CACHET AND CARRY;MARKETERS AT HIGH END TRY NEW MEDIA MIXES TV BECOMES INCREASINGLY VIABLE HOME FOR PRESTIGE ADVERTISING

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[london] Luxury goods marketers encourage lavish spending but pinch pennies on advertising.

Gucci, Bulgari and others are boosting ad budgets, but buys are still overwhelmingly skewed toward print media, aside from spots for flagship fragrances.

Here's what TV faces: LVMH Moet Hennessy Louis Vuitton's Givenchy buys ads for fragrances, but spends mostly on upscale magazines and some inflight publications. Hennessy cognac and Moet et Chandon Champagne rely largely on print, as does Louis Vuitton, which uses TV only to promote sponsorships.

Gucci doesn't spend any of its $38 million ad budget on TV; nor do Bulgari, Ferragamo or Fendi. And Chanel and Loewe use TV for fragrances only.

Hugo Boss ran a TV campaign once for suits and uses a mix of print and TV for fragrances. Judith Leiber sells handbags and jewelry in upscale magazines.

However, more TV and business publications, like CNN International and the Financial Times, London, are drawing luxury goods to advertise.

"A lot of them are relying on print," said Nan Richards, managing director of Turner International advertising sales for Europe and Asia. "Give us a portion of the print budget and we can give you the same upmarket customers. For the first time advertisers are converting from print to TV."

SMH International has run out of $1,500 Omega Seamaster watches after a December in-house campaign on CNN International, using clips from the movie "GoldenEye."

"After the campaign went on TV, sales doubled," said Marc Schlussel, Omega's advertising manager. "We won't be able to supply product before April."

Luxury goods marketers running TV spots largely in Europe are starting to target Asia on Star TV and CNN. Ms. Richards predicts activity for the luxury apparel category, new to TV. One Italian cashmere company, Fratelli Piacencza, added CNN to a previously only-print schedule.

CNN research shows viewers, many of them in hotel rooms, buy more luxury goods at airport duty-free shops than non-viewers. Asian CNN International viewers are 16% more likely than non-viewers to buy fragrances and 10% more likely to buy jewelry and watches, according to the International Air Travel Survey for Asia. Its data for Europe shows 56% of CNN viewers there have bought jewelry or watches and 50% fragrances in the last 12 months.

Gucci is adding 11 more duty-free airport boutiques to its existing 74 over the next three years.

But luxury goods marketers are often as traditional as their products. Loewe, a marketer of classic Spanish leather goods, considered one of its fragrance spots a classic, too-running it for 15 years, mostly in Spain until 1995.

Chanel, with sales estimated near $1 billion, has been one of the most enthusiastic TV buyers but is unsure whether to continue. In one striking international spot for Chanel No. 5 fragance, French actress Carole Bouquet watches a Marilyn Monroe movie and finds herself metamorphosing into the actress.

"We are really questioning the usefulness" of TV, said a luxury goods marketer familiar with Chanel. "There is too much zapping going on, and there is also a real overload of messages. I am not sure our message really gets to the viewer through TV."

Print also offers luxury goods marketers a seductive synergy. In one issue of Vogue, five pages of Chanel ads tout clothes, perfumes and handbags while editors select shades of must-have Chanel nail polish and review its slinky catwalk collection in their pages.

Business publications are staking a bigger claim to luxury goods ads. The Financial Times has pulled in new advertisers by creating a separate magazine called How To Spend It, distributed with the newspaper. Deputy Advertising Manager Genevieve Marenghi said the new title has attracted luxury goods marketers like Calvin Klein and Givenchy who had never advertised in the Financial Times. Launched in 1994, the magazine appeared six times last year and may be monthly by 1997, she said.

"Campaigns can be equally effective in high quality business magazines as well as glossy [consumer] publications," said Maryann Barone, CEO of the Chelsea Partnership, London, an agency specializing in luxury goods.

"There was a time when [upscale glossies] such as Vogue considered that they had cornered the market for luxury goods ads. These days, those ads do not automatically go there."

Not so for airlines' inflight magazines. Luxury goods marketers are their biggest advertisers.

But even marketers as centralized as luxury goods companies still have trouble executing global media strategies.

"They were all on a different page," said one frustrated media executive who made a European sale to a luxury goods marketer interested in running in all regions. In the deal, the media executive wasn't able to clinch Asia and Latin America because "one person [at the marketer] couldn't dictate the global buy."

Contributing to this story: Bruce Crumley, Paris; Juliana Koranteng, London.

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