Saturday, 22 December 2007

Luxury Advertising in the International Herald Tribune

One of the problems facing the International Herald Tribune has been its consistent inability to prove to the advertising community that its readership is made up of senior business decision makers in large companies in Asia and Europe, and not expats, academics and people like me.

For many years, the companies who advertised in the likes of the IHT, the FT, the Economist, WSJ etc, were obsessed with reaching this target audience, and it was winning advertising aimed at them that was the difference between the IHT being profitable or not.

As a result, the IHT did various things, particularly starting in 1999 to expand its readership in this audience sector, or at least try and improve its performance on the various readership surveys that measured them (how they did that is another story for another day). Editorially this meant beefing up the business news, hence the Bloomberg deal and what will be soon its replacement with Reuters.

The other thing the IHT did was to try and demonstrate that its readership was, if not strong on senior business decision makers (who largely read the FT as far as the international English-language press was concerned), strong on what they call Opinion Formers or Leaders. This is a wide group that includes journalists, members of government, academics etc.

It was hoped that if the IHT couldn't prove to advertisers it had the business readers, it could at least show it had the Opinion Formers.

Accordingly, just like the FT was the driving force behind the readership surveys that measure business readers (e.g EBRS), the IHT got off the ground their own 'independent' survey measuring European Opinion Formers. Although they still trailed the FT and The Economist, who quickly came on board as co-sponsors of this survey, they did a lot better on this survey than they did on the business readership surveys.

(For me, no surprise there: the IHT has never been the daily read of enough senior directors of large international companies, for the simple reason that if you are seen with your feet up in your office reading the FT or A.N .Other business title, you are seen as 'working'. Put your feet up with the IHT and the perception you project is quite different.)

Doing well on Opinion Former/Leader surveys is important: it helps land campaigns like the current one from Exxon.

But, unlike in the USA where public and corporate advocacy advertising is a much bigger sector, outside the USA it remains relatively small - for now.

(The folk at the NYT took a while to understand this btw, completely unable for a while to get their heads around the fact that department stores, movie companies and advocacy campaigns don't make up any sizeable sector in international advertising - as they do for the NYT.)

So what to do? The business advertising was/is going to the FT, the advocacy advertising just isn't out there in enough quantity and to make matters worse, more and more business reader aimed advertising was migrating to the web where it could be much more targeted by subject.

The IHT could always fall back on one of its key brand perceptions (other than that is for and read by Americans): that it is read by what is known as High Net Worth Individuals.

What's fascinating to observe, as the editorial increasingly speaks to the super rich, particularly in the back of the book (see the blog on the recent Top 50 Luxury destinations), is that the super rich have of course exploded onto the scene as never before - the result of hedge funds, private equity outfits, entrepeneurs and petrodollars from the Middle East to Russia.

HNWI are IN in a BIG way.

And that's all VERY good news for the IHT.

I know its near Christmas, which always weights this type of advertising, but let's take a look at the advertisers from last Tuesday's paper (Atlantic edition)
  • Chanel
  • Ritz Carlton Moscow (possibly barter as part of their hosting of the Luxury confernce)
  • Georg Jensen (luxury watch)
  • Seiko (their top of the line luxury watch)
  • Nespross Machines (aimed at HNWI)
  • Graf (luxury jewelers)
  • LG mobile phones (again, their top of the line range aimed at HNWI)
  • Tudor (luxury watch)
  • Prada
  • Sir Winston (trendy upscale bar/club in Paris)
  • Hublot (luxury watch)
  • Moussaieff (luxury diamonds)
  • Cartier

The only advertiser that falls within the traditional EBRS category is Turkish Airlines.

The question for IHT readers is this: is there a deliberate move away from EBRS/ABRS land and into an exclusive, upscale world of luxury advertisers, led by editorial of the type that Mr. Frommer was so interested in?

Are the publisher, editor, IHT marketing, editorial and advertising on the same page here?

Is this a new strategy? That is to say: Forget the boring business people and just focus on the needs, editorially and consumer habits, of the mega rich.

The mega-rich don't show up on surveys (because they don't take part and are hard to reach) and if the IHT brand can just project a sense, editorially, that the paper is aimed at them, could this be the way to IHT profitability?

Anwser: a mix of 'I don't know' and 'I doubt it' as far as everyone being on the same page - my guess is that some players on the commercial side could see this as a way forward; editorial resistant or only partly in agreement.

Certainly as far as the IHT's own brand advertising is concerned (they have dropped The Broader Business Perspective campaign, and replaced it with the 'I don't know what it's saying' campaign) there is no evidence (yet) that the IHT is trying to reposition itself back to its fin-de-siecle glory days of being just that - the paper of record for HNWI Europeans (and here I am talking c. 1900, not 2000).

One way or another there are several pulls on editorial and advertising and marketing, and as yet, there isn't evidence of a coherent strategy, at least not from what I can judge as an outsider.

But the IHT as a luxury brand? And the resulting editorial that might go with it?

It's an idea, but how many existing IHT readers, who are not HNWI and who would be lost along the way, would be a problem. Not an insuromountable one.

Here's how it could play out: go for widest possible demographic on, relying heavily on the brand's credibility and AP material - the traditional base of the general interest newspaper - and in print head off to HNWI land.

Charge more for the print edition, make it a brand status symbol for HNWI, and leave for the global masses.

Of course I have my own ideas as to what they should do and how it could be done, but I'm not being paid so I'll stop here for now.

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