For Luxury Brands, Less Money to Spend on Ads

From the article: http://www.nytimes.com/2008/11/24/business/media/24luxury.html?_r=1

“After getting through most of this year unscathed, luxury brands are suffering. Rich consumers who were relatively insulated from the economic downturn continued spending, but that has changed in the last few months. While luxury spending began to fall slightly from June, in October alone, it dropped 20.1 percent, according to MasterCard SpendingPulse, which estimates consumer spending in the retail and service sectors.
That drop-off means more bad news for magazines and newspapers in the United States that had grown increasingly dependent on luxury advertising.”

Prettymuch, this also has an effect on publishers, who are now cutting back on the frequency of their publications.

“High-end advertising was one of the few strong advertising categories earlier in the year.”

“Other high-end projects, and the advertising that would accompany them, are being delayed or canceled. General Motors is postponing the introduction of the Buick LaCrosse until January, Ford is holding off redesigning its Volvo S60 sedan and XC90 sports-utility vehicle, and Chrysler has stopped production on its Aspen hybrid sports-utility vehicle. Orient-Express Hotels canceled new buildings in Miami; Cartagena, Spain; Zambia; and Puglia, Italy. Donald Trump is postponing a $300 million development in Philadelphia, and the Ritz-Carlton Hotel Company has halted projects in Florida, Vancouver and California.”

As an intern in the media department of an ad agency, I’ve definitely noticed firsthand the impact this is having on our luxury resort clients. Some magazines are no longer being published. And client budgets are certainly less than they were last year.

On a brighter note, have a great thanksgiving everyone. Make sure to count your blessings!