistent ad spend growth over the past few years. According to Nielsens, it has overtaken cinema in terms of share of ad spend,” says Lazarus. “However, it is unlikely that advertisers are switching entirely from print to online but rather dedicating a portion of the budget to online advertising, depending on the category.”
Leadership’s Stammers says despite the tough conditions, their advertising has grown. “Our advertising revenue has grown by a staggering 33% per year over the last three years so we are fortunate to not have felt the pinch. Who said print is dead?” he asks.
It’s not a position Ashton finds himself in. “Advertising has been hit hard on most channels except online. Bearing in mind that I only came into my position seven months ago and as part of a relaunch, I think the best way to answer this is to say that I have worked hard with our sales teams to restore trust in the brand,” he says.
“I get the sense that advertising is tough and advertisers are looking for dynamic approaches to advertising rather than simply splashing down a page and hoping for some response,” Ashton says. “I think that is going to be one of those things that we’re going to need to get our heads around as a publication to ensure we continue to grow.”
Malinga says the FM is “delighted” with its advertising performance “especially in the current economic climate. “Advertisers are interested in engaging the FM readers. Advertising follows circulation and when the product declines, advertising follows suit. We are in recovery.”
This story was first published in The Media magazine.