Luxury surges to magazines

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Spurred by a strong economy that's blurring the line between the affluent and the super-rich, as well as changes in how luxury goods are consumed and marketed, ever-increasing levels of luxury advertising are making magazine publishers very happy.

As a result, magazines are hatching ancillary businesses, producing special issues or commissioning original research as a means toward commandeering bigger pieces of the luxury pie.

Esquire spends more than $250,000 annually on research to pin down the consumer habits of what one executive calls "the new affluent." House & Garden's luxury-themed issue this September will be its largest single issue to date. It garnered 208 ad pages. Last year, American Express Publishing, publisher of Travel & Leisure, Food & Wine, Departures and T & L Golf, began hosting its "Luxury Summit," aimed at luxury marketers and advertisers.

KEEPING UP WITH MARKET

"There's a new affluent person out there," explains Jason Lundy, executive director-marketing and strategic planning for Esquire. "We have to keep up with him."

Defining this man, he says, "is more psychographic than demographic." The new affluent man could be making $50,000-to-$75,000, but "spending every cent on Gucci and Prada and Ralph Lauren."

Mr. Lundy says some traits of the new affluent man include: He has a more active role in furnishing the family home. He's much more concerned about grooming; he's not shy, for instance, about buying fragrance or admitting simple vanity. And, "individuality and connoisseurship are extremely important."

House & Garden's readership skews significantly more female than Esquire, but Publisher Brenda Saget also testifies to a change in affluent men's consumer habits.

"A lot of decorators tell me a good portion [of their business in customers' homes] is between 6 and 10 p.m." when both working men and working women are home, she says. Such a man "cares as much about Sub Zero [Freezer Co.'s refrigerator] as he does about the fabric and the chairs."

The payoff for House & Garden? Luxury advertising will rise about 15% in 2000, says Ms. Saget.

For such publications as Time Inc.'s Fortune, luxury advertising revenue was up 46.9% in the 12 months ending this July, says Publisher Mike Federle (See story at right).

One can see change in how luxury marketers are targeting consumers through magazine ads, says David Carey, publisher of The New Yorker.

"There's been a transition from products positioned as elite to smart," he says, and many advertisers "have warmed up" their pitches.

His favorite example, he says, is watchmaker Movado Group's campaign for its Concord watch with the tagline "Time is luxury," a catch phrase that rings true to the hard-working new affluent.

"We needed to talk to the consumer on a different level," says Mary Leach, VP-advertising and creative services for Movado, adding "the inspiration of the campaign was to tell a lifestyle story for watches" that might appeal to the luxury-minded audience.

Today, luxury "is more of a state of mind than a state of wallet," says Christine Miller, exec VP at Magazine Publishers of America.

"I would call it not just luxury, but quality," she says. "People are willing to pay for things to which they aspire and that represent quality." And that may mean a more flexible definition of luxury.

"Is luxury a $4 ice cream? Or is it a $40,000 piece of new jewelry?" asks Gina Sanders, publisher of Gourmet. "It's both. It's about the premium experience at all price points."

DESSERT AND JEWELRY

Illustrating Ms. Sanders point, Gourmet, an obvious ad vehicle for high-end ice cream, this year began running advertising from high-end jeweler Harry Winston, as well.

Most of Esquire's new business is from the luxury market, says Mr. Lundy, citing a number of upscale car marques. He adds year-to-date ad page growth from luxury marketers at the magazine topped 50%.

Luxury is "a significant part of our growth," he says. Even luxury retailer Saks Fifth Avenue has bought more than 50% more pages in the title than it had in 1999.

"We're looking to pick up consumers in their 30s, whereas before we might have been thought of as a car for older people," says Al Weiss, manager and advertiser of development for DaimlerChrysler's Mercedes-Benz USA, which advertises in Esquire. "Our advertising has gone from just stressing the engineering to `take a look at the beauty and style of the car.' "

APPAREL GAINS

Through June, magazine advertising from apparel retailers is up 53%, according to MPA.

There's a practicality in new luxury, says Ms. Miller. If consumers want a new handbag or jacket, they'll shop for "quality, maybe leather. So, it's not just an indulgence, it's going to last."

The strength of the economy, meanwhile, has broadened the scope of some magazine's ad mixes.

"What that means for luxury marketers is that their potential sales radius has expanded," says Ms. Sanders. This year, for instance, will be Gourmet's biggest year to date for travel ads. "If the measure of a strong economy is disposable income," she says, "people are going to take extended vacations."

"We went from being 65% travel and the rest non-endemic to about 55%," says Ellen Asmodeo, Travel & Leisure publisher. "Our [luxury] advertisers are looking for image."

"The most significant change from the recent past is that luxury is demanded at an earlier age," says Suzy Weisinger, president of Plaza Advertising, New York, the in-house agency for Vendome Group, which markets Cartier.

In search of this younger consumer, Cartier has advertised in youth-skewed titles as Flaunt and Wallpaper, "which we would have stayed out of a few years ago," says Ms. Weisinger.

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