The Luxe Life

 

By Jade Lee-Duffy

Marketers of luxury brands are today plunging as much as 80% of their budgets into luxury and society magazines. These advertisers are banking on the philosophy that you are what you read, and if you're reading luxury magazines, most likely you'll have the spending power to buy what you see.

While other forms of media such as TV and radio reach the mass market, luxury brands aim to reach a selective audience with high-spending power.

Olivier Burlot, managing director of Blu Inc Media, says consumers use brands to fill an emotional space, improve their self-image and fulfill a need for recognition. Through luxury magazines, the quality of the audience is key, where big numbers does not mean effective communication.

"Radio is proximity media, TV is instant media and magazines are emotional media," Burlot says.

"Luxury brands don't want mass media, but niche media where quality is much more important than quantity. Magazines feel important and fill an emotional gap for the consumer. It's easy to change the TV channel, but with magazines, consumers have a special [interactive] relationship."

Since starting Blu Inc (formerly Adkom Media Group) in 2001, the company has attained tremendous growth, expanding from one publication to eight with titles including Asia-Pacific Boating, China Boating, Jet Asia-Pacific, Action Asia, AsiaSpa and LP Luxury Properties. Burlot explains the company's growth is due to the strong advertising spend of luxury companies, a 28% increase in 2007 in Asia, while China's advertising spend is up 36% in 2007.

Burlot attributes the success of his company to building niche magazines for specialised markets such as jets, spas, yachts and property. One of the company's newest magazines is LP Luxury Properties. "In less than two years, it's [LP] doing amazingly well. We provide luxury developments with the perfect catalogue environment and it can be creative. We can go beyond typical advertising, such as providing French doors on the cover. This meets the needs of these [luxury] companies - something exclusive and high-end."

The Singapore luxury market has been experiencing significant growth, according to Gilbert Cheah, managing director of Edipresse Singapore which publishes Singapore Tatler. He says as wealthy individuals increase across the world, and especially in Asia are breaking records and adding millionaires almost daily. With advertisers including Rolls Royce, Maserati, Rolex and Taj Resorts, Singapore Tatler has experienced a huge increase in advertising from the luxury market over the past two years.

Cheah also believes magazines are able to reach elite readers. "In their very nature, TV and radio are mass mediums and you cannot control who views your shows or tunes in to your radio broadcasts. As such, the demographics of the audience are diluted.

"Magazines are a much more selective medium - you can choose who you mail the magazine to.We have a select list of high-net-worth individuals who are also socially active and influential, and they are the key readers."

But are publications reaching the key affluent readers that luxury brands are so hungry for? Cheah firmly believes in audits for publications.

"[Singapore Tatler] is audited by ABC. Audits are absolutely necessary if the advertisers want independent verification of a magazine's circulation and the assurance that their ad dollars are really reaching the numbers that publishers claim. Otherwise, how on earth would an advertiser know that a magazine is even printing and distributing the numbers they claim?" Cheah says.

"Many magazines in Singapore make excuses for not being audited but the reality is that they don't have anywhere near the numbers they are claiming and would have to increase their print run significantly if they were to ever submit to an audit."

As advertisers spend money on publications to create awareness of their brand, is there any way of measuring advertising response? Cheah says, "There are different strategies that advertisers can employ, but obviously there is a difference between brand advertising and direct response advertising. Many luxury advertisers do brand advertising to position their brands, and you can't measure how many more handbags or watches you sell through these ads.

"You can get a more direct measurement through events of course, and that's why events and brand advertising are perfectly complementary marketing efforts."

In a competing market for advertising dollars, most magazines offer advertisers other services besides straight-forward print ads. Publishers often assist advertisers in hosting parties, exclusive dinners, sponsor product launches and cover high-society events.

"The added-value events complement the [luxury] company's brand building and provides credibility [for us]. If we weren't able to provide such events, we would have less credibility," Burlot says.

For the past two years, Blu Ink Media has organised Jet Rendevous, a three-day getaway for the super-rich. With an extensive database of affluent readers, Blu Ink provides a guest list of 60 VIPs with assets of at least US$200 million (S$284.48 million) while advertisers show off their products during the event, ranging from jets and helicopters to expensive cars and luxury watches.

