Tough Sell

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In the competition between Marketing and Strategy for revenue and readers, Marketing may lose a lot more than money

ON WEDNESDAY, SEPTEMBER 23, 1992, Colin Muncie arrived at work at 8 a.m., just as he’d been doing for his close to 20 years as editor of Marketing Magazine. Marketing, the weekly tabloid that covers the media, marketing, and advertising scenes, is arguably the highest profile of Maclean Hunter’s trade books-and, at 85, one of its oldest. As Marketing’s widely respected leader, Muncie was perhaps best known as a scrappy and tenacious defender of editorial independence and integrity. Typical was his passionate March 1992 commentary “Hell No, We Won’t Go,” which lambasted the Canadian Business Press, of which Marketing is a member, for advising editors how to help ad reps flog their books at sales presentations. Muncie wrote, “To suggest that the editor be trotted in like a prancing poodle on a leash to perform at a sales pitch is as much an insult to the sales staff as it is to the editorial staff.” The piece won him the Kenneth R. Wilson Memorial Award for editorial writing in a competition open to all trade and business magazines, making Muncie the only journalist to win this honour five times.
At his own magazine, Muncie was viewed by his staff as a father figure, someone who protected them from interference, both internal and corporate. As media editor Jim McElgunn says, “He was one of those people who, when you retire, you mention in your speech as one of your inspirations.” Management also seemed impressed with his work. Just weeks before, Ken Wright, then executive publisher, had told Muncie he could expect a raise. Wright had even recently sent Muncie a memo praising him for a “brilliant” idea he’d had for the magazine.

At around 4:30 p.m. on that September afternoon, Muncie was meeting in his office with two associate editors, Stan Sutter and Margaret Bream, planning a yearend issue, when a secretary slipped a note summoning him to the personnel department under his door. “This is how they fire people,” he joked in his thick Scots brogue. It was no joke. Less than 24 hours later, Wayne Gooding, a veteran business journalist who’d most recently been editor of Canadian Business, would be introducing himself to a bewildered editorial staff as their new boss.

“It was a terrible, terrible day,” remembers Laura Medcalf, who joined the staff in 1988 and is now agency editor. “We were devastated.” When Muncie returned around 15 minutes later from personnel, he walked through the newsroom calling the half-dozen or so editorial staffers into his small office. As they filed in, Muncie didn’t look at or talk to anyone-he just stood there shifting from one foot to another, with a look on his face of shock and incredible anger. Then he told them matter-of-factly he’d been fired. “It had been a long time since I had cried about anything,” says McElgunn. But after Muncie was done, “I was actually crying.” So were most of the staff.

Perhaps the dismissal shouldn’t have come as such a shock. Since Wright’s arrival at Marketing in the summer of 1990, he and Muncie were rarely at peace. Muncie says they often fought when Wright pressured him to write “puff pieces” about advertisers. “I sure as hell didn’t cooperate with some things because I thought they were stupid and even unethical,” he says. Typical was a 1990 episode involving Air Canada. To illustrate a story, the magazine ran a graphic of an Air Canada jet in a nose dive, symbolizing the article’s take on the company’s financial state. When Air Canada, a long-time sponsor and official airline of the Marketing Awards, which honour creative excellence in the field, complained to Wright, he tried to pressure Muncie into running an apology; Muncie refused.

When fights like the one over the Air Canada fiasco erupted in the newsroom, they were hard to miss. “They would have arguments that would send us literally hovering in someone’s office like little kids who hide when their parents fight. Their screaming matches were outrageous,” says one senior editotial staffer. In the months immediately preceding Muncie’s firing, however, the two seemed to have come to some sort of truce. In fact for more than six months, Wright had been secretly courting his new editor. Why bother fighting when he knew the marriage was headed for divorce?

On the surface, the upheaval at Marketing appeared to be a simple editor-publisher clash. But Muncie’s departure was actually just part of a larger shake-up, a shake-up that can be traced to the 1989 launch of a feisty tival publication, Strategy. Within a year, Marketing was losing money after years of profitability. And since Strategy’s arrival, Marketing has been redesigned twice and has seen numerous masthead changes in addition to the editor’s spot. In all, 20 staffers have quit or been fired, while the former publisher, Ted Wilson, first had Ken Wright parachuted in over him and, more recently, was demoted to associate publisher, sales development. But despite all the changes, the magazine continues to show a deficit-insiders say its losses were as much as $750,000 in 1992 and more than $1 million last year.

These days, of course, any internal problems at Maclean Hunter are overshadowed by the media company’s own uncertain future. But the Rogers Communications takeover means Marketing is more vulnerable-the prospects for any unprofitable title in the current climate are bad. Even before the Rogers deal, Maclean Hunter had been ruthless with money-losing trade books, dropping 35 titles over the past eight years.

