Monday, October 20, 2008
Readers feel the Pinch, but Glossies keep their Sheen
By Stephen Brook
As the economic downturn slides towards a recession and magazine publishers peer into the abyss, fervently hoping that the credit crunch does not beget a circulation crunch, they pray that women will value their glossy magazines as much as they value their lipstick.
Advertisers are slashing their budgets more savagely in the third quarter of 2008 than at any time in a decade, with main-media advertising, including that of magazines, the hardest-hit. But it seems that glossy magazines are riding out the storm. Just as sales of lipstick are predicted to.
'There's a theory that in times of recession sales of lipstick go up,' says Alan Brydon, head of press communications at the Media Planning Group, which plans and buys advertising for companies. The theory is that women still want luxury and sales of beauty products are a convenient and satisfying way of getting that. He thinks that the top-end glossies such as Vogue, GQ and Elle will not be severely hit by a circulation slump nor a plunge in advertising revenue. Even though they will be premium products in a recession, their readers and advertisers will still want them.
'Monthlies are in a good place because they are hugely good value,' Brydon says. Women are not going to sever the special emotional connection that they have with glossy magazines, even if they are feeling the pinch, 'for the sake of £3'.
Across the industry there are positive signs. As a weekly glossy, Bauer Consumer Magazines' Grazia should act as a bellwether for the market. Circulation has been solid in October, despite the stock market shocks, and this month it has achieved a record amount of advertising - 80 pages in one issue. 'Money may be tight, but people can afford £1.90,' says managing director David Davies.
Over at the Wall Street Journal, WSJ., the glossy that launched in September, will bring out its second issue in December. There are plans to convert WSJ. from quarterly to monthly next September, recession or no recession.
But in harsh times such magazines are at risk of a backlash, particularly if they indulge in frothy consumer exuberance, such as this week's Grazia: 'Meet the fashiorexics - "I spend £3 a day on food - and £1,000 on dresses".'
Can you still be ostentatious in the middle of an economic downturn? Guardian columnist Polly Toynbee thinks not, and last week witheringly contrasted carnage on the stock exchange with the arrival of the Financial Times' very glossy and very profitable monthly magazine How to Spend It, which can rake in about £1m in advertising revenue per issue. 'The day there was cardiac arrest on the stock exchange, with carnage in every market, was also the day How to Spend It slipped out between the crisp pink sheets of the Financial Times. This was the magazine's well-timed Bonus Issue. Oh joy! Here is the zeitgeist publication of the last reckless decade,' Toynbee wrote.
Gillian de Bono, editor of How to Spend It for eight years, was not afraid to return fire. 'There are still an awful lot of people with an awful lot of money,' she said. 'People spending money is what is going to turn this economy around.' She pointed out that FT readers were high-end and not sub-prime and defended the 'perfect hi-fi' feature (price tag £200,000) that Toynbee took aim at. Anyone buying hi-fi at that price would be handing the government £35,000 in taxes, countered De Bono, which could only be a good thing.
But other magazines are altering their tone as the downturn bites. Elle, the fashion title published by Hachette Filipacchi, introduced a column called The Credit Crunch Shopper, for readers who want to wear the trends but save cash. This month it features a silk-chiffon blouse from K by Karl Lagerfeld at £190 a pop. 'The Elle reader will spend that money,' editor-in-chief Lorraine Candy says confidently. But she admits: '"Must have" or "it bag" we have to avoid now,' she says. Next year the magazine will feature more real-life stories about their readers, as a way of responding to circumstances.
A survey of 4,000 Elle readers found that they were determined to keep shopping. It showed that 33 per cent of respondents' shopping habits remained unaffected by the crunch. 'But they are being a lot more elegant in the way they buy. The huge flurry of instant gratification shopping in the lunch hour - I don't think they are going to be doing that anymore,' Candy says.
The advertising downturn has not hit Elle. Candy says that its volume of fashion advertising rose this year, although beauty advertising struggled. December's issue will be a robust 372 pages.
But the credit squeeze has already claimed its first glossy victim. Women's monthly Eve folded in September, just five months after a relaunch. Publisher Haymarket bought it three years ago from the BBC. The magazine employed 56 staff and most lost their jobs.
At the very top of the market the good times continue, with others set for bumper December issues and steady circulations. But next year is an unknown quantity, even though big luxury conglomerates including Gucci and LVMH plan to boost advertising spend.
At Condé Nast, the December issue of men's magazine GQ - a 20th anniversary special - will be a whopper at 584 pages. 'It will be the fattest GQ in any country ever,' says managing director Nicholas Coleridge. December Vogue will also be bigger than one year ago, at about 450 pages with 243 of advertising. But Glamour, the glossy aimed at the Cosmo generation, has been hit. Its ad volume fell after Condé Nast refused to cut its advertising rates.
'For us it has been a very confident 2008 that hasn't seen any erosion in the last quarter. Having said that, I expect next year to be more challenging,' Coleridge says.
Condé Nast is forging ahead with plans to launch not one but two high-end magazines next year, when Britain could be mired in recession.
The company poached Katie Grand from Bauer, which published her magazine Pop, to launch a twice-yearly fashion and style magazine. It will be called Love, and appear in February with a £5 cover price. The launch of a UK version of glossy US technology magazine Wired will follow months later. Coleridge says Condé Nast is planning for the long-term and the launches will be smart niche publications. 'It is not like launching a super-tanker.'
Coleridge is enough of a veteran to remember the last severe media recession of 1990 to 1992. Then advertising pages fell, but a big difference this time will be the strength of the luxury companies, which have grown into vast international concerns and should be able to weather the downturn better.
Brydon says the luxury houses are being careful, but they are not giving up their cherished positions in the front of book of high-end magazines. To do so could mean that they lose their slots for months, if not years. 'It is almost like a nuclear deterrent. You can't be the first to blink,' says Brydon.
There is still the risk that glossy magazines will leave a bad taste in the mouth of readers who lose their bonuses or, even worse, their jobs.
But Coleridge denies his stable of magazines is ostentatious and says they merely fulfil their journalistic duty to report what is out there. 'Readers always want to see the best of what's available.'
'A lot of it is about dreaming,' says Jeremy Langmead, editor of upmarket men's title Esquire, who predicts magazines will provide more of that next year.
'I am not going to rent Richard Branson's house on Necker Island, but for 10 minutes I am going to imagine I am lying on that beach.'
A survey of 300 men by trend forecasters Future Laboratory for Esquire identified a high spending group the magazine dubbed Intelli-gents. 'These guys were prepared to spend more money at the higher end because they wanted to be connoisseurs,' said editor Jeremy Langmead. 'They want to own a wine library, not just a wine cellar.'
Elle magazine carried out an online survey of 4,000 readers aged between 18 and 55. It found 33 per cent were defying the credit crunch, saying their clothes-shopping habits had been unaffected. Forty-two per cent said they were prepared to sacrifice a night out in favour of shopping.
Grazia has reported on a new type of consumer: the fashiorexic. Tabitha Somerset-Webb, a handbag designer, confessed to spending £3 a day on food to fund her £1,000 dresses.
Lisa Burprich, who works in TV production, eats supermarket own brands and tinned food to afford £200 7 For All Mankind jeans every two months.