Luxe Mags Tap High-Rollers

Lucia Moses

MARCH 12, 2007 -

More than 13,574 Lexus cars rolled off lots in the U.S. last January, nearly 19 percent more than the same period the year prior. Bentley sales were up nearly 16 percent the same month, while sales of Maseratis rose 20 percent. Those figures shouldn’t be a surprise, given the number of people these days with the means to drop six figures on a car. According to Cap Gemini’s World Wealth Report, there were 8.3 million millionaires and billionaires worldwide in 2005, an increase of 10 percent over the year before.

For magazines that serve the very rich, these are good times.

CurtCo Media’s Robb Report, the magazine for the “ultra-high net worth,” whose readers have an average household income of $1.4 million per year and average total liquid net assets of $7.7 million, recorded a 10.4 percent gain in ad pages last year, per the Mediaweek Monitor. (Pages declined 16.9 percent through April, a period when the magazine faces tough comparisons with a 30th anniversary issue and a number of new-car introductions in the same period a year ago.) Dan Galpern, COO, said he expects another strong year for Robb Report and CurtCo’s 13 other titles, which include Worth and ShowBoats International. “The consumer base in the ultra-affluent market is one of the if not the fastest-growing market,” he said.

Hearst Magazines’ Town & Country also is flying high, with ad pages ahead 3.7 percent through April. And American Express Publishing grew ad pages 8 percent last year across its six titles and is targeting growth in the high single-digits this year, said Ed Kelly, president and CEO. “Our readers are wealthier, and there are more of them,” he noted.

For many marketers, there’s no such thing as a magazine audience that’s too rich, said Mitch Lurin, president, Mendelsohn Media Research, publisher of the Affluent Survey. “If the affluent can buy more of what it is I’m selling, I want them to buy more product,” is the reasoning among advertisers, he said. Magazines, for their part, he said, “love to be able to pound their chest and say, ‘Look how affluent our readers are.’”

It’s no longer enough for advertisers to reach the 22 percent of U.S. households with incomes of $85,000-plus, which MMR measures in its Affluent Survey. To satiate advertiser demand to reach the richest consumers, a few years ago it began measuring magazines according to the number of their readers who head households worth $1 million and up.

For publishers playing in the luxury space, the field is getting more crowded. The Standard Periodical Directory counts 72 new publications aimed at the wealthy that have launched since 2004, many of them regional-focused, travel or home décor magazines.

The proliferation of these magazines, not to mention the effort by more mainstream titles to highlight the rich portion of their readership, has some media buyers asking if the audience they purport to reach makes them worth the high CPMs they charge. Particularly scrutinized are magazines that aren’t audited or are distributed free. Jack Hanrahan, U.S. print director at OMD, is wary of magazines’ one-time-only or 13th issues that are sent to a segment of the subscriber base. “What do they know about the 300,000 people who are receiving this special edition that warrants the kind of pricing that typically goes along with these special editions?” he asked. “We need to do our jobs very diligently on those and publications that purposely go to an affluent market for free. If the person won’t read that separate copy and it’ll go in the wastebasket, we don’t need it.”

Doubledown Media is one new company that’s betting it can overcome those objections. Founded two years ago with the launch of Trader Monthly, Doubledown now has three magazines it describes as for the “working wealthy,” with a fourth, Corporate Leader, to come in fall. In targeting people by their profession, and selecting professions with knowable incomes, said Randall Lane, president, “There’s no guesswork about who our readers are and what they make.” As for wantedness, Lane said Trader Monthly is offered to traders but only sent to those who request it—and qualify to receive it: “It’s very much of a velvet rope here.” Lane said growth in luxury categories like real estate, automotive, jewelry and liquor have lifted ad pages, which totaled 65.7 in the February/March issue, up from 46 in the year-ago period (The company, being private, doesn’t release revenue data).

Jamie Rhind, senior vp at Zenith Media, speaking generally, said that even if a publication is requested, the question remains if it will be read and passed on. “Just because someone is sending something—and it applies to direct mail, e-mail, too—because of people’s demands on their time, it becomes more difficult to capture people’s attention,” said Rhind, who oversees media spending for many luxury watch, jewelry, fashion and accessories brands.

To stay competitive, publishers also are stepping up the events they host to bring advertisers closer to their well-heeled readers. Town & Country feted 100 at a cocktail party in Washington, D.C., last October for an advertiser, the jeweler Michael Beaudry. Beaudry sold about $100,000 worth of merchandise at the party.

Doubledown threw 60 events last year, including a party for 600 at Manhattan’s Le Cirque to honor female traders. “More and more, marketers want to engage with their consumers,” said AmEx’s Kelly, whose Food + Wine Classic in Aspen this June has attracted sponsors like Lexus and Delta. “They want to be able to bring their products to life, so we’re being asked to bring our magazines to life.”
Luxury advertisers historically have been big spenders in magazines, which can offer credible editorial content and high production quality. A tradition of in-house media buying among small, high-end marketers also has worked in magazines’ favor, media buyers said.
But they now also face a growing wealth of options outside print. And while they may be trailing mainstream marketers in doing so, they’re shifting their ad spending to publications’ Web sites, search engines, out of home, and other platforms.

The rich “may be spending the same amount of time reading a magazine, but now their other time is moving toward digital media,” Rhind said. “As brands and agencies look for accountability and need to show that, mediums are being rewarded with investment as smart marketers are shifting dollars to take advantage of the depth of communication and involvement digital media now offers.”