Rolex Canada CEO Victor Royce is, funnily enough, late to the Internet party.
While the Internet and mobile are taking an increasingly prominent role in marketing plans, Rolex remains steadfast in its support of traditional media. According to Nielsen Media Research, $1.5 million of the $1.7 million the 102-year-old company spent on measured media advertising in 2006 went towards either magazines or daily newspapers.
The luxury watch company’s in-house media department builds its plans around a list of publications that includes Elle, Canadian Geographic, Report on Business, FQ, Time Canada, SIR and various city magazines. That’s augmented by daily newspapers like The Globe and Mail, and a smattering of TV.
“Alternatives have come along over the years,” explains Royce, “but so far we haven’t seen anything that truly is going to replace the approach we currently take. I firmly believe you get the best results from the print medium.” (Rolex’s luxurious print ads boast a who’s who of celebrities from the arts and sports worlds, including the world’s top-ranked tennis player, Roger Federer, cellist Yo-Yo Ma and opera star Placido Domingo.)
“The consumer needs to see the product. This is one of the big advantages of the glossy magazine look, because you can really show it exactly as it is. The consumer can see it in a very clear, concise way.”
“Magazines are going to give you a much more beautiful image of a luxury product, like a Louis Vuitton handbag, than a transitory image on the web,” agrees Karin Macpherson, managing partner of Toronto media management firm The Media Company. “The stuff just looks great, and it hangs around for a while. Vogue magazine hangs around for months and months-it doesn’t just disappear.”
Larry Rosen, chair and CEO of upscale men’s fashion retailer Harry Rosen, says his company likes magazines so much it operates its own custom book, Harry. Marking its 10th anniversary this year, the twice-yearly publication-which is distributed to the chain’s top 100,000 customers and has a newsstand presence of about 10,000-averages 50 pages of paid advertising from the likes of Mercedes, Lexus, Armani and Hugo Boss (a page sells for $16,500). “It’s a smashing success,” says Rosen. “To the point where we can’t take all the advertisers.”
Harry is also selective about the type of ads it accepts. “I will only take advertisers whose brands are consistent with Harry Rosen,” he says. “I’ve turned down all sorts of ads. I think what makes it a valuable vehicle is the consistency of the kind of advertiser that’s in there. The reader knows that it speaks to a certain element.”
The look and feel of print isn’t the only reason luxury marketers are attracted to the medium. Canadian households with an annual income surpassing $100,000 read more magazines and newspapers and spend less time with radio and TV than lower income households, according to Print Measurement Bureau (PMB) data (see charts, page 32). For instance, households with an annual income of $100,000-150,000 and $150,000+ read more magazines per month-an average of 6.6 and 6.4 issues respectively-than households who make $50,000-100,000 (5.5) and households under $50,000 (4.5).
Such data indicates that reaching luxury consumers is a fairly straightforward proposition. However, PMB data also reveals that households with income above $150,000 spend an average of 8.5 hours per week on the Internet (excluding e-mail) and households between $100,000-150,000 spend 7.2 hours. That compares with 5.9 hours per week for households earning $50,000-100,000 and 4.2 hours for households with income below $50,000.
The increasing democratization of luxury means that marketers face what Macpherson says is a “big debate” about straddling the line between traditional media and the “universe of interaction” that is digital media. “They have to be so careful, because the [luxury] brand is the hero,” she says. “It’s a fine line between still providing that mystique and that notion of exclusivity and still making it democratic and for the masses.”
The Media Company handles media buying for several luxury brands, including BMW and LVMH Moët Hennessy Louis Vuitton S.A., a French holding company that is the world’s largest luxury goods conglomerate (its brands include Louis Vuitton, Tag Heuer, Givenchy and Christian Dior). In the early ’90s, Macpherson says, luxury goods marketers were largely focused on baby boomers, those former hippies who had exchanged their bongs for Bimmers and were at the peak of their earning power. Now, the focus is shifting towards their offspring, the Gen-Xers, who grew up surrounded by material goods and are now reaching their maximum earning potential.
“As the boomer generation is at the front end, their need for material products is going to go down,” says Macpherson. “The younger groups [are arriving] at the top of their income potential. They’re going to become a very, very powerful group in this segment.”
