Most marketing executives have been trained in "Mass Marketing"; "Class Marketing" has only recently been added to higher educational curriculum. Lorre White is one of the first to specialize in this area of niche marketing. www.WhiteLightConsulting.net
No doubt like its readers, Condé Nast is reeling. Media columnists have been going to town detailing the daily layoffs at various titles with hints of more to come. Below is an excerpt from an Advertising Age article I found of interest:
"Why didn't Condé try harder to save Gourmet, perhaps by changing its business model? Maybe it could have hiked the subscription price -- each issue only brought Condé revenue of $1.18, the circulation expert Jack Hanrahan pointed out -- and reduced circulation to become more like Cook's Illustrated, which doesn't accept advertising. That would have gotten around the conflict with Condé sibling Bon Appétit, something the company cited in closing Gourmet.
Other publishers have reaped millions of dollars through licensing their brands, but Mr. Newhouse wants his employees focused on keeping the magazines great. Higher subscription rates might improve circulation profitability, alternately, but Condé prefers to attract advertisers with big subscriber bases paying not very much.
"It'd be one thing if they killed 10 magazines and said, 'We have this amazing vision for the future and we're putting this money behind this," the former publisher added. "But you get the sense that this money goes toward shoring up some of the others."
The company's circulation strategy is common around the industry. But the challenges have spurred some titles to try raising subscription prices in a bid for better circulation returns and a more-defined audience. Condé doesn't seem to be considering that route.
"I'm kind of surprised that they're not talking at all about increasing subscription prices," said an executive at a major marketer that frequently works with Condé. "They're a company talking about luxury, but they're out there giving their subscriptions away, and their revenue model doesn't work any more. You can't ask advertisers to cover the costs. That's why they missed out on the increased spending this year from packaged foods who aren't willing to pay the premium to be in that environment."