VOGUE’S DEALS ON WHEELS

Byline: Lisa Lockwood

NEW YORK — Some called it gutsy. Others said it’s nothing more than glorified rate-busting.
Still others suggest that Vogue, clearly fashion advertising’s number one magazine, appears desperate, even a little afraid of the competition — particularly Elle, as Harper’s Bazaar continues to fade.
“The last time [Vogue] had serious competition from Elle, they fired Grace Mirabella,” remembered one media executive.
The magazine doesn’t appear to be contemplating anything so draconian this time, but Vogue’s publisher, Ron Galotti, is getting down and dirty. His newest guerrilla tactic: Offering key advertisers a month’s free bus ads if they pull business from the competition to put more dollars into his magazine.
“It sounds like an act of desperation. That’s heresy. You never let your competition see you sweat,” noted one magazine observer.
Some said the move may benefit Vogue in the short term, but in the long run, it’s only likely to whip up more competitive frenzy and lead to more pressure on publishers to make deals.
Galotti, never shy about taunting his competitors — especially Hearst and Hachette — for rubber rates, has been limited by CondE Nast’s strict pricing policy.
“Giving space away is easy. Selling it is a job,” said Galotti.
The Vogue offensive was far from pro bono: The program cost the magazine $1 million for the year.
According to Transit Displays Inc. (TDI), ads on 10 super king buses for one month would cost an advertiser $10,820. The fact that magazines have been losing ad pages in recent years to outdoor advertising, particularly on buses, made Galotti’s offer timely — but not necessarily good for the magazine business.
According to Galotti, it gained Vogue “40-plus pages in February, March and April.” A single four-color, full-page ad in Vogue, at the open rate, is $63,900.
Still, the magazine is not exactly going gangbusters. For the first quarter, Vogue is virtually flat with the same period in 1995, with 547.2 ad pages. In the same period, Elle solidified its number-two position, gaining 7.2 percent, with 403.7 pages. Harper’s Bazaar continued to slide, down 4.8 percent, to 371.9 pages, according to Media Industry Newsletter.
Elle, run by the man Galotti has nicknamed Carl “Monty Hall” Portale, claims Vogue’s bus promotion backfired, and he cited Elle’s strong March business as evidence. For the month, Elle’s ad pages were up a whopping 44.2 percent to 239.6, while Vogue’s were up 12.5 percent to 344.1. Harper’s Bazaar’s ad pages in March were off 5 percent to 222.6.
“When it comes to market share, we won that game,” said Portale. “Our March issue was up 43 percent. Vogue’s market share ploy didn’t work, in my opinion.”
Galotti countered, “It was my largest March in seven years. We’re 100 pages bigger [in March] than Elle.”
Rhetoric aside, the exact nature of Galotti’s bus sale is something of a mystery, and apparently not all major advertisers were offered the same terms.
To get the bus ads, Galotti asked some advertisers to reduce their presence in Elle and Harper’s Bazaar and to give Vogue their entire spring media buy.
In other cases, Galotti simply rewarded key clients who give Vogue the bulk of their ad pages, such as LancOme, Escada and Prada, and those who increased their Vogue pages, such as ICB and Donna Karan.
In yet another case, Todd Oldham Jeans got the bus perk merely for adding Vogue to its ad schedule. And still some others told WWD they were given the bus ads for defensive reasons, as Vogue was afraid of losing their business.
In the end, not everybody was pleased with their 10 buses that went cruising around Manhattan and some noted the ads appeared to promote Vogue more than the fashion brand.
“Because I didn’t have all 100 buses for the month, and only had 10 buses, you barely saw the Tse ads,” said Rebecca Shafer, creative director of Tse Cashmere. “It didn’t prove too much of a carrot on a stick. It was great for Vogue [because of the impact of the 100 buses a month], but not for the advertiser,” Shafer added.
“Media planners are smart enough not to be persuaded by a couple of bus boards in New York City,” said Peter Arnell, chairman of The Arnell Group, an ad agency here, who didn’t take Galotti up on the offer.
“My feeling is that Vogue should not act as a media placement service. Honestly, I think it’s truly a nice bonus, but it’s just that,” noted Arnell.
“It’s a nice idea, but if you look closely at the deal, I was offered 10 buses [for Capezio],” said Mindy Gale, vice president and creative director at Graphtech Group, an ad agency here. “When I buy a schedule, I usually buy 250 buses a month. It’s nice, but it’s not going to enhance your media schedule.”
Still, some advertisers wondered why they weren’t even approached.
“It’s strange that Ron [Galotti] didn’t call me about Abercrombie & Fitch and Bottega Veneta,” said Sam Shahid, owner of Shahid & Co., a New York ad agency, although one of his other clients, ICB, did get the offer.
“Everybody loves to get something free,” said Shahid.
If Galotti’s selection process ends up ruffling more than a few feathers, it won’t come as a surprise, as he’s never been known for the white-gloved approach. One need only recall his days at Vanity Fair, when his reputation as a gruff, take-no-prisoners salesman got him escorted out the door. Eleven months later, he was rehired by Vogue, and Steven T. Florio, chief executive of CondA Nast, called him a “better man” who would now “direct his gun externally, not internally.”
But some view Galotti’s latest attempt to plunder ad pages as a cheap shot.
“Fair is for kids,” responded Galotti. “This isn’t about being fair. I’m trying to give my clients the best advertising I can. It’s about giving our clients incremental exposure that works both for Vogue and the client.”
Galotti said he had no problem asking advertisers to reduce pages in other magazines. “This is what we do. This is not a hobby.”
And the Vogue publisher insisted the move was directed equally at Elle and Harper’s Bazaar: “Harper’s Bazaar is as vulnerable [as], if not more so than, Elle. Harper’s Bazaar has got enough trouble. We take it out of both. We don’t care where it comes from.”
The tactic may appear aggressive for the fashion world, but it’s not new to magazine publishing.
“It’s not unprecedented. In the big leagues, you play hardball,” said Martin Walker, a magazine consultant. “Years ago, Time-Warner had a Maxi-Plan where you got discounts based on incremental share of market,” he said. Walker said CondA Nast has always been much more aggressive with added-value programs, since it does not negotiate rates.
Among those who joined Galotti’s bus brigade were Prada, Escada, Todd Oldham Jeans, Dolce & Gabanna, Tse, Isaac Mizrahi, Charles David, Gianni Versace’s Blonde, DKNY, Paloma Picasso, LancOme, Gucci and ICB.
The move did win a fair share of praise, although several media observers noted Vogue is fixed in the number-one position in fashion advertising, and such a giveaway is more characteristic of the number two or three in the category. Others said it was just Ron Galotti being Ron Galotti.
Galotti has certainly managed to aggravate the competition.
“I think an idea that doesn’t sell the value of a magazine isn’t a good idea,” commented Jeannette Chang, HB’s publisher. Chang said several of her clients felt pressured to go with Vogue and, not surprisingly, she claimed some were sorry they took the offer.
“Did you see those ads?” asked Chang. “The clients are more upset that the ads talked more about Vogue than themselves. They felt they were short-changed. It just created more confusion in selling advertising, as though it wasn’t enough to sell the value of his magazine.”
Galotti said he sees no downside to the promotion, except for the fact that “there’s only a limited capacity in terms of availability.”
Asked how he thought competing publishers felt about the promotion, Galotti said, “I’m sure they’re reasonably cranky.”

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