Rick Spence thought it was an easy call. The editor of Profit: The Magazine for Canadian Entrepreneurs was preparing a special annual issue on Canada’s 50 fastest-growing companies last year, and had selected the top entrepreneur after sifting through hundreds of entries. He got in touch with the nominee and arranged to have a cover photo taken. The winner, much gratified, sniffed opportunity. He phoned the magazine’s advertising department to book space on the inside front cover and facing page of the issue that featured his company. The advertising sales director asked Spence if there was any conflict between the ad and editorial coverage. “I thought about it for a moment and said that I didn’t have a problem,” Spence says. “If this guy wanted to pat himself on the back, I thought that was fine.”

But when Paul Jones, Spence’s publisher, heard about the deal a few days later, he didn’t see it that way. Sure, times were tough, and Profit needed every advertising dollar it could get. And sure, the editors had selected their top entrepreneur well before he expressed any interest in placing the ad. Just the same, Jones argued, readers wouldn’t know that and they could put a fishy interpretation on the juxtaposition of the ad and favourable editorial. He immediately overruled Spence’s call and vetoed the ad. “I thought the presence of the ad diminished the credibility of our editorial content in the eyes of the reader,” Jones says.

Spence has thought about the situation since, and he’s ambivalent about the outcome. His publisher, he concedes, was probably right, but he’s still not sure his editorial decision was wrong. It’s easy to set a clear theoretical line between editorial and advertising, but, as Spence discovered, an editor’s call on where to draw the line in practice is not a black-and-white issue. Editors have long argued that editorial integrity and credibility are crucial to attracting the solid readerships that advertisers want. At the same time, editors generally recognize the importance of advertising to their magazines’ success. The problem is how to deal with these potentially conflicting interests. The magazine industry’s fight for economic survival in this last recession has intensified the difficulties editors face. Pressure to find new and innovative ways to attract advertising has brought editorial and advertising departments closer together in an uncomfortable marriage. Unlike other professionals, editors have no industry-wide guidelines on what is ethically acceptable and what is not in this uneasy relationship. That leaves editorial staffs with the ticklish job of policing their own publications-and their consciences. “In the final analysis an editor’s job is to give the reader something that’s credible,” says Matthew Church, editor of enRoute magazine. “If you produce a magazine that juxtaposes positive remarks about a company with its ad, then it’s going to be clear to readers very quickly that this is not a magazine they can trust.”

The finger of controversy has pointed more than once at John Fraser, editor of Saturday Night. Settled behind the large, dark desk in his book-lined office, he openly admits that his magazine has had problems with ads placed too close to related editorial. Take, for example, the Saturday Night issue of July 1988. It was the last month cigarette companies could run ads in the print media, and the magazine had scheduled an essay opposing the government’s ban. The tobacco companies were spending the last of their advertising budgets for periodicals,’ and Saturday Night, which had never attracted more than 12 tobacco ads a year ,had insertion orders for three in that issue-including one that ran right beside the essay. “I had a choice of saying no to the ads, or pulling the essay, or not paying attention to it,” Fraser says. “When the full panoply of what we were facing came to me, I didn’t have another essay to put in, so we just went ahead on. The grounds that it was not a situation of our own making. And We were not going to turn advertising away.” Despite Fraser’s protestations, Saturday Night was roundly criticized for that decision.

More recently, there was the case of the Born Talking television series. In the March 1991 Saturday Night, an ad touting the series was tucked cozily in the middle of an editorial feature about it. The placement, Fraser says, was an unfortunate mistake he did not notice until he looked at the final page proofs. In the original layout, the ad faced the first page of the article, but then Fraser moved it “at great expense” to the only other available position. As Fraser explains it, he was, like Rick Spence at Profit, faced with situations cloaked in grey. To his mind, there was no way of handling them that was clearly right or wrong. If these examples from Saturday Night seem troubling enough, consider the experiences of Shelagh Stanley, managing editor of Select Homes & Food. When she took the position in October 1990, she espoused the philosophy that there should be total separation between editorial and advertising. It wasn’t an easy philosophy to apply. The advertising department approached Stanley several times to write a story on wood-burning stoves that use compressed pellets instead of logs for fuel. Five manufacturers had signalled an interest in taking out ads in the magazine, but only if related editorial ran in the same issue. Under pressure, Stanley finally relented and assigned a one-page story that extolled the environmental virtues of the stoves. Friendly Fuels, Inc. is one of the manufacturers mentioned in the story, published last October, and you can easily find its two thirds-page ad in the same issue: it’s smack in the middle of the story .

The ad placement, Stanley insists, was finalized while she was on vacation. She’s embarrassed by the incident, realizing that it violates her own ethics. And she’s determined that nothing like it will ever happen again. Over the next year or so, she plans to wean the magazine’s advertising department off the temptation to lure advertisers with related editorial.