However, Marketing didn’t have to end up in a situation where it is fighting for survival. Muncie had sent up the warning flag months before, appealing to the top brass to take Strategy’s arrival seriously. But management wasn’t listening. So by the time Maclean Hunter got around to doing anything about it – one year later – Strategy had published close to 20 issues and was quickly making inroads into Marketing’s territory.

THE BATTLE BETWEEN MARKETING AND Strategy actually dates back to 1986. That was when Mark Smyka, then a senior editor at Marketing, quit to help Jim Shenkman, a lawyer turned rookie trade publisher, launch a biweekly tabloid coveting the broadcast and production fields. The same month Shenkman’s new company, Brunico Communications, published Playback, Maclean Hunter’s competing title, Mediascene, debuted. Even though the MH book had high production values and the might of a major publisher behind it, Mediascene quietly folded less than two years later. Playback, on the other hand, now makes a slight profit. Given that history, it is hard to understand Maclean Hunter’s snail-like pace when it first learned in the spring of 1989 that Shenkman and Smyka planned to launch a direct competitor to Marketing that September. Perhaps the torpor was due to Marketing’s having had the field to itself for so long-for years its only competition was from regional publications like Media West and Info Presse, plus Adnews, a national fact sheet-style publication.

One result was the magazine had become lazy editorially. As associate editor, news, Stan Sutter says, “From ’84 to ’90 we ran the same reports [on, for example, sales promotion] at the same time of the year. They were valid to revisit, but were just repeat, dry stories-the same stuff with updated information.” Cecily Ross, who was managing editor at the weekly in the late eighties and is now ME at Harrowsmith, says, “It was complacent, for sure. We worked hard, but it was a matter of throwing it together and getting it out.”

Another flaw was Marketing’s deserved reputation as an advertising-gossip rag that principally covered the comings and goings of creative staff and the shifting of accounts from agency to agency, even though most of Marketing’s readers come from the client side-they are with companies like Procter & Gamble, Molson Breweries, and IBM Canada. Nevertheless in old issues, headlines such as “Dominion moves all to Ogilvy” or “Dare and Dad’s whittle ad agency lists” were typical.
Smyka, from his days at Marketing, understood his former magazine’s weaknesses: “I knew there were parts of the market Marketing was not covering well enough.” Gary Prouk, chair of the Toronto agency Scali, McCabe, Sloves, and a Marketing reader for 27 years, sums up Marketing’s problem simply: “It was very, very sleepy.”

And so was Maclean Hunter. Just days after learning about Brunico’s plans for its new magazine, Muncie sent a memo to Ted Wilson, then publisher. In it he warned: “Let’s not treat this challenge lightly: Smyka is good. So is Shenkman. They are both consumed with the will to succeed. And they have lots of money. We have to fight them all out from the very beginning, so they do not gain credibility and strength and become a serious challenger.” He also remembers talking to Wilson on numerous occasions about reevaluating Marketing’s content, design, and advertising efforts in light of the imminent publication. He never got the go-ahead.

Jim McElgunn, media editor at Marketing, recalls, “Colin screamed, ‘We’ve got to do something; we’ve got to strangle them in the cradle,’ but there was a really complacent style here.” Muncie was also stymied, staffers say, by Maclean Hunter’s bureaucracy and his meagre $400 signing authority. But Terry Malden, executive vice-president, Canadian Publishing, at Maclean Hunter, puts a different spin on the company’s slow response. “You don’t just fly off in any direction just because a new publication is on the horizon,” he says. “I don’t think of ourselves as slow to react. We didn’t feel we had to turn our world upside down, so we didn’t come up with the changes until eight or nine months after the launch.”

By then, however, Strategy was a serious contender. “Maclean Hunter’s first mistake was it didn’t take the paper seriously,” says David Chilton, a reporter at Strategy from its beginning. “They didn’t respond as quickly as they should have, and now it’s too damn late. Strategy is entrenched as part of the trade book scene here and it’s not going anywhere.” Randy Scotland, an editor and reporter at Marketing from 1980 to 1991, and now at The Financial Post, also thinks the company made a strategic error. “Nothing was done in a substantive way and it allowed Strategy to get a toehold,” he says. “With Maclean Hunter’s clout, I thought we could have blown them out of the water.” When MH finally acted, its first move was to appoint Ken Wright as executive publisher. Wright, who had previously been president of Telemedia Communication’s Telemedia Results Group, the company’s recently folded direct marketing arm, swooped into the magazine to shake things up. Rumours suggest James Warrillow, president of Maclean Hunter, Canadian Publishing, owed Wright a favour from their days together at the Post in the late seventies. Whatever the relationship between the two, Wright at least had the authority-and the budget-to start fighting off Strategy.