Another publication, Prestige, also benefits from a wealth of luxury brands looking for avenues to advertise. Established in 2005, the glossy lifestyle and society magazine targeted at Hong Kong's affluent readers has become one of the city's most popular publications.

By exclusively covering events in Hong Kong and abroad, such as the Hong Kong Breast Cancer Foundation Ball and Fendi at the Great Wall, and world-exclusive stories of celebrities including Janet Jackson, Beyoncé and Victoria Beckham, the publication has been able to lure a wealth of luxury brand advertisers. In 2007, Prestige's advertising revenue increased 80%.

As part of 6cm Media which also publishes Tic Talk and Venetian Style Macao, the advertising pages for Prestige's second anniversary issue (September 2007) increased the magazine's weight to five pounds, making it the heavier than Vogue at 4.9 pounds for the same issue.

"Luxury is all about sensations. Our publications offer luxury, a medium you can feel and see," Anne Lim-Chaplain, associate publisher and managing director of Prestige, says.

Prestige also assists advertisers, particularly designer fashion brands, in hosting exclusive dinners when their lead designer is in town. "Advertisers come to us and ask if we can arrange a dinner with [Hong Kong's] top people. That's one of the added-value things we will do for them. We prefer to have exclusive events, to make direct contact with our brands and the readers," Lim-Chaplain says.

Other mainstream publications are trying to make inroads into the luxury market, but without much success. Don Anderson, marketing and communications manager of Prestige, says, "Magazines such as Forbes and Time have made their name in the business of finance and general news reporting, and for the most part, have less direct affiliation with the luxury industry.

"They may be able to report on the business of luxury, but they don't necessarily tap the essence of the luxury lifestyle. Their efforts typically supplement their core editorial product, rather than being the core product."

He adds luxury brands seek alignment with luxury publications that specialise in this sector, and have supporting networks, targeted distribution channels and editorial teams experienced in producing content for a highly discriminating, affluent readership.

A relatively new player in Hong Kong's consumer magazine market is InMagazine, which launched in September 2006. Targeting both affluent English and Chinese readers in a bilingual format, InMagazine attracts 80% of its advertising dollars from luxury brands such as Ferrari, Tiffany & Co. and Cartier.  

"Print publications are the best platform for the luxury market because TV is for the mass market. They [luxury advertisers] come to our publication because we have insightful write-ups - we're different from other publications because we want to discover the inspiration behind each brand, so people will get to know the brand and have loyalty," Nouvelle Ho, managing director of InMagazine, says.

Ho says the luxury market is growing. "Ultimately, Hong Kong is a luxury hub where you build a brand and then leverage it to China. Because of Hong Kong's geographical location a lot of luxury brands come to Hong Kong."

In addition to print ads, InMagazine allows advertisers to buy the magazine's cover in a styled photoshoot. In the December 2007 issue, Tiffany & Co. for the first time in the American jeweller's history, paid for a cover that used the publication's photography, model and styling team.

InMagazine also provides marketing communications for advertisers. As a one-stop shop, the company creates media awareness, interviews the company for an in-depth story, organises product launch parties, and covers the opening event in the magazine's society pages. In October 2007, the publisher organised a debut launch party for Italian jeweller, Pianegonda, which featured dancers flown in from Italy.

One medium where you can easily measure readers' habits is the internet. Launched in 2006, Lifestyle.hk is Hong Kong's first upscale online magazine and members website, providing members with daily lifestyle news and events in Hong Kong.

"Our biggest advantage [for advertisers] is that we're measurable and a members club, so readers must provide information to get the full content on line," Sebastian Svensson, director of Lifestyle, says. As each member's profile provides the gender, age and residential location, other information collected from a member can include which mobile phones are most popular and how often members dine out in restaurants.

"We can measure the success of campaigns, which gives a detailed statistics system that provides knowledge about the target viewer," Svensson says.

"Advertising online is cost effective compared to print. You never really know in print what you'll get back, but for online, you know exactly how many views your banner gets."

Svensson says the amount of online advertising spend by luxury brands is conservative. However, airlines are at the forefront of this medium since booking air tickets online has become widely accepted. According to Svensson, other progressive brands include Van Cleef & Arpels and Hugo Boss.

From an advertiser's perspective, print media for high-end brands is the predominant means of advertising. For renowned Swiss watchmaker Concord, 70% of their advertising budget is spent on magazines. Vincent Perriard, worldwide president of Concord, says magazines have been the common ground for high-end luxury, where the environment is filled with luxury images. And reading a magazine promotes physical interaction, unlike the internet or TV.

