Outlook 2005: Publishers Read Opportunity in Affluent Market
Oxbridge president Trish Hagood explains the phenomenon that speaks to the nation's changing demographics and how publishers are reacting to the opportunity.
A keyword search yields rich clues regarding the rapid development of a key segment of magazine publishing. By using MediaFinder's keyword search application and searching based on words such as luxury, affluent, wealthy and upscale, we found plenty of titles in a variety of categories - home, horses, lifestyle, automotive, golf and travel - that have seen remarkable growth.
In addition to the new magazines, there is the phenomenon of the 25-year-old The Robb Report that, under the new management of CurtCo Media, repositioned itself as a more exclusive publication by reducing its circulation and raising its ad rates.
With the makeover, companies were eager to advertise in a magazine whose ads would be read by an exclusive audience - the most affluent consumers of nearly all luxury products and services. As a result, the ads became more focused and The Robb Report sold more of them.
CurtCo's new strategy is to focus on the core demographic - the ultra affluent - and to add new publications focused on luxury homes and luxury boats. The company purchased ShowBoats International and launched Robb Report Vacation Homes. In addition, it recently acquired Gulfshore Media Inc., a regional group of upscale business and lifestyle magazines.
So, just how wealthy is wealthy in this new publishing niche?
HorsePeople pitches to the horse-loving owners of $750,000-plus homes in Southern California, while OT (OverTime) targets former professional athletes with an average income of $1.57 million. OT is the new launch of veteran NFL player Ryan McNeil, who is no stranger to his market. He also is founder of the Professional Business and Finance Network, which offers business seminars to this same market.
Creating a magazine catering to the tastes and needs of these athletes was a natural for McNeil. He mails 25,000 copies to his micro-audience and already has turned a profit. About one-third of the 100 pages of OT are ads.
What makes the affluent population a popular niche market today?
There must be something to those tax cuts after all. Wall Street's recovery certainly has helped, and then there's the "comfort zone factor." After 9/11, people tended to stay closer to home and to spend money now. Affluent consumers spent their money on local travel and automotive interests, home and home-entertainment products, entertainment and lifestyle. Magazines that already catered to these markets prospered, and new magazines were launched to meet the demand.
In the world of affluent magazines, bigger is better. New publications like Uptown, The Green, Trader Monthly and Golf Connoisseur all opted for luxurious, oversized formats and high-quality paper to create a rich look. Subscribers typically pay much more per subscription and per copy for these boutique publications.
Higher production costs for these magazines are tempered by the use of modern printing equipment, and publishers think the small, incremental costs pay off.
Targeting the wealthy is only one strategy for finding niche markets. Whether it is cable versus network television, satellite versus terrestrial radio, Web logs versus newspapers or niche magazines versus mass-market publications, the trend is visible everywhere. Web advertising is finally taking off because of new keyword applications for targeting markets.
Moreover, the old demographics no longer suffice. Witness the death of the 27-year-old American Demographics magazine. Late last year, Primedia Inc. sold the title to Crain Communications Inc. to be "folded" into its flagship Advertising Age trade weekly.
ZIP code marketing, by itself, is passé. Consumer patterns have outpaced the census data. They can no longer be successfully segmented by age, gender, education, occupation or income alone, or even by the lifestyle patterns favored by fans of psychographics.
Notice that the target audience of the luxury, niche magazine is not just the wealthy per se. It is more than that. It is the wealthy golf audience, or the wealthy stock trader audience, or the wealthy traveler, homebuyer, car owner or shopper. It is the ultra niche.
Who is going to define the new demographic?
At a time when the Magazine Publishers of America has launched a $40 million promotion pitching print to media buyers, print has never looked better.
The decline in ad revenues over the past few years caused a shake-up in magazine titles and missions. The result is an advertising vehicle more finely tuned to its audience, more in touch with its own reader profile, whether mass market or niche. Last year's many new magazines prove the popularity of the medium, and niche publications demonstrate how the market can be successfully sliced and diced.
Marketers can depend upon the magazine to maximize their markets, confident that their advertising messages will hit the bull's eye. The growth of magazines targeting the rich reflects the unique ability of magazines to tap into the zeitgeist - the spirit of the times.
E-mail Trish Hagood at firstname.lastname@example.org