Introduction

Over the next 20 slides or so we are going to update you on the year on year changes

for the fragrance industry in relation to the key marketing platforms of offline print.

We will take at look at the fragrance industry’s press marketing and the important year

on year changes.

Next slide: Print Media

1

Overall the industry had a successful 2011, so before we dive straight in and look at the key Christmas period, let’s just take a top down look at the success that was 2011. Next slide: 2011 Beauty advertising

2

Across every single beauty category in total for last year, ad spend was

up….in fact….fragrance represented the single greatest increase in ad

spend of any beauty category at……..

Next slide: 18%

3

….. 18%.....and at rate card that increase was worth ….

Next slide: £11 million

4

…..£11 million pounds, which has for yet another year kept fragrance ahead

of the closely competitive cosmetics brands, highlighted as a threat to your

share at the last Fragrance Foundation Breakfast, and now less so.

What’s the editorial picture?

Next slide: 2011 Fragrance editorial

5

Well when we look at editorial column centimetres, every category, every

category is down except for fragrance.

Looking at the statistics we have dating back to 2006, the last time the market

saw falls such as these in editorial coverage combined with increases in

advertising, the following year, editorial increased again, and because

fragrance is the only sector with year on year steady increases, the

indications are that sustaining the momentum with your advertising and PR

campaigns will produce the ROI

Next slide: Fragrance performance

6

Let’s just summarise those findings:

Editorial was up by 6% down by half versus 2009, but still the only beauty

market increase.

Ad spend was up by 19%.

And sales, and thank you to The NPD Group for this figure, were up by 11%.

And sales is what it’s all about and Christmas is the peak sales period so here

is the Christmas picture:

Next slide: 2011 Christmas

7

Fragrance editorial for December dated publications was up by a very nice

16%.

Display advertising was up by 8% which is a reversal of the year ad to PR mix

so clearly PR was a strong seasonal driver.

Christmas sales were up by 14%.

That was December and this is how the year looked…..

Next slide: 2011 v 2010 the trend

8

The red line is 2011 and 2010 is in blue.

Apart from the overall increases the most obvious variance is in this period

here.

In fact when we look back, July / August is typically down so the 2011

performance is normal, and the reason why 2010 was up is because 3

Celebrity fragrances were strong in the period making up 25% of all coverage.

Here in April the increase is 51% up on 2010 and this was driven by

just 34% of publications mostly with Fragrance Features, but in particular

‘Face Of’ and ‘Celebrity’ brand PR was up 140%, but this is not a trend and

the overall market shifts we look at later are a better indicator for 2012

Next slide: Data Dive

9

At about this point I often take a moment to tell you how we do what we do,

but this year it’s a bit different because we wanted to lift the lid slightly on how

we put these presentations together.

This is a screen dump, don’t adjust your sets, of just a small part of

the data behind that last graph.

Mike Yeoman our Client Service Director runs pivot tables in a number of

in-house workshop sessions to get to a point where he can run formulas to

identify the increases and deceases .

Where did they come from, what was driving them and so on?...

..all this is very useful data when comparing performance across a period of

time and may need to know what else was going on in the market for instance,

which publications were those products were in; were they running any

advertising, and it is this sort of thought process we went through when

working towards today looking for shifts and trends.

Next slide: Fragrance market shifts (1)

10

Here we are looking at the 4 fragrance types – Fashion, Luxury, Celebrity and

Mass.

Fashion-fragrance is the dominate force with a 51% share of all the

fragrance editorial pages reflected by the advertising with a significant 78%

share of all fragrance ad spend and both these numbers are UP on 2010.

The turnaround is Celebrity fragrance which has fallen back close to its 2009

levels for editorial and ad spend has in fact fallen below the 2009 value.

Next slide: Fragrance market shifts (2)

11

When it comes to Luxury v Mass you will notice that Mass is flat lining and

takes very little share whilst Luxury has shown good growth.

In summary all the indicators are that 2012 will be a good year for the Fashion

and Luxury brands and there is (some may say phew!) a move away from

Celebrity. So fragrance is up and the trend should continue this year… so who

is dominating the market and which publishers and publications are delivering

the best return?

Next slide: New products

12

……over 900 fragrance products appeared in the press for the first time last

year and …….

