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An afternoon at the beach. That's all it took to make Conde Nast Publications' Vanity Fair one of the most talked-about publications of 1998.

It happened quite by accident. Last spring, Monica Lewinsky bumped into Vanity Fair's Maureen Orth at a party in Washington, where Ms. Lewinsky happened to tell the journalist the magazine was her favorite.

Ms. Orth passed the word to Vanity Fair Editor in Chief Graydon Carter and voila: There was Monica in the July issue, posing cheesecake-style alongside the Malibu surf with the American flag.

The Herb Ritts photographs generated media buzz and water-cooler chitchat beyond the dreams of any publisher. The three major broadcast networks all led the nightly newscasts with stories on the pictorial. The Los Angeles Times, Pittsburgh Post-Gazette, Newark Star-Ledger and scores of other newspapers ran editorial cartoons spoofing the spread.


"The Monica Lewinsky situation really fell in our laps," says Mr. Carter -- who reveals that he briefly considered putting the former White House intern on the cover. (He's quick to note he didn't consult the circulation department.)

"If I were just after sheer newsstand sales, I would have put her on the cover," says Mr. Carter. For what he calls the "long-term [editorial] health" of Vanity Fair, he chose writer Bob Colacello's profile of Ronald and Nancy Reagan for that month's cover.

The pictorial of Ms. Lewinsky and the two-part article on the Reagans were just two of Vanity Fair's journalistic coups last year.

In addition, Vanity Fair gave the world its first glimpse of Madonna's daughter Lourdes, via photos by Mario Testino. Sebastian Junger, who wrote the best-seller "The Perfect Storm," reported from Kosovo months before the Yugoslav province got global media attention. And author Tom Wolfe talked for the first time about his long-awaited novel, "A Man in Full."

Last year, Vanity Fair also unveiled a new editorial franchise, "America's Most Influential Women."


Mr. Carter, who came to the publication in 1992 from the New York Observer, is responsible for a number of successful new reports, including the annual "New Establishment" issue, which features profiles of movers and shakers in the entertainment, media and technology industries. The "Hollywood" issue is produced every year in conjunction with the Academy Awards. (Vanity Fair's post-Oscar party has become "the hottest A-list bash in town," according to Entertainment Weekly.)

While editorial content has pulled in readers, Vanity Fair also has been pulling in advertisers. This year was a powerhouse.

Vanity Fair sold 1,882 ad pages in 1998, a healthy 11% year-over-year increase, according to figures provided by the Publishers Information Bureau. It was the third consecutive year the title garnered record ad pages. Since 1994, when VP-Publisher Mitchell Fox joined the magazine from Conde Nast's Details, pages have risen a staggering 69%. This for a title many believed had hit its peak in the 1980's.


Vanity Fair's rate base, which stands at 1 million, has soared 67% this decade, and the magazine boasts that it has not missed a single rate base in its 16 years. Even though circulation in the first six months of 1998 was up compared to first-half 1997, subscriptions and newsstand sales both fell during second-half of last year, according to the Audit Bureau of Circulations.

Total paid circulation during the period dropped 1.8% to 1,076,150, with subscriptions down 1.2% to 698,393 and newsstand off by 2.9%, at 377,757.

Last October the magazine raised its cover price 12.9%, to $3.95 from $3.50, which likely contributed to the single-copy slide.

Despite the declines, the magazine continued to deliver a huge bonus over rate base -- and its publisher is upbeat.

"Growing circulation is not a priority," he says. "We want to continue to raise the newsstand price and subscription price, and to deliver to marketers a core audience that has paid a premium to purchase this magazine."


Strong advertising and circulation results have made Vanity Fair one of Conde Nast's most profitable titles, according to the magazine. (The company also produces Vogue, Architectural Digest, GQ and The New Yorker.) Mr. Fox reports that Vanity Fair's profitability is "ahead of expectations, ahead of plan" -- and that Conde Nast Chairman Si Newhouse and President-CEO Steven T. Florio are "elated" with the magazine's balance sheet.

Vanity Fair's biggest ad category last year continued to be fashion/ready-to-wear -- even though it suffered a punishing 14.8% decline for the publication from 1997, according to PIB.

