Advertising, as with many industries, remains in the midst of a recession despite the White House's statements there have been signs of recovery.
January's unemployment rate remained virtually unchanged from December, decreasing .03% of a percent. However, it still hovers close to 10 percent, and both agencies and media outlets are feeling the weight of the recession as they lose viewers, subscribers, and advertisers.
Several newspapers have ceased publication, opting to continue their operations online. Some magazines have not been as fortunate. Several produced by Condé Nast went under in 2009: Gourmet, Cookie, Elegant Bride, and Modern Bride.
Overall, 428 publications ceased printing during the year. In 2008, 525 magazine titles closed their doors.
Newspapers and magazines have fought declining circulations for years, but with the added burden of a poor economy, consumers are cutting nonessentials out of the budget.
Many magazines have had to shut down as their circulations have dipped far below their rate base. (Rate base is a guarantee from publishers to advertisers that a publication will maintain a certain circulation level over a six-month audit period.)
For the last six months, the titles that fell below their rate base included Reader's Digest, Playboy, Harper's, In Touch, First for Women, OK!, Star, Ebony, and Jet.
According to Media Life, the Audit Bureau of Circulations (ABC) reported 206 paid and verified rate bases, and of that number, 24 fell below their rate base.
Magazine publishers, of course, blame the economy, yet they face a no-win situation. As both circulation and advertisers decline, publishers are forced to raise single-copy costs. Increasing a single issue's cost decreases newsstand sales and subscriptions, which, in turn, forces publishers to recoup this new loss in revenue.
Further adding to a publisher's woes is that this rate-base drop is technically a breach of contract, and now they're put in a position that requires them to refund their advertisers due to under-delivery. Usually, this credit comes in the form of no-charge ads.
Agencies, now aware there is a problem, will avoid placing ads in the publication, as a large drop in circulation is usually a good sign that a publication is in big trouble, further dooming the overwhelmed vehicle.
I'm guessing this is not the time to mention rising competition from online and social media sources.