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Title of the attached .pdf file: THE AD AGE 2004 SHELTER SPECIAL REPORT Home Improvement Publishing, Broadcasting and Marketing AdAgeSPECIALREPORT 4.5.04 SHELTER

GIMMEShelter ‘Cocooning’ comes naturally, but large number of factors trigger boom By DAN LIPPE

sept. 11 may have sent us into our cocoons for a feeling of se- curity, but it’s cold hard cash that’s feeding our fervor to keep them spruced up. A perfect storm of influences have converged to stimulate interest in shelter-related topics,and the print and TV media, as well as the advertisers that rely on them,are riding the wave. Fueling this are such economic factors as the availability of low-interest loans to fund home improvements.It also helps that as other investments have stumbled, housing prices have soared. In a survey that Lightspeed Research conducted for this Special Report, See COCOONING on Page S-8

Page turners TV won’t trade spaces Shelter Q&A Online buildout INSIDE Competition is fierce among Home shows take place on Genre godfather Bob Vila talks up Download the Shelter PDF, magazines PAGE S-2 prime time PAGE S-4 emerging trends PAGE S-5 use QWIKFIND AAP49R

PHOTOGRAPH BY NICK KOUDIS April 5, 2004 | Advertising Age |S-2 AdAgeSPECIALREPORT SHELTER Launches crowd already tough field From tony style books to near-catalog fare, titles SHELTER FROM THE STORM Shelter-themed titles mentioned in this article often were able to beat the overall magazine industry’s dismal 1% drop in ad pages for 2003 and seek to win home front 2.7% decline over the first two months of 2004. On the circulation side, several built their total paid numbers in the second half of 2003.

By KATE FITZGERALD AD PAGES % CHANGE VS. CIRCULATION (IN MILLIONS) % CHANGE VS. YEAR EARLIER YEAR EARLIER t’s no coincidence that three of the most eagerly awaited new titles in the shelter ARCHITECTURAL DIGEST (C) magazine category promise “simple” -1.2 -2.3 Idecorating and design ideas, given the -1.7 runaway success of Time Inc.’s Real Simple +0.5 -5.3 and its appeal to upscale women. Coming next September is Time Inc.’s Cottage Living, whose tagline promises BETTER HOMES & GARDENS (M) “comfort, simplicity and style.” American NC Media will also enter the fray in 2004 with +10.8 +0.4 Happy Home, targeting “younger, upwardly -2.5 mobile women looking for simpler ways of -9.0 creating great personal style in their homes,” says Sara Ruffin Costello, editor in chief of the COUNTRY HOME (M) magazine. A catalog-like home décor magazine from +11.3 +12.9 +19.7 Conde Nast Publications, due next year, is +7.9 expected to simplify buyers’ choices by doing -16.1 for recliners and ceiling fans what Conde Nast’s Lucky does for shoes and handbags. But translating the hip, simpler-rules ethic COUNTRY LIVING (H) into new ad pages and strong readership may +4.9 -1.1 be harder than it looks, say magazine industry +2.0 insiders assessing the brutally competitive +12.1 -13.2 shelter field. In an overall “Home” category of magazines defined by Advertising Age’s DataCenter and based on Publishers HOUSE BEAUTIFUL (H) Information Bureau numbers, 2003 ad pages