Next slide: New products (2)

13

……that made up 54% of all the fragrance products that appeared in the press.

So who were the key players overall and not just with NPD?

Next slide: Market dominance

14

…….the same top 10 fragrance companies that make up 90%

of the ad spend also make up 75% of the editorial pages and that is a

very powerful force for the press to work with so let’s look at publications and

start with the major publishing groups.

Next Slide: Publishers & Fragrance 2011

15

We’ve taken 5 publishers and looked at the changes in fragrance press

marketing across those publishers’ titles.

Editorial / PR is on the left, and is based on pages/Weight and advertising is on

the right, based on rate card spend.

Hearst is the stand out story with the largest editorial decrease of minus 21%.

In fact 45%, nearly half of all the fragrance brands with PR in a Hearst title had

a year on year reduction in editorial credits, and when it comes to the key

market drivers, the Fashion House fragrance brands, just 4 out of 17 Hearst

titles increased their pages at all, so it appears to be a general shift in the

publisher’s focus which you may want to keep an eye on.

CLICK now for next slide: Publishers & Fragrance 2011 (2)

16

Conversely IPC have put more column centimeters behind fragrances with a

7% ad uplift. News International’s ad revenues increased by the biggest

margins and Conde Nast continues to disappoint overall in terms of the ROI.

I want to stress here that this a top down view and some brands and titles have

done well and some brands and titles less well than others, and that we are not

here to ‘out’ any publishing groups we are only presenting publicly available

findings, because after all it is crucial to work in partnership with the editors

and publication stakeholders.

The big discussion, and we hear this all the time, is how much does ad spend

influence PR and so let’s look at some efficiency ratios to see if there is an

answer.

CLICK now for next slide: Bangs for bucks

17

Fragrance and Cosmetics are neck and neck in terms of ad spend and

Fragrance has increased editorial by 6% to Cosmetics' 4% decrease, which is

good news.

Jasmine does a great job of course, but despite that, Cosmetics has……..

Next slide: Bangs for bucks (2) 169%

18

…..169% more editorial than Fragrance, and whilst Fragrance had some 900

new launches, Cosmetics had three thousand 900.

Quite simply Cosmetics offers more to write about, hence my knowledge of

mascaras, so when we looked at the efficiency ratios for the market, that is for

every pound I spend on advertising how much do I get in PR? ….

The ratios Fragrance versus Cosmetics are correctly aligned even though

there is a considerable variance in that …..

Next slide: Bangs for bucks (2)

19

…..for every £6.45 spent on Fragrance advertising you get £1.00’s worth of PR

and for Cosmetics it’s £2.45 which is a difference of…….

Next slide: Bangs for bucks (3)

20

164%.... which seems about right when you consider that 169% difference in

volume.

So the point of this comparison is to demonstrate that the playing field is sort of

level and our next step was to look at which publications offered the best return

in 2011…….

Next slide: Fragrance ROI

21

Please note:

These ratios are based on the press marketing of just those top 10 companies

referred to back earlier, and these results are just for consumer press.

Putting that into the equation, the fragrance average goes up from £6:45 to

£10 pounds and two pence.

That £6:45 figure was for the total fragrance market incorporating some 630

brands, also in the consumer press….and what you will have already noted is

that these publications performed better than the £10:00 average.

Most importantly let’s not forget that Fragrance is the only category continuing

to increase editorial overall.

Of course some titles will perform better for some brands, and your target

audience, and the publications’ demographic and profile is a key consideration

in media planning, and …….

Next slide: Media planning

22

……So is there an opportunity?

Well the opportunity is that print offers fragrance a stable platform,

it’s not shifting about (I know that graphic doesn’t represent a stable platform ,

but you have to admit it’s a great picture!)

For example the monthlies have increased their amount of fragrance editorial,

but by just 4%, pretty much in line with your market increases and they

represent 40% of all fragrance editorial with little year on year change.

The changes across the weeklies and national are similarly stable.

So with ad spend & PR both up and likely to continue now is the right time to

fine tune those budgets and……..

Next slide: Soapbox

23

……we have said this before and some brands are doing it with great

effect….but look at ways to increment your PR activity with just a small % slice

of your advertising budget and improve those ratios…….and………

Next slide: Finally

24

….continue the success of 2011 into 2012

Next slide: END

25

THE END

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