"Everyday our customers cut out an advertisement from a magazine and walk into a store saying they want this particular watch," Perriard says. "Magazines are a quality platform and it works." 

Alternatively, slowly gaining attention is internet advertising. Perriard says five or six years ago the company would not have considered advertising online, but now Concord is starting to allocate a portion of its budget towards the new medium. "A generation of 30-35 year olds have grown up with the internet and they are starting to have money.

"The way this group gathers information about luxury [items] is through the internet. And because of this generation, we are increasing our budget in the internet, through banners and interactivity, to be more in touch with this consumer."

When Miele Hong Kong, the kitchen appliance company from Germany, first open in Hong Kong in the late 1990s, the company initially used TV for the first stage of brand building.

"With TV, we created awareness and noise with moving images, but over the years as our advertising diversified, TV is expensive and we have shifted our budget to other means,"

Carmen Ho, head of marketing and brand of Miele Hong Kong, says.

Currently, Miele concentrates in print media with titles including Prestige, Hong Kong Tatler, SCMP Post Magazine, Hinge and Perspective.

She says, "Our business has a lot to do with image, and magazines contain a lot of luxury lifestyle and fashion brands. So we focus on print for our image campaigns."

While there is no concrete way to track the response of advertisements, Ho believes Miele is now more well-known in Hong Kong through print campaigns. She says, "We use targeted titles, not mass media. It's more about a qualitative audience and we receive a lot of comments from customers and business partners who have seen our campaigns."

For luxury property developer, Pacific Century Premium Developments, it executes its campaigns through various channels - TV, radio, magazines and billboards - depending on its target audience. By using magazines, the company is able to present beautiful images of their properties and provide detailed information.

With properties including the Bel-Air residence in Cyberport, executive director of Pacific Century Premium Developments, Wendy Gan, says, "For different stages of the launch, we will choose different media. In the initial stages we used TV when people don't know about the property. But then we supplemented it further with details in print magazines."

As the city's appetite for luxury goods doesn't show any signs of slowing down, the synergy between high-end brands and luxury magazines continues to grow.

Burlot of Blu Ink Media says, "Luxury brands aren't looking for the mass market, what they care about is the quality of eyeballs. The woman who buys Lancôme doesn't need to be a millionaire, but when you are selling watches worth HK$100,000 (S$18,220) or HK$1 million dollars (S$0.18 million), you are going to care that you're reaching the right people".

 

 

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Do readers read advertorials?

 

More and more publications are working with advertisers to create advertorials or paid editorial space. But do readers value information paid by a company? Here's the lowdown from Singapore and Hong Kong magazines.

 

SINGAPORE TATLER

There's no fooling readers of Singapore Tatler when it comes to advertorials. The publication clearly tags the paid section with ‘Advertorials' or ‘Marketing Features', as well as creating a different font and page layout. Gilbert Cheah of Edipresse Singapore says its readers want to know what is strictly editorial and what has been paid. However, Cheah believes well-written, balanced and accurate advertorials are as well-read and accepted by readers as other parts of the magazine. He says the key to knowing your audience is to never underestimate their intelligence or try to fool them.

 

INMAGAZINE

For InMagazine, some 40% of the company's ad revenue is generated by advertorials. In addition to regular print ads, the lifestyle magazine sells its photography and editorial services to advertisers looking for extra coverage. Nouvelle Ho of InMagazine says advertorials express why each luxury brand is different, as well as bringing an insightful story to target readers. Ho says the magazine's job is to enlarge the beauty of the product and bring that essence to the readers. After a recent photography advertorial featuring GAS, the Italian fashion brand, conducted a survey and received feedback that advertorials were effective in creating brand awareness.

 

PRESTIGE

At Prestige, a large part of the magazine's success is due to its photography. Through striking images and by telling a story, advertisers have lined up to buy advertorial photography. But do readers mind? Anne Lim-Chaplain of Prestige, says people pick up the magazine to see the latest luxury products and advertorials give readers more of an opportunity to see what's out there in the world of luxury products and services. Lim-Chaplain believes in the right environment of an oversized, glossy magazine people love to look at ads, whether it's an advertorial or not.