“There is a need today to reach the younger market,” agrees Rolex’s Royce. “The level of affluence has reached a young group, no question.”
With an average customer age of about 38-and roughly a quarter of its clientele under 30-Harry Rosen continues to use print advertising while at the same time dabbling in everything from banner ads on the national dailies’ websites to paid search.
“Every time a 65-year-old drops out of the workforce, and buys less clothing, we have to add a 22-year-old who’s going to be starting his life cycle buying quality clothing,” says Rosen. “You’re always finding new vehicles and new ways of keeping younger people coming in.”
A younger target audience means a younger-skewing media mix, one not as reliant on traditional media choices. While luxury goods marketers say they aren’t abandoning traditional media, they are augmenting it with everything from online to events to “experiential” marketing.
BMW Group Canada, for example, has partnered with Fairmont Hotels & Resorts and luxury travel company Horizon & Co. for a summer promotion called “Cruising the Rockies.” It’s a high-end vacation package, in which consumers pay around $4,000 for the opportunity to take a BMW Z4 Roadster on a six-day drive through the Rocky Mountains, stopping at exclusive Fairmont resorts in Lake Louise, Jasper and Banff along the way. It’s being promoted through Fairmont Hotels’ custom title, Fairmont Magazine.
John Capella, brand communications manager for BMW Group Canada, says the automaker’s marketing tactics differ depending on the campaign objective. It’s supporting its “open-air” line of vehicles-including the Z4 and its 5 Series Cabriolet models-with online sponsorship of the America’s Cup yacht race on TSN Broadband, while its xDrive all-wheel drive system is being promoted through a series of comparison drive events taking place this summer in four Canadian cities.
These invitation-only events enable participants to test drive BMWs equipped with the xDrive system, as well as competitors’ cars, at a closed track weekend event (in Toronto, the event was held earlier this month at Downsview Park). “It’s allowing people not just to see the ad in magazines but allowing them the experience of what driving a BMW is all about,” says Macpherson.
BMW competitor Volvo Cars of Canada, meanwhile, has doubled its spending on event marketing in the past year, says president and CEO Steve Blyth. The bulk of those dollars are spent on established events like the Volvo Golf Challenge and Volvo Ski Series, but it also includes new events like Local 416.
The latter takes place in Toronto this month and involves artists creating work inspired by the automaker’s new C30-a three-door coupe aimed at urban professionals 25-35 with no children (a marked contrast to Volvo’s line of family-friendly vehicles). Each week for four weeks, the work of one artist, a DJ and a fashion designer will be featured at a downtown art gallery. The event is being called a “physical extension” of Volvo’s global positioning of the car as “a product of free will.”
The car company’s presence at Local 416 is subtle, says Blyth. “We want to be associated with it, we want to be seen as the hosts, but we don’t want to be seen to compromise the arts and the artists.”
Volvo is launching four new vehicles this year, which has allowed the company to expand its marketing budget beyond mainstream media. And while daily newspaper and TV advertising is still part of the mix, Blyth echoes by-now familiar sentiments about its efficacy. “Traditional mainstream media is getting more and more cluttered and it’s more difficult to get your message through and get any traction,” he says. “That’s why we’ve moved to a number of non-traditional media mixes.”
This year, Volvo partnered with Cineplex Entertainment on an online contest built around the third installment of the Pirates of the Caribbean franchise. The car company offered a grand prize of its XC90 SUV, which was promoted through in-theatre ads, along with full-page ads in Famous magazine and on websites (and attracted more than 27,000 entrants). Volvo also partnered with the youth-oriented online community iCoke on a promotion offering a C30 as a grand prize.
The intention, says Blyth, is to create recognition of the Volvo brand among younger consumers. “There’ll come a day when everybody needs to buy a car, I expect, and we’d like them to think Volvo,” he says.
While Blyth lauds the Internet as a cost effective means of targeting consumers, Rolex’s Royce views it primarily as an informational tool for potential Rolex customers. His company, he says, has no plans to expand its current branding efforts beyond traditional media.
Given the Internet’s continued proliferation, however, it might be only a matter of time.
