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Black, White and Red All Over: Newspaper Ads Dive
The first quarter of 2011 brought no relief for the newspaper industry, which suffered another round of declines in print advertising revenues.
The first-quarter results from the Newspaper Association of America stand out against a general recovery in ad spending for other media, and suggest that newspaper print ad revenues are locked into a permanent, long-term decline.
Total print advertising revenues fell 9.5% from $5.25 billion in the first quarter of 2010 to $4.75 billion in the first quarter of 2011, according to the NAA -- the lowest first-quarter revenue figure since 1983.
Those stats are down 55% from 2006, when total first-quarter print revenues came to $10.5 billion. This marks the 20th straight quarter of year-over-year print revenue declines.
As in previous quarters, the losses were spread across all of the main advertising categories. National advertising fell 11% from $1.04 billion to $924 million; retail fell 9.5% from $2.95 billion to $2.67 billion; and classifieds fell 8.15% from $1.25 billion to $1.15 billion.
Within the classifieds category, automotive slipped 4.7% to $266.5 million and real estate tumbled 19.3% to $197.7 million. Only recruitment increased, ticking up 4.3% to $165.7 million. All other types of classifieds fell 8.5% to $520.8 million.
The one bright spot on the newspaper balance sheet was online ad revenues, which increased 10.6% from $730.4 million to $807.9 million, representing 14.5% of total industry advertising revenues. Combined online and print ad revenues decreased 7% to $5.56 billion.
(Source: Media Daily News, 06/01/11)
Olsen Twins Use Made-in-America Hook to Lure Wealthy Shoppers
The Made-in-America label has undergone a deluxe makeover. Everyone from Brooks Brothers to the Olsen twins is using it to hawk luxury goods, a tactic made popular by blue-collar brands such as Levi Strauss & Co. and Chrysler Corp.
Menswear maker Joseph Abboud has a “Made in USA” banner on his website with a link to footage of the Massachusetts factory that crafts his suits. Brooks Brothers has factories from New York to North Carolina, and The Row, the luxury fashion line from Mary Kate and Ashley Olsen, manufactures most of its clothes in America’s biggest cities.
“There is a customer that appreciates that the product is made in the United States and is willing to pay for the difference,” Brooks Brothers Chief Executive Officer Claudio Del Vecchio said in an interview. While Brooks Brothers made few goods in the U.S. 10 years ago, today a “large percentage” is American-made, he said.
The U.S.’s reputation for quality is benefiting upscale labels as more Americans question where their goods come from, and how their buying affects the economy, said Pam Danziger, president of Unity Marketing Inc.
“Made in America feeds into the values proposition,” she said. “They are voting with their money not just for U.S. jobs, but for a way of life. In 2007, they were on a spending jag -- they weren’t thinking about things like this.”
Now that they are, luxury-goods makers in the U.S., the largest market, stand to profit: Almost two-thirds of wealthy consumers say they try to buy American when they can. Global spending on luxury apparel, accessories, watches, jewelry, perfume and other products may climb to 185 billion euros (about $260 billion) in 2011 from 172 billion euros last year, excluding currency moves, Bain & Co. said May 3 in a report.
More than three-quarters of affluent consumers surveyed this year by American Express Publishing and the Harrison Group, a luxury research firm, said they like brands made in America, up 5 percentage points from 2008. Sixty-five percent say they try to buy U.S. products whenever possible, a 3-point gain.
Among more than 1,300 affluent shoppers surveyed by Unity in April, the U.S. ranked highest on an index measuring the quality of its luxury goods manufacturing, scoring 267 compared with an average of 100, the Stevens, Pennsylvania-based firm said. That topped Italy and France, home to Salvatore Ferragamo Italia SpA and Hermes International (RMS) SCA, respectively.
Blue-collar goods have a history of using patriotism to attract U.S. consumers. Denim makers such as Levi Strauss have harked back to Wild West origins, while Chrysler, which has used the slogan “Imported from Detroit,” created TV ads urging prospective buyers to remember their American roots.
The self-made nature of much of America’s wealth may be one of the reasons the pitch is so appealing, says Andrew Sacks, head of of New York luxury ad firm Agency Sacks.
“There is a built-in inherent interest among those successful people to do whatever they can do to help,” Sacks said. Recent increases in labor costs in China, a sagging greenback and stalling U.S. economic growth probably will lead to more American manufacturing, he said.
Take Enfield, Connecticut-based Brooks Brothers. Almost all its suits are made in its factory in Haverhill, Massachusetts, while made-to-measure shirts and Black Fleece shirts are put together in Garland, North Carolina. The price on an American Brooks Brothers shirt is as much as $150, or 70 percent more than one made in Malaysia.
The Olsens’ women’s label, New York-based The Row, uses factories in its home city and Los Angeles to make fashions such as its $250 white T-shirts and $2,350 short dresses. The brand has found favor with the likes of First Lady Michelle Obama and actress Julianne Moore, as well as with critics: The former “Full House” child stars got a nomination this year for a new talent award by the Council of Fashion Designers of America.
Tiffany & Co. (TIF) has moved past its Northeast home turf and into the South by expanding its manufacturing base to Lexington, Kentucky. The New York-based company makes 60 percent of its jewelry itself, all of it in the U.S., compared with 20 percent 15 years ago, according to Mark Aaron, a company spokesman.
The Made-in-America mystique isn’t a requisite for success: Most of Polo Ralph Lauren Corp. (RL)’s goods are made outside the country, and Coach Inc. (COH), the largest U.S. luxury handbag maker, manufactures a small portion of its goods in the U.S.
Still, says Brooks Brothers’ Del Vecchio, making things in America is about more than just the label: It’s about having the goods to back it up.
“The quality is really the reason,” he said. “It gives us better control of the product.”
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