Maybe Stanley is idealistic in believing she can separate editorial and advertising interests, but at least she isn’t prevented from trying to put the philosophy into practice. Other editors are. When an advertiser buys the front cover of Kids Toronto, the magazine supplies promotional editorial in the same issue. The editorial is billed as a legitimate story, even though the advertiser may have a hand in writing it. Last August, Fort Henry, the historic site near Kingston, Ontario, bought the cover, and Kids Toronto ran a much longer story on the tourist attraction than would have appeared without the advertising. “It’s a shame,” says managing editor Leslie Garrett of such practices, but at Kids Toronto she can do little about it.

Editors like Stanley and Garrett are in a tough position. They know that their first responsibility is to their readers and that it is a cardinal sin for editors to deceive their ,. readers. In an ideal world, they could simply say “no” to requests to link editorial to advertising, and their decision would be final. But what if a magazine’s publisher or owner doesn’t share the same view about editorial integrity? Since there are no official industry guidelines that editors can cite to back their position, the situation can come down to a battle of wills, a battle in which the publisher has a distinct advantage. “You can say no, but you don’t have the power to stop certain things from happening,” says David Olive, editor of The Globe and Mail’s Report on Business Magazine. “Ultimately the editor has only one weapon, which is to threaten to resign and mean it. There are very few things, in my judgment, that would be worth hauling out that one big weapon.”

At ROB Magazine, Olive doesn’t face the dilemma of producing advertiser pleasing editorial, but he does have to live with other thoroughly modem tactics by which magazines woo lucrative and lasting relations with advertisers. For example, ROB Magazine, like many others, accepts advertorials, which are essentially advertising sections masquerading as articles. Since neither he nor his editors playa role in producing these sections, Olive loathes advertorials but doesn’t see them as a major ethical issue-provided that readers can tell the difference between advertorial and editorial. Even if the readers can, there’s no question that advertorials attempt to trade on the editorial credibility of the publications they appear in.

Some magazines have become even more innovative in trying to foster a symbiotic relationship with advertising. “We simply do not give away free editorial space to advertisers,” says Chatelaine editor Mildred Istona in a terse statement issued through her assistant. But, apparently, the magazine is not against doing special deals with them. Chatelaine has gone beyond selling just ad pages to developing marketing packages for its clients, says advertising director Reg Finlayson. For its packaged goods advertisers, the magazine will arrange grocery-store promotions for products, using the Chatelaine name as a selling point. Canadian Living-one of the few magazines to actually increase its ad page count last year-offers advertisers the chance to plug their products by donating them as prizes in the contests it runs. Canadian Living will also supply its advertisers with free copies of special sections from the magazine on which the advertiser’s name and logo have been printed. With the business side of the print media actively fishing for advertisers like this, using the good editorial standing of their magazines and papers as lures, it’s little wonder that many editors have trouble holding the line.

The economics of the magazine industry are brutally simple. Even if a periodical has a circulation in the hundreds of thousands, the business of soliciting and maintaining subscriptions and newsstand sales is rarely profitable. Magazine subscription prices, in fact, are prominent in the consumer’s basket of great bargains. According to Toronto Life circulation director Scott Bullock, the money a subscriber pays to receive a year’s worth of magazines “really doesn’t cover the cost of printing and delivering them. The person who’s paying for your subscription is the advertiser, not you.” Bullock could have made a more sweeping statement: For most magazines, the advertiser is the sugar daddy who underwrites the whole operation.
With the recession, advertisers have cut their media budgets and that’s crippled many magazines and even killed some.

According to The Auditor, an organization that monitors magazine advertising, in 1991 Canadian consumer magazines reached newsstands and subscribers with 12.1 percent fewer ad pages than in the previous year. Business publications, better known as trade magazines, were even harder hit, with a 19.7 percent decline in ad pages. In such an environment, it’s hardly surprising that magazines are chasing advertisers aggressively. And hardly surprising that advertisers would pressure magazines to get the most for their advertising dollars. Alec Paterson, account director of the marketing and communications firm Jack Stahl Associates, says that magazines can no longer rely on their positions as good, widely read publications: Prospective advertisers will now often ask “what else can you do for me ?” Maybe the “what else” is simply a deal on advertising rates. Or maybe it is a favourable editorial mention. “Advertisers have this insatiable appetite for special situations,” says Profit’s Rick Spence. “It doesn’t seem to be enough to say ‘yes, we have this good audience, we have this good editorial product.’ They always want something more.”

