CONDE NAST STUDY REVEALS LITTLE LOYALTY TO BEAUTY LINES: SURVEY IS RESPONSE TO FALL IN COSMETICS AD SPENDING

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Magazine ad spending by beauty and cosmetics marketers is on the decline, and at least one publishing company wants to know why.

Conde Nast Publications and a group called Cosmetic Executive Women conducted a study of the beauty purchases of more than 5,000 female subscribers to Conde Nast magazines. The key finding: women are loyal to individual products but not to beauty lines.

CRUCIAL TIME

The study could impact how cosmetics companies market their products. And it comes at a crucial time for the magazine business. Marketers of beauty products ran 5,972 ad pages in the first nine months of this year, a decline of 6% from the same period last year, according to Publishers Information Bureau. Conde Nast, the leader in beauty advertising in market share, was among the hardest hit. It ran 2,595 cosmetics/beauty ad pages in the first three quarters, down 10% from last year.

The drop is due at least in part to a shift by beauty manufacturers of ad dollars to other marketing channels, including promotions and sampling. It also comes as the companies experiment with Internet advertising and e-commerce (see related story on Page 34).

"We're concerned about our advertising relationship with these companies, but they are concerned overall," said Catherine Viscardi Johnston, Conde Nast exec VP. "Beauty manufacturers want to know what isn't working. Is it the product, the packaging, the retail atmosphere?"

Conde Nast used its Preferred Subscriber Network, a database of 375,000 subscribers, to target 10,000 women identified as consumers of four or more beauty products. Out of that group, branded as the BeautyLab, 5,032 women sent back a 10-page survey detailing their brand preferences and purchase habits for such products as blush, eye shadow, fragrance, lipstick, mascara and nail polish.

One of the most striking findings was that while women are loyal to certain products, that brand preference doesn't necessarily extend across product lines. So just because a woman swears by one company's lipstick doesn't mean she's going to buy that marketer's blush. In fact, 64% of respondents said they buy at least four different brands of color cosmetics, and 76% visit multiple retail outlets for beauty purchases, including specialty stores such as Sephora and Bath & Body Works.

NO MORE LOYAL CUSTOMERS

"The idea of a loyal customer is no longer what it once was. She doesn't exist anymore," said Carlotta Jacobsen, president of Cosmetic Executive Women. The industry has been aware of this eroding customer loyalty, she added, "But this is a real confirmation that it is truly happening on a very large scale. The industry is now trying to figure out how to address that."

Elizabeth Herman, senior VP-market research for Revlon, said she was "impressed with the size of the database," and added she was eager to make use of the

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