The move is a bid for the world's largest publisher to compete against corporate packages offered by Advance Publications-which owns luxury-heavy Conde Nast Publications, Fairchild Publications and the Golf Digest Cos.-in a time when advertising remains scarce and marketers seek new types of packages from advertisers.
"We've done pretty well standing alone," said Ed Kelly, CEO of American Express Publishing, "but we haven't been able to compete head-to-head with packages from Conde Nast, just because of the sheer size and scale."
Along with Time Inc.'s recently established Women's Group package of 10 titles, the move also signifies new steps towards corporate-level cooperation at a company not always known for it-and one in which early attempts at large-scale integrated ad deals with America Online were not universally applauded by marketers.
"Conceptually," said Scott Kruse, senior VP-print director at Grey Global Group's MediaCom, New York, the new luxury buy "makes sense, but Time Inc. has not been a big-group buy company. ... There are a lot of clients that still do title-by-title deals." Another media buyer put it more simply: "They don't play together well."
"That may be a fair criticism of the past," said Jack Haire, Time Inc.'s exec VP. But, he said, these new approaches "offer critical mass in a number of key areas."
"A lot of the ways we may have, historically, done business we are trying to change," echoed Fred Poust, Time Inc.'s senior VP-corporate sales and marketing. He added the luxury buy "addressed some holes in the portfolio without creating a new magazine, or buying a new magazine."
The Luxury Portfolio, as the companies call it, encompasses any combination of 22 titles and demographically-targeted editions: American Express' Travel & Leisure, Food & Wine, Departures and T&L Golf, and Time Inc.'s Real Simple, Business 2.0, Coastal Living, Cooking Light, In Style, Fortune, Money, Southern Accents, Sunset, Fortune Small Business, Time Style and Design and Sports Illustrated's "Golf Plus" edition. Also included are five titles from Time Inc.'s Time4Media unit, Golf, Yachting, Motorboating, Ski and Skiing. Time Inc. manages American Express Publishing.
The entire portfolio encompasses a minimum of 15 million households, closely split between male and female readers, with a median household income of $118,662, according to American Express VP-Corporate Sales Cara David. As with other similar corporate buys, smaller portions of the group can be bought. Rates vary according to which titles are selected by an advertiser.
Despite Time Inc.'s long relationship with American Express, the companies have not collaborated much on ad sales. One exception was a deal assembled for Sony that began in late 2002, which ran in 15 titles across both companies' stables. According to Mike McHale, senior group principal- media director at Optimedia International, New York, another was his client British Airways' buy of Time4 Media's Golf along with some American Express titles timed to coincide with last year's Ryder Cup.
Marketers have only begun to be approached with the buy and none have signed on yet. It's expected the results of the initiative won't be fully felt until next year's issues of the magazines involved.
The ad market for magazines remains stressed, with ad pages for the first nine months of '03 flat compared with last year. But there have been signs of life at some luxury players. Through September, Conde Nast's companywide ad pages were up 7.3%, and American Express's rose 6.8%.