Magazine article Folio: the Magazine for Magazine Management

Boating Titles Pursue Non-Endemic Ad Categories

Magazine article Folio: the Magazine for Magazine Management

Boating Titles Pursue Non-Endemic Ad Categories

Article excerpt

After years of vocal lobbying by Congress and the Bush and Clinton Administrations, boating manufacturers and magazine publishers finally succeeded in overturning the luxury tax, which they claim devastated the industry in tandem with the recession.

But magazine publishers don't view the repeal of the two-and-a-half-year-old tax--which levied a 10 percent surcharge on the portion of a purchase price exceeding $100,000 on private boats and yachts--as a panacea. The sluggish economy is keeping many advertisers on the dock, and much depends on this fall's major boat shows.

"If the cashflow starts cranking, ad pages in all likelihood will go up," says Chris Donahower, publisher of Cahners Publishing's Power and Motoryacht.

Publishers of the boating magazines are continuing to reorient their sales staffs toward more non-marine advertising, and to become more marketing-driven. All agree that rampant rate-card cutting, nearly unheard of in the boom years of the 1980s, must be curbed if pre-recession profitability levels are ever to be reached again.

The effect of the luxury tax-levied in January 1991 on boats, cars, furs, jewelry, watches and private airplanes--exacerbated the already palpable effects of the recession on the boating industry. While sales of boats not subject to the tax dropped 12.2 percent (from 495,400 to 435,000 units) in 1991, sales of boats valued at $ 1 00, 000 or more plummeted 52.7 percent (from 9, 100 to 4,300), according to the National Marine Manufacturers Association. Without the high profit margins the upper end provides for most manufacturers, companies slashed their advertising budgets.

"The luxury tax was totally devastating," says Kathy MacCausland, advertising and promotion manager for New Gretna, New Jersey-based Viking Yacht Company, whose sales all come from high-end model yachts. "Customers stopped buying, period."

In 1990, Viking registered about $100 million in sales. A year later, that sank to $35 million. This year, with the repeal, the company hopes to bring in $45 million in revenues.

As a result, Viking scuttled all advertising expenditures in August 1991; when the company resumed advertising a year later, the print budget was halved, from about $700,000 to $350,000. All the ads flowed to just two titles Viking considered core books: Hachette Filipacchi Magazines' Boating and Power and Motoryacht. "It was better to be consistent in two than stretched over six national books," says MacCausland, adding that since the repeal, Motor Boating & Sailing is back on the schedule. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.