Following ready-to-wear -- which accounted for 358 pages -- were retail (up 12.7%, to 257 pages), automotive (up 56.3%, to 166 pages) and jewelry/watches (down 1.5%, to 138 pages). Technology, tobacco and travel -- while starting from a lower base -- also saw high-double-digit gains in 1998.


Vanity Fair brought in 122 new advertising clients last year -- among them, Apple Computer, Nikon, Neiman Marcus Group, Baccarat and Ritz-Carlton Hotel Co. New advertisers accounted for 273 pages -- 15% of the publication's total ad business.

Vanity Fair also continued a number of highly successful value-added programs for its advertising customers -- including its sponsorship of the Telluride Film Festival and Nantucket Film Festival -- which not only drove ad pages but gave clients like Smirnoff vodka, Audi of America and Eastman Kodak Co. access to Hollywood's major players.

And the magazine threw its support behind promotional events for The Gap's Banana Republic, Nautica Enterprises, Estee Lauder Cos. and other clients. Advertising exclusives last year included a 40-page ad supplement for Calvin Klein, polybagged with the March issue. More are on the way: Donna Karan International, Vanity Fair's single largest advertiser, will run a 90-page polybagged ad supplement in April's Hollywood issue, in conjunction with the opening of its first free-standing retail store.

"It's interesting to take fashion out of a fashion-only arena -- it sort of stands out a little more," says Trey Laird, creative director for Donna Karan. Mr. Laird points out Vanity Fair, unlike the fashion titles, delivers a truly dual-gender audience -- key for a company specializing in women's and men's apparel and accessories. "Anybody and everybody you would want to know about your brand is reading it," Mr. Laird says.

"It's not even a fashion magazine, and yet there are so many fashion advertisers in there," notes Sam Shahid, creative director of Shahid and Co., New York, whose clients include designer labels Gianni Versace and Perry Ellis and retailer Abercrombie & Fitch, all Vanity Fair advertisers. "It's the place to be. The world sees it, the press sees it, and it creates a lot of conversation."

Vanity Fair "creates an environment that really involves the reader . . . a reader who is upscale, highly educated and professional," says Priya Narang, senior VP-media director for DeWitt Media, New York, which buys advertising for BMW North America.


The median age of Vanity Fair's audience is 37, median household income is more than $58,000, and 70% of readers are college-educated, according to MRI Research.

Support from such high-end nameplates as BMW, Mercedes-Benz North America, Volvo Cars of North America and Land Rover North America -- as well as domestic automakers like Ford Motor Co. and DaimlerChrysler -- has made automotive one of Vanity Fair's fastest-growing categories. Automotive last year moved from the fifthlargest to the third-largest category.

"It's certainly their time in the sun," says Alan Jurmain, exec VP-media director for Lowe & Partners/SMS, New York. "They are tapping into some very relevant chords among their reader base in terms of cultural interests . . . which these days can span news, politics, sex, Hollywood, young, old, international. Right now they're winning the game."

Bolstered by strong categories such as fashion and automotive, the title's advertising base is becoming more diverse. It has managed to attract some marketers which might seem out of place, such as Kinko's, a new client for '99.


"More and more, Kinko's is being used by the guy who goes to have his presentation done -- and then goes back two days later to print schedules for the Little League team he's coaching," says Monica Karo, media director with TBWA/Chiat/Day, Chicago, whose clients include Kinko's and Apple.

"We're appealing to both the business and the personal side -- that convergence. Editorially, that's what Vanity Fair is," says Ms. Karo.

Media is becoming another category to watch at Vanity Fair -- it gained 41.7% last year, to 136 pages. Media moved to sixth-largest from seventh-largest category, thanks to such advertisers as HBO and Dreamworks SKG.

"When we have a special event, Vanity Fair is the perfect vehicle for us -- it's not even a decision whether we want to be in the book," says Roberta Mell, VP-marketing for HBO, which promoted such programming as the Tom Hanks mini-series "From the Earth to the Moon" and "Jerry Seinfeld on Broadway" in the publication last year.

"For the smarter, more affluent viewer," Ms. Mell says, "you can't do better

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