Tony mags work 'Minute to minute'

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For now, publishers of luxury magazines are keeping the Louis Roederer Cristal on ice. Although they didn't suffer ad declines as deep as many other titles last year, 2001 was no joyride. For 2002, the hope is that the numbers will at least stay fairly stable.

"Everybody is doing better than new-economy business or personal finance magazines. It's challenging but not devastating," says Julie McGowan, senior VP-publisher of American Express Publishing Corp.'s Food & Wine.

Perhaps not devastating, but luxury-oriented titles were hit by painful ad downturns in 2001, and that descent accelerated into a nose-dive for many of those magazines in January 2002, according to Publishers Information Bureau. Food & Wine, for example, wrapped up 2001 with 1,214.4 ad pages, down 4.1% from 2000, PIB data reveal. The new year brought 44.4 ad pages in January, down 10.2% from a year earlier but mild compared with the dropoffs at some other luxury magazines (see chart on Page S-10).

Ms. McGowan says Food & Wine is ahead 8% for the first quarter overall. "I can't make bold statements [about 2002]," she says, "because it's not clear where we're headed. It's minute to minute. ... It's safe to make the generalization that advertisers are committing later and, when possible, to shorter schedules so they can be nimble, but I think that's been a trend for many years."

Bon Appetit in the first quarter is down 100 ad pages from last year, says Lynn Heiler, VP-publisher at the Conde Nast Publications title. Advertisers are "toning things down. They're holding back."

MARKETERS RETRENCHING

"Marketers are retrenching-that's delaying what goes into 2002," says Ed Kelly, CEO of AmEx Publishing.

"There's no room for mistakes at any level," says Amy Churgin, VP-publisher of the Conde Nast's Architectural Digest.

"Those [luxury magazines] that are rooted and relevant are doing well," says Ellen Asmodeo-Giglio, VP-publisher of AmEx's Travel & Leisure.

Along with the core titles in the luxury segment, trend books like Paper and Surface are "still important" because the affluent population wants to stay fashion-forward and in-the-know, says Dene Callas, co-managing director and chief strategic officer of Grey Global Group's MediaCom, New York. But she adds there are "just so many dollars to spread around. Was there room for Vanity Fair and Talk? Obviously not."

Donald Ziccardi, CEO of New York-based agency Ziccardi Partners Frierson Mee, warns that luxury marketers are going to pull away from magazines that don't specifically target their true customer. "We can't spend our [costs per thousand] on an audience that diverse," says Mr. Ziccardi, whose agency creates advertising for several luxury brands, including AmEx's Departures. He adds that, in a bang-for-the-buck effort, "we are much more concentrated on monthlies as opposed to weeklies. We need more longevity and the pass-around."

Refocusing on the affluent instead of the aspirational has made luxury exclusive again, and there's a definite change in tone. Flash is out, value is in.

"I think people got their gut check. It's about value and appropriateness and getting back to what's sensible," says Mr. Kelly.

In the post-Sept. 11 world, new home-centric advertising has stepped in to fill some of the huge gap opened by the death of the dot-coms. "The dot-com business was our biggest loss. That's why we were down last year," says Bon Appetit's Ms. Heiler. But these days, "Everybody just wants to be together. As a result, we have a lot of new advertisers we haven't seen before," such as Pella windows.

Such advertisers, however, aren't necessarily going to be an easy sell for magazines in 2002. In January, ad pages for household furnishings and supplies in magazines overall slipped 1.7%, vs. January 2001, according to PIB, while food and food products dropped by a deeper 8%. The once-vaunted technology ad category fell 42.5%.

happy to be even with 2001

At Departures, home and hearth has translated to growth in real estate advertising, which rose from four pages during the first quarter of 2001 to 12 pages for the same period in 2002.

Departures VP-Publisher Kathi Doolan says that an overall deep drop in ad pages doesn't bother her because "on the revenue side we're fine ... We're cautiously optimistic. I will be extremely happy if we can be flat with last year."

Both the publishers and the advertisers are taking more aggressive-and pro-active-stances. "There's more pressure [from advertisers] to document the effectiveness of advertising in your magazine," Ms. McGowan says.

Although many publishers are pushing promotional programs, Ms. Callas says they often "don't really reach out to a large customer base. You have to be careful looking at programs. We're looking for price, positioning and reaching out to the customer."

And magazines are actively trying to give the marketers the information they need to put them back in a comfort zone. Advertisers are "doing more studies to see what kind of message they should convey," says Ms. Heiler.

Many of the titles report that advertisers are checking in with them to see what their readers need. "Smart marketers are asking us how readers are feeling and how we are talking to them," says Lynette Harrison, publisher of Time Inc.'s InStyle.

Most of the publishers say they're working to provide the research the advertisers require. Travel & Leisure has extended its Market Watch series and has started holding seminars for smaller groups such as European travel directors.

But no matter what programs or research the publishers are able to produce, there are still challenges ahead.

Publishers "are putting up a good front," says Ms. Callas, "but it's not going to create money where money doesn't exist."

"I don't think we're out of the woods," Mr. Kelly says. "The second quarter will be very challenging."

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