Magazines' longtime marketing partnership with liquor is looking shakier. Because of the broadcast networks' decades-old voluntary ban on liquor advertising, magazines had largely cornered the market on liquor ad dollars, controlling $224.6 million -- 73% of total ad spending by the industry -- in the first 10 months of 2001, according to Taylor Nelson Sofres' CMR.
But with the confirmation by General Electric Co.'s NBC late last year that it would accept liquor advertising in prime time, some magazine publishers fear their level of liquor ad spending may be threatened.
"We're obviously very concerned," says Jamie Hooper, publisher of Dennis Publishing's Stuff, which counts liquor as a key category, as do such magazines as sibling Dennis title Maxim; Time Inc.'s Entertainment Weekly, People and Sports Illustrated; and Playboy Enterprises' Playboy.
While network TV has historically banned liquor advertising, some cable networks, syndicated programs and local stations began accepting liquor spots in the mid-1990s. In 1995, liquor spending on TV was a paltry $469,500, according to CMR, but in the first 10 months of 2001, liquor spending on TV surged to $18.1 million. Between 1995 and the first 10 months of 2001, TV's portion of liquor industry ad budgets jumped from infinitesimal to 6%, while magazines' share declined to 73% from 82%.
Brown-Forman Corp., whose brands include Jack Daniel's Tennessee whiskey, has been in discussions with NBC, says Rick Bubenhofer, public relations director. "This allows us to compete with beer and wine on equal footing," he says. Jack Daniel's has already run on cable and broadcast stations spots created by Havas Advertising's Arnold Worldwide, St. Louis.
Marketing via network TV poses several hurdles, however. NBC published a list of 19 restrictions it will place on liquor ads. For instance, the advertiser must "devote a minimum of four months of 100% paid, branded social-responsibility messages prior to commencing product advertising."
Diageo's Guinness-UDV North America began running such ads for Smirnoff vodka on Dec. 15, though not in prime time.
The other broadcast networks haven't said they will accept liquor ads. "We didn't accept them before NBC's announcement," says Dana McClintock, VP-communications at Viacom's CBS. "We didn't accept them after NBC's announcement. And we don't accept them today."
Like CBS, Walt Disney Co.'s ABC and News Corp.'s Fox also have said they have no plans to take liquor ads.
Some observers say there may be a backlash against NBC for accepting liquor ads. The Center for Science in the Public Interest has decried the network's decision. So have Federal Communications Commissioner Michael Copps and U.S. Rep. Ed Markey, D-Mass., among others. Congressional hearings on the matter "are likely," says Rep. Frank Wolf, R-Va.
For their part, magazine publishers say they haven't heard of print budgets being cut yet. Publishers contend they're confident that liquor advertisers will continue to see the value of magazines, arguing that magazines' brands, value, niche audiences and potential for face-to-face marketing will help keep distiller ad dollars in the fold.
Others in the publishing community seem to acknowledge that losing some liquor ad dollars to TV is a foregone conclusion, and now are looking ahead to how the two media can coexist and prosper as ad outlets for liquor marketers. Citing a recent study by the Magazine Publishers of America, Ellen Oppenheim, MPA executive vice president and chief marketing officer, says: "Magazines as a medium actually improve the efficiency of television."