Within weeks of Wright’s arrival, Muncie, his senior editors, the sales manager, Wilson, and Wright began meeting to plan their counterattack. Muncie remembers these “brain stress” sessions that sometimes went on for two or three days at a time at the nearby Chestnut Park Hotel. The aim of the meetings, according to Wright, was to “find a new raison d’etre.” Those don’t come cheap, but Wright had negotiated an additional $600,000 on top of the roughly $l-million editorial budget for 1990. Some of it was used to hire two more full-time editorial staffers, and between $15,000 and $20,000 went for a redesign. Another portion was earmarked for freelance photographers, writers, and international stringers. The problem was, Wright had apparently promised management he would increase Marketing’s revenues by $1 million to cover the higher costs. But the money never materialized. Instead of making the close to $400,000 profit projected for 1990, the book lost $300,000.

Some of the losses had to do with falling advertising revenue due to the recession. In fact, the entire ad industry has seen difficult times-over the past few years at least 12 agencies have folded, merged, or been bought out. But Strategy’s arrival was also a factor. Jeff Mepham, Strategy’s sales manager since last November, confirms that some clients who used to run national campaigns solely in Marketing began splitting their budget, sometimes 50-50, between the two books. He should know: he was sales manager at Marketing until May 1993-when he too was fired by Ken Wright. (Mepham and Muncie are not the only staffers or former staffers who aren’t card-carrying members of the Ken Wright Fan Club. Someone still on the editorial side remembers how Wright used to keep charts on his wall and literally measure, to the inch, the amount of copy reporters wrote for each issue. Another staffer found it so remarkable that a birthday card was passed around the newsroom for Wright that he had to call me at home to tip me off to this unprecedented event.) Meanwhile, as Marketing was busy dealing with internal politics and playing catch-up, Strategy was hustling for readers and advertisers. From the beginning it has run similar contests, and has copied such Marketing traditions as the December agency-of-the-year issue and special reports on topics such as direct marketing and what’s going on in various regions of the country. But it also brought fresh approaches to old ideas. While Marketing’s editorial staffers decide among themselves who to feature as agency of the year, Strategy holds a competition, getting the readers involved and making the report more dynamic. It also encourages lively debate in letters and columns, and often lets industry people fight it out in its pages, an approach that gives the book an energetic, shoot-from-the-hip feel. As writer David Chilton says, “We have a tendency not to be timid. We’re not reckless, but at the same time we can go straight for the jugular if necessary.”

While Strategy was developing those aggressive tactics, Marketing’s make-over gamble-the first in eight years-flopped. According to one staffer, it was a “misfire” that was done “almost overnight,” and only involved minimal cosmetic changes. So Wayne Gooding was given authority to commission a second redesign last fall. This latest effort, the work of veteran designer James Ireland (who also designs the Review) gave the book a slicker look, including a bold new red-and-black logo. “We’re serving a graphic-based industry,” says Gooding. “If you look at previous Marketing issues, you’d never know that.” And he had to keep loyal readers like Adrian Sark, vice-president of marketing for Hershey Canada, who has read Marketing for 20 years. “There is a quality element to visuals. I read Strategy and heave it into the garbage, while Marketing tends to sit on your shelf for two to three issues.” But cosmetic appeal was only one part of the September redesign-there were also editorial changes. Gooding says, given the competition, he had to make Marketing a must-read, the book people turn to every week. Stories now have more insight and relevance and there is more international coverage to reflect the global market: for example, a January 3 cover story reported on how, around the world, the ad business is coping in a changing and complex field. Marina Strauss, marketing reporter for The Globe and Mail, believes that Strategy has made Marketing more aggressive. “I think it probably runs after stories a little quicker knowing there is competition.” Laura Medcalf confirms this: “Knowing there’s another competitor out there who’s also chasing down the same story makes you make that second, third, fourth phone call.”

Gary Prouk has noticed the improvement. “It’s more spirited; it’s certainly not up to Pulitzer Prize standards, but it’s getting better.” Daniel Rabinowicz, Montreal-based vice-president of Cossette Communication-Marketing, has also seen positive changes. “It’s like they’re now trying to get more serious and more coverage of the issues, not just news.” But Cecily Ross, who worked at Marketing during the Muncie era and did a short stint after Gooding’s appointment, believes that while the magazine has taken on a tone of respectability, it is sometimes too serious. “It used to be irreverent,” she says about Muncie’s book. “It was like Variety saucy, funny, and snappy.”

Some readers agree. “I find Marketing a little mushy,” says Bill Durnan, senior vice-president and national creative director for Maclaren Lintas in Toronto. “It’s almost like a status report. Strategy is much more aggressive and brings the issues to the table more passionately.” last fall, Margaret Sutcliffe, program director of marketing at Ryerson Polytechnic University’s School of Business, cancelled the faculty subscription to Marketing after 20 years. Now Strategy circulates to the school’s professors. “Strategy is more comprehensive; it covers more of marketing,” she says. “Marketing is a gossip magazine about what’s happening in the ad agencies. I don’t think it’s digging beneath the surface.”