Small magazines are particularly vulnerable to such pressure. Reg Finlayson, advertising director for Chatelaine, figures he has a universe of 2,000 to 3,000 potential advertisers for his magazine, so if one of them asks for editorial consideration, he says he can politely say no. But that’s a luxury small magazines, especially the trade press, can rarely afford. For these magazines, the number of potential advertisers may only fall in the 200 to 300 range. “If you’re small, you depend on these people for your own success as a business,” says Michele Walter, former managing editor of Ontario Restaurant News. “The big players-the ones that bring in the big money-are not limitless.” As a result, Walter says she had to play up the importance of the big advertisers in her stories and live with the compromise.

Carol Lawless, editor of Bakers Journal, is in the same position. If she unearthed a scandal involving one of the magazine’s largest advertisers, she’d tone down her coverage of the story. “You’d say something like, ‘They’ve been serving the industry for more than 50 years. This is the first time this has happened.’ That sort of thing. You try to take it from a more positive aspect.”
Companies take it for granted that if they advertise in trade magazines, they’ll be featured in a new products section. “Normally we have more products than we have pages to highlight them,” says Heather Oliver, executive publisher of Maclean Hunter’s Canadian Hotel and Restaurant and Food in Canada. “If we have a shortage of space, which we normally do, and we have product A from an advertiser and product B from a non-advertiser, we’ll definitely go with the advertiser’s product. And why shouldn’t we? They’re investing in the magazine and they’re making our publishing possible. One hand washes the other.”
Not all advertisers, to be sure, expect such treatment, especially those that command multimillion-dollar budgets. Nissan Canada, for example, recently went on the record with its view that the media with the strongest editorial values make the most effective advertising outlets. Nissan is quite prepared to advertise in magazines that only rarely publish stories about cars-so long as the magazines have the right readership. “We don’t want to be in publications that don’t get read,” says Brian Sweeney, corporate manager of marketing, planning and advertising for Nissan. “And publications don’t get read if they don’t have the right editorial.” That basic connection between readership and strong editorial isn’t understood by all advertisers. Nor, obviously, is it jealously guarded by all editors.

The Canadian Magazine Publishers Association, which lobbies on behalf of the industry, is the closest thing the industry has to a watchdog. The association refuses membership to any publication that lacks a clear division between editorial and advertising, but beyond that has no rigorous system of monitoring members. Lynn Cunningham, executive editor of Toronto Life and president of CMPA, says she hasn’t noticed an increase in the amount of soft, advertiser-pleasing editorial. “My sense is that there has always been a certain band of magazines-both consumer and trader hat have had a somewhat loose sense of the importance of the division between editorial and advertising,” she says. “Ten years ago we had some publications that fell into that category, and today we have some as well.” But the issue, she adds, is getting more attention tight now because of several high-profile abuses in the United States.

In 1990, the Columbia journalism Review blew the whistle on Lear’s, an American magazine targeted at a female readership. The November 1989 issue of Lear’s used the public relations director of Guetlain, a well-known perfume and cosmetics company, as its cover model; what’s more, it touted a Guetlain perfume in the credit lines for the cover photograph. As CJR’s Michael Hoyt noted, Lear’s provided Guetlain with a nice supplement to the four and two-thirds pages of advertising it took out in the same issue.

But even such blatant sellouts are hard to police and impossible to punish. For example, the American Society of Magazine Editors has an established set of guidelines governing the production of advertorials-and a one-person police squad. Until recently, that was Betsy Carter, editor of New York Woman, who gave up the job when her magazine went under. She has yet to be replaced. Carter admits that she couldn’t possibly see every member magazine. If she did detect an infringement, she sent a letter and a copy of the advertorial guidelines to the offending publication’s editor and publisher. But the publication still had the option of heeding or ignoring the letter. ASME is now trying to work out an arrangement with the Publishers’ Information Bureau, which monitors ad pages, though it’s not clear that this arrangement will be any more effective at regulating its members.

The Canadian Society of Magazine Editors was formed two years ago, loosely based on ASME, but it is still struggling to formulate its mandate. Late last November, about 70 members attended a luncheon discussion at the Toronto Press Club that was supposed to come to terms with the need to separate editorial and advertising “church and state,” as the association billed the two sides. Everyone seemed to agree that there was increasing pressure to cooperate with advertisers and that this was an important concern. But as it turned out, the discussion lasted less than 55 minutes an was indecisive. The society, following its U.S. counterpart, plans to come up with set of standards covering the preparation of advertorials, though there’s no sense of how to enforce the guidelines or deal with other forms of editorial pressure from advertiser: It’s not even clear to everyone that a broad er set of guidelines is necessary. “That issue has not been raised because we wouldn’t se [giving in to advertiser pressure] as professional,” says Sally Armstrong, editor c Homemaker’s Magazine and CSME’s event coordinator. “We wouldn’t consider it as al option.” Lynn Cunningham disagree~ “When Sally says that she’s being naive, Cunningham observes. She says that in he years of teaching professional development courses she’s encountered many junior editors-and some top ones-who are simply unaware of the church-and-state rules.

