Among the many disruptions to the fashion industry caused by coronavirus is that fashion’s traditional seasons have been thrown into disarray. Some brands are foregoing summer collections entirely and skipping straight to fall, while others are planning to release fall collections early, late or, in some cases, not at all. In turn, come August and September, when brands would normally be going all out to promote their biggest collections, advertising will be much more modest than in years past.
For fashion magazines, the September issue that focuses on fall fashion is usually the biggest event of the year, as immortalized in the 2009 documentary “The September Issue” about the 2007 September issue of Vogue. With reduced fall fashions to promote and minimized ad budget to spend, those publications will be forced to slash ad rates.
On Monday, Condé Nast internally announced pay cuts of 10-20% for every employee making more than $100,000 a year, which makes up a little less than half of the company, and 20% for the entire executive team. According to the internal announcement, the company will also furlough an undisclosed number of employees and Condé Nast CEO Roger Lynch said that layoffs were a last resort but likely to happen in the near future. On top of that, Reuters reported that many fashion shoots that would normally be happening now for issues coming later this year are being canceled.
“It’s very likely our advertising clients, consumers, and therefore our company, will be operating under significant financial pressure for some time,” said Lynch, in the internal memo.
A lack of advertising will be a hindrance to Vogue’s ongoing efforts to make its September issues larger each year. The 2007 September issue of Vogue covered in the aforementioned documentary was over 840 pages and weighed nearly five pounds, making it the largest national magazine ever published, until 2012 when Vogue published a 916-page September issue. The length is a selling point for these issues, with a label on the front usually touting its impressive length. But the September issue can be among the most ad-heavy, with more than 75% ads as opposed to 50% of a typical Vogue issue.
“Because there are already furloughs and layoffs, the publishers are anticipating ad sales drying up pretty significantly,” said Ava Seave, principal at Quantum Media. “It’s obvious they think loss of advertisers will impact their ability to make money. They could raise their subscription prices, but they will only see revenue from that down the road when people renew their subscriptions or new subscribers join.”
Subscriptions have increasingly become an important source of revenue for fashion magazines, to the point where a loss of ad sales is not a complete death sentence. In 2019, Meredith, which owns the magazine InStyle, saw its subscription revenue surpass ad revenue, according to its 2019 earnings report. Ad revenue was $690 million, while subscription revenue was $693 million. Vogue has also introduced new products and revenue streams, like its annual Forces of Fashion summit. (On Monday, Vogue announced a free, registration-only Zoom conference featuring big names like Virgil Abloh and Pete Nordstrom.)
Fashion magazines, whose ads are notoriously expensive, likely will also be forced to change rates. In 2019, the average cost for a single page ad in a national magazine was nearly $250,000 according to an estimate from WebFX.
“Digital marketing has become a lot more effective since all this started,” said fashion writer Christina Binkley. “I know it’s all in flux, but the bottom line is that there’s going to be a lot less advertising and they’ll probably have to drop ad rates tremendously. They might even have the same amount of ads as normal, but bring in far less revenue if they charge less for them, which they’ll have to do. The big magazines have always been aggressive about twisting people’s arms and getting every dollar out of them for these ads, but they won’t have that kind of leverage anymore.”
Condé competitor Hearst Media has prided itself on bypassing layoffs and furloughs so far, but U.K. CEO James Wildman said the company is expecting a drop in advertising spend through the rest of the year. Neither Condé Nast nor Hearst responded to requests for comment on this story.
When the September issues hit, mainstays like Louis Vuitton will likely still be present, albeit far less so than usual, but massively reduced ad rates could mean smaller brands and designers will get placements where they previously couldn’t, Binkley said.
But they can only lower those rates so much.
“The thing is, a magazine is a physical product,” she said. “No matter how much you cut ad rates, there’s a minimum cost for physically producing and distributing it.”