If You Thought The Wall Street Journal’s Opening Of A Global Fashion Bureau Is All About Journalism You’d Be Very Wrong. It’s All About Getting More Fashion/Luxury Advertising

Philip Stone September 10, 2006

If there is one newspaper that looks like it is attacking in exactly the right way the industry’s slumping newspaper circulation/advertising numbers then it has to be the Wall Street Journal.

While most newspapers appear to have put all of their future hopes on surviving well enough via savage cost-cutting until increased Internet revenues can make up for print’s slump, the WSJ has actually put its thinking cap on to solve the problem from a very necessary additional direction – new ways to attract new advertisers.

Last year its US edition launched a Saturday product based on a business plan that its normal weekday readership would also take the time to read the newspaper with a more featurish weekend lifestyle feel to it delivered at home on Saturday. The idea was that the fashion/luxury trade would relish those demographics looking at their ads in the comfort of their homes, rather than in a few rushed moments at the office, and who might rush out Saturday afternoon and buy.

The spin from the Journal is that the Saturday edition is a great success from the readership point of view – people are taking the time to read it in the comfort of their homes. But there seems to be some question about its financial success – the luxury trade advertising is certainly there, but how much of it has just transferred from during the week to just the Saturday edition, and how much of it is new spend? The Journal has not been very forthcoming yet on that angle.

But there seems to be little doubt that Journal executives do believe they are on to a good thing with fashion/luxury – it is a different advertiser to the usual categories that have been in decline over the years. The Journal can no longer rely on the declining tombstone announcements that used to be its bread and butter  (such and such a bank was happy to assist such and such a company buyout such and such company, etc.). The newspaper knows it needs to make up that lost revenue elsewhere, and just relying on plain cost cutting (reducing the width size of the newspaper as the Journal is going to do, etc.,) won’t do it.

What the Journal needs, and this is difficult given how it is considered to be a financial newspaper, is attracting a different breed of advertiser – not companies advertising or bragging to other companies, but rather companies advertising to the rich people reading their message that they, personally, should spend their money on expensive goods and services. 

Not that the Journal is original with that tact. The UK’s Financial Times for several years has produced a glossy Saturday magazine called “How To Spend It”, filled to the brim with luxury goods advertising. If it could work in the UK then why not elsewhere? Indeed, if copying is the sincerest form of flattery, than then FT’s archrival, the Wall Street Journal Europe gave that compliment when it launched last year a quarterly luxury magazine called Style Journal. Its next edition is due this coming Friday.

Having seen the lure of the luxury trade to the US Saturday edition and the quarterly European magazine, Journal executives have now decided to try and cash in on fashion/luxury big-time. The newspaper has announced the opening of a fashion bureau in New York that will co-ordinate all global reporting on fashion, retail and luxury goods for the US, European and Asian and online editions of the Journal.

The Journal is being rather clever about all of this, making a lot of buzz in fashion circles for very little additional cost. The Journal chose not to spend big bucks hiring a big fashion-name editor with a reputation like a Suzy Menkes, but instead decided to promote from within, naming Lisa Brannon, previously deputy bureau chief of the Journal’s media and marketing section to head its coverage of the $200 billion fashion industry. Her biography shows she has basically been a business reporter for most of her career, although she did have a stint with Fairchild, but that appears to have been on business reporting side rather than fashion reporting.

And it’s not that the Journal is hiring scores of new fashion writers, in fact it looks like they are not adding staff at all. They’ll now have Ms. Brannon coordinating the fashion coverage from the five fashion reporters already in New York who now work for different sections but now will come under one fashion umbrella, plus she will collaborate with current Journal reporters in Paris, London, Tokyo and Los Angeles (Milan seems strangely left out of that list).

But from reading the Journal’s news release it is obvious the reason for all this is not just better fashion coverage, but it is an inducement for the fashion/luxury industry to spend more advertising in the newspaper. Even the sub-head on its announcement sets the stage, “Additional ‘Business of Life’ coverage will create new advertising opportunities for luxury retailers.”

In the release there are comments from the Journal’s publisher and from the newspaper’s managing editor about how important fashion coverage is, and how this is an improvement to the Journal’s editorial product, but then comes the real “meat and potatoes”:

“Advertisers will have the opportunity to influence readers when they are most receptive to making both personal and business fashion choices,” said Judy Barry, senior VP, sales and marketing. “This gives advertisers a chance to embrace the Journal’s diverse content in a unique mix of both business and consumer content six days a week.”

Note that six days a week comment. That may be the clearest clue so far that while Saturday’s Journal is a success in drawing the luxury trade spend, some of that money may merely be a shift from what had been spent Monday – Friday, and the Journal is trying to get that back, too, via increased fashion coverage during the week.

All of this does raise a couple of editorial questions. If the fashion industry doesn’t bite after a respectable amount of time and increase its spend big time will the Journal continue with its increased fashion coverage of an industry that  “is an increasingly important topic for the Journal,” as Managing Editor Paul Steiger put it. In other words, how much of this extended coverage is for real editorial needs and how much is it for drawing in advertising?

And then you get to that real tricky editorial problem of do you bite the hand that feeds you? The Journal is a newspaper; it is a not a glossy fluff fashion magazine. From the Journal you expect hard-hitting stories about the fashion/luxury industry; yes, even stories that criticize the industry in general and companies in particular.

But the fashion industry supremos, perhaps even more than others, do not take kindly to hard-hitting negative stories about their industry. Just how far is the Journal going to go? No doubt Journal editors beating hand over heart will swear their editorial coverage will be completely decided on merits and not whether an advertiser may be offended by, for instance, being told in print that his Fall collection sucks. But will a Journal story ever say that?  Dealing with fashion/luxury goods people gets very sensitive at times, are there any lines in the sand for the Journal’s writers? When it was just an editorial issue, no problem; but now editorial has been tasked to target an industry in order to bring in badly needed new revenue to the newspaper. That’s different.

One only has to think back to last year when General Motors, a company that one would think has a huge thick coat of armor, withdrew advertising from the Los Angeles Times for a few months because it didn’t like the newspaper’s editorial criticism on GM. At the end of the day GM returned, The Times said it did not cave in to any editorial pressure, and, oh yes, the Times lost some $10 million worth of advertising from that fiasco. Perhaps readers in LA would care to advise how they see the Times’ editorial coverage of GM today.

None of this is to denigrate what the Journal is doing. It merely points out that for a very little cost a newspaper can develop new revenue streams that can be extremely cost effective, and the Journal seems to be leading the pack in developing such revenue streams.

It has already launched advertising on its front page that should be worth some $20 million a year, and if the fashion industry does bite more at the Journal’s demographics, given that high-powered women will have more reason to look at the newspaper because of more stories that should interest them, then why not?

Meanwhile  back in the UK there is talk that the Financial Times is ready to launch a new idea to get in extra revenue. According to The Guardian the FT is considering printing news releases for a fee on a page devoted just to such announcements.

Newspapers simply don’t have the space to print all the news releases they get every day, and so choice is usually made by how big a company is. And that means the smaller companies get little play. But by putting aside a page for just such small company announcements – similar to the tombstone announcements – then a company can get its message out. But should they have to pay for the privilege?

That, too, brings up all sorts of editorial questions for editors to beat their chests – for instance, don’t write about company A’s release even though it’s newsworthy because then they’ll pay to have it printed --  but it is an indication of how print executives are looking for new ways to increase print’s fortunes.

It is certainly a step in the right direction, far better than all of the cost cutting that not only has gone for the fat but has also sliced well into the bone no matter how much executives may claim it has not.

ftm Follow Up & Comments