However, Strategy also has its critics. Because it has a full-time editorial staff of seven compared to Marketing’s 12, it relies a lot on outside contributors, many of them industry people. The result, according to some readers, are “puff pieces.” Or as Gary Prouk says, “A lot of it is not journalism. What it really is, is a compendium of stories written by people in the industry with self-interests.” An example was last fall’s magazine industry report, which asked editors and publishers to personify their books, and also gave them licence to gloat: “Maclean’s is not only a good friend, but he is the one source I can rely on for the most up-to-date information”; “I [Toronto Life] didn’t think I looked too bad for a 27-year-old, but, I must say, I look quite fresh since the redesign.”

The two rivals differ in ways other than editorial style and approach. Marketing has been backed by one of the country’s largest publishers and has a history with advertisers and readers. But it wa~ also trapped in Maclean Hunter’s giant bureaucracy, which has meant on occasion that few new ideas were accepted and decisions were made at a glacial pace. By contrast, at Strategy, says Stan Sutter, “Smyka and Shenkman can meet in the bathroom and make changes to the magazine.”

Another factor that may contribute to Strategy making what Shenkman calls a “small profit,” compared to Marketing’s continued losses, is the entrepreneurial drive that Shenkman, who owns around 55 per cent of Brunico, and Smyka, who owns about 10 per cent, partly sweat equity, bring to the venture. Shenkman commonly arrives at the office as eatly as 5 a.m. and stays for 12 or more hours. And Smyka’s days are similarly long. The book also has financial backing from Shenkman’s father, a wealthy entrepreneur who founded the International Centre, a well-established convention facility in Toronto.

Hard work and connections, however, haven’t yet given them the biggest piece of the pie. By the end of 1993, Strategy had 21 per cent. But Marketing is hanging on to its 31 per cent-though that number is down from the 40 per cent it had in 1990. (Ad pages dropped from 919 to 620 over the three years.) The two nationals now battle, as well, for readers. Strategy is a biweekly newspaper tabloid, while Marketing is a glossy weekly magazine, but they duel every other Monday on newsstands and fight for attention in the offices and homes of Canadian media, advertising, and marketing executives. And while Marketing’s book sales have been stable over the past four years, and the two, each selling around 1,000 copies on newsstands per issue, can’t be compared by circulation Marketing has around 13,000 paid subscriptions, while Strategy’s 16,500 circulation is 90 per cent controlled-they must now fight for share of mind.

Industry insiders wonder where this trend is headed, and whether it’s the latest example of Maclean Hunter being squeezed out by a small, independent company. Travel Courier, once an established Maclean Hunter trade book, is an ominous reminder of what can happen. After losing top spot to Baxter Publishing’s Canadian Travel Press and spending a rumoured $1 million on a failed redesign, Travel Courier was sold in July 1990 to Baxter.

And just this January, Maclean Hunter sold off three more trade titles, including a veteran book, Canadian Hotel and Restaurant News, which lost its number one position to Foodservice and Hospitality, an independent owned by Kostuch Communications. By the end of 1993, the MH title had less than 20 per cent of the ad market; it is now owned by Kostuch. “Maclean Hunter has suffered badly at the hands of entrepreneurial competitors over the past few years in one-magazine markets,” says a Marketing staffer. “James Warrillow, president of the division, came to us in 1990 and said, ‘This has happened to us a few times in the past and we don’t want it happening to Marketing.'”

Could it happen to Marketing? One insider at Maclean Hunter thinks so. “My prognosis,” he says sadly, “is not good for the long term-and I mean the next three to five years.” His guess is the book may be in jeopardy if profits continue to plummet. In the winter, before the Rogers maneuver, Terry Malden predicted Marketing would one day return to its glory days under its new publisher, Cameron Gardner. (Gardner, who held senior publishing positions at Maclean Hunter for a decade and a half replaced Wright when he retired at the end of March, although Wright will stay on as a consultant.) And what if the magazine didn’t turn around? The company, Malden said, naturally would not support a money-losing venture forever.

FROM A SMALL CUBICLE IN THE MACLEAN Hunter maze of trade magazines on the fifth floor, down the hall from Marketing, Colin Muncie now freelances for The Medical Post and Benefits Canada. Four years ago, he was an insider, trying to face the challenge of Strategy, while still maintaining Marketing’s editorial integrity. Now he’s an outsider, reflecting on the prospects of a magazine that used to be his. The day the Rogers and Maclean Hunter merger was announced, Muncie was surprisingly hopeful. There is a place in the market for his old book, he said. And Wayne Gooding shared his optimism. “I have no doubts Marketing will be around. The only question is who will own it.”

Across town, Mark Smyka and Jim Shenkman were wondering the same thing.