AUGUST 04, 2014

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Advertising
Advertisers That Spend More in Magazines Show Sales Growth

Each year, Advertising Age publishes a list of the United States' 100 heaviest ad spenders. In 2013, 46 of those 100 advertisers spent more in magazines than they did in the previous year. Among that group, 78% saw an uptick in sales in the corresponding year. Some companies that made the list of heavier print buyers that also saw sales increase include:

  • LVMH, which spent $20 million more in magazines in 2013 in the United States and reported North American sales growth of $687 million.
  • Samsung spent an additional 25% in magazines in 2013 (+$7.7 million) and its sales in the Americas grew by 23% (+$12.1 billion).
  • Microsoft more than doubled its magazine spend in 2013 ($120 million versus $51 million in 2012) and sales increased in the U.S. by $2.5 billion. 
So what?

As we have seen in past years, increased magazine spending often corresponds with a healthier bottom line for many of the country's heaviest advertisers. CMOs across a range of industries -- auto, beauty, CPG, finance, media, retail and tech -- decided to commit further to magazines in 2013 and were able to report sales growth. That should help them maintain confidence in magazines as a key part of their media mix.

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How to Craft an Effective Advertorial

A new study from GfK Starch analyzes 2,022 advertorials that appeared in digital editions over the past two years, and identifies top performers and best practices. Advertorials are most commonly used by companies in the travel and beauty categories, followed by food, medicine and hair products. GfK found that although multi-screen advertorials were more widely noted, their engagement metrics were similar to those of single-screen advertorials, suggesting that the length of the ad does not matter as much as other factors. Other elements have a much stronger impact on ad effectiveness, such as tailoring the advertorial to the magazine in which it appears. GfK calls out a top performer from Allure – an Aveeno Clear Complexion ad that appears immediately after an editorial article on fighting acne. Effective advertorials also take advantage of the tablet’s capabilities in their call to action, feature interactive content that enhances the ad experience, and contain attention-grabbing imagery. Finally, advertorials that include lists or step-by-step instructions are highly popular among readers.

So what?

Advertorials are the original form of native advertising, one of the hottest categories these days. Consumers like to complain about advertising, but the data suggest that they are happy to interact with ads that they deem relevant and engaging. Well though-out advertorials, in print and in digital, could be the way to their hearts.

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Lifestyle/Luxury
McKinsey: Emerging Markets to Gain Significant Share of Luxury Market by 2025

According to a new report from McKinsey, 21 of the 25 wealthiest cities in 2025 will be in what are now considered emerging markets. This will represent a significant shift in a relatively short period of time as just four of today's 25 wealthiest cities are in developing countries.

Examining how this shift of wealth will affect individual luxury categories, McKinsey forecasts three categories to show phenomenal growth in the next decade: women’s ready-to-wear, spirits, and beauty. Emerging markets are expected to comprise 32% of the global women’s luxury fashion market by 2025, compared to only 8% of the market in 2004. The beauty category is projected to have similar growth, with emerging markets set to comprise 47% of the global beauty market by 2025, compared to 14% of the market in 2004. The growth of the luxury category will be highly concentrated in cities, in both developed and emerging countries. 

Mckinsey_luxgrowth

So what?

As more global citizens migrate into urban centers and emerging markets gain economic power, marketers must keep abreast of the dynamic global luxury landscape. Condé Nast International can be a valuable partner during this process as CN brands have already been established in many of the markets projected for significant growth.  

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Travel
The Majority of Travelers Trust User-Generated Reviews

Among Americans who plan to travel this year, almost four in five agree that online user-generated reviews are “trustworthy,” according to a report by Allianz Travel Insurance and Ipsos. Only one in six believe that user-written reviews are “not trustworthy” and 7% are unsure of how they feel about such reviews. Besides reading reviews, 40% of consumers who plan to travel this year also report sharing their own reviews online. Facebook is the top channel to share reviews (27%), followed by travel review sites (15%), other social networks besides Facebook (11%), consumer review sites (7%) and personal blogs or websites (6%). In addition to publishing their own experiences on social media, half of travelers cite social media networks as places they seek travel inspiration. Facebook is a top source for inspiration, with one in four using the site for summer travel ideas, followed by TripAdvisor (18%).

So what?

Reviews are permeating every part of consumers' lives and are especially trusted when it comes to travel. Travel reviews via social media are used throughout travel planning, from inspiration to booking, to checking in while traveling, and posting suggestions upon return. This trend makes it harder for traditional travel authorities to maintain their previous levels of influence, but also provides an opportunity to further engage consumers by providing places to learn from and share with other travelers by the way of comment sections, surveys, and curated communities.

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Quick Takes
Apple Has Lost its Stranglehold on Tablet Market
20140728tabletsbi

Source: IDC, Statista, Business Insider
Facebook Drives Far More Referral Traffic than Other Social Media Sites; Pinterest is Second
Social-media-traffic-referrals-july-2014-graph

Source: Shareaholic
The Music Industry's Revenue Has Been Cut in Half in the Past Decade
Music_revenue_v2.

Source: Recording Industry Association of America, Wall Street Journal
Condé Nast
Feedback, questions, ideas for future issues? Please contact:

Phil Paparella
Condé Nast Research & Insights | Associate Director
1166 6th Avenue, 14th fl. | NY, NY 10036 | office 212.790.6044 | philip_paparella@condenast.com

Contributors:
Tamar Rimmon | Senior Manager, Digital Analytics
Robyn Hightower | Manager, Research & Insights