Once the heart of an editor’s ethics those rules are being sorely tested these days, especially by magazines that are looking for new ways of forging profitable relations beyond the traditional buying and selling of ad space. The difficulty editor~ face, as Profit’s Rick Spence discovered last year, is that in a world in which magazine~ are under more intense economic pressure, it is much harder to come to conclusion~ about what counts as tight and wrong in editorial decision making. It’s increasingly tough to distinguish editorial ethics from editorial economics. When Paul Jones vetoed Spence’s call over that ad for Profit, in fact, the veto was as much a business decision as an appeal to principle. For Jones, editorial credibility is a business asset that shouldn’t be wasted. “Yes, it would have been nice to have a double page spread,” he says of his decision to pull the ad. “But your credibility is worth more than a double-page spread.”

Saturday Night, the magazine that hasn’t made a penny for more than 40 years, has always been a hard sell. And now that the venerable but perennially money-losing magazine is operating on a controlled-circulation basis, few media forecasters are predicting an easier economic future. At the magazine’s glitzy launch party last October at Toronto’s Royal York Hotel, David Olive, editor of Report On Business Magazine, foresaw a rocky ride. “The bigger the launch, the bigger the fall,” he said, recalling the demise of Vista, Domino, Quest and City Woman.

Under the intense scrutiny of the country’s magazine industry, consulting publisher Jeffrey Shearer has been charged with the burdensome task of turning Saturday Night, which is one of Canada’s most expensive magazines to produce and is estimated to still be losing money, into a profitable success. Shearer rode the controlled-circulation concept to heady heights with Quest and City Woman, as executive vicepresident of Comac Communications Ltd., until Quest got into trouble in the early eighties. He ought to know that controlled circulation is a hard sell.

But Shearer believes Saturday Night will not only break even, but will also see profits within the next two to five years. “We’re doing tracking studies by phone and personal interviews with readers after every issue. We’re getting an excellent response. Our targetted audience is clearly interested in this broader range of editorial material. They may not have read it before, but they’re reading it now,” he says.

Restructured from a subscriber base of 127,000 to a controlled-circulation newspaper supplement of 400,000, gracing homes with incomes of $40,000 a year or more, the new Saturday Night is delivered with selected issues of the Montreal Gazette, The Ottawa Citizen, the Calgary Herald, the Edmonton Journal, The Vancouver Sun and The Globe and Mail. Still available on the newsstand and delivered by mail to paying subscribers outside the targetted controlled-circulation areas, the relaunched magazine is a controlled/subscriber hybrid.

Patrick Walshe, vicepresident of the advertising firm Harrison, Young, Pesonen and Newell Inc., says, “It’s a quasi-controlled magazine. A magazine that will succeed is one that is really well-focused and well-niched, and I don’t see Saturday Night delivering on these scores. The key issue is not the receivership of 400,000 magazines, but the amount of time spent by its readers and how they value it.”

Janet Landreth, media group head of the McKim Media Group, explains, “Advertisers in the first few issues weren’t taking a big risk because of the huge discounting that went on.” The rejuvenated Saturday Night will have to continue discounting rates until it can assure advertisers it is not only being received but read. Nevertheless, advertising sales manager Jennifer Bedford says ad sales are strong. “In the first three issues alone, we’ve generated more advertising business than we did all of last year.”

The flashy premier issue resembled a cross between Vanity Fair and Harper’s, instead of the blend of stodginess and cultural nationalism that characterized its former incarnation. There was more lavish display of type, artwork, photography and graphics. But despite the new look, clearly aimed at a younger audience, there wasn’t much new in the new Saturday Night. Ironically, the cover, an arresting photo of Cowboy Junkies’ Margo Timmins, left the impression that the magazine was outdated. Timmins might have been hot, say four years ago, but at the time of the release of the magazine, she wasn’t on tour, nor had she produced a new record.

After reviewing the first issue, Doug Bennet, editor of Masthead magazine, didn’t think the restructuring was satisfying both new and old readers. “It’s unfocused right now. The new graphics are amazing, but it’s not known who they’re trying to appeal to,” he said. “As a result of this ambivalence, advertisers will probably wait for six months to a year before buying.”

But despite such negative predictions, there are at least a few who don’t expect the new Saturday Night to fall from the sky just yet. Hugh Dow, president of Initiative Media, agrees there is some obvious fallout from the previous readership, but he believes the magazine will ultimately attract a broader audience. “It has a sizable circulation and good editorial content.”

Joann Webb, who has been the editor of a number of publications, sees the magazine as a breath of fresh air. “I am personally excited that Saturday Night has the guts to move forward in the midst of the bleakest environment I’ve ever seen. I don’t know if they will succeed, but I sure as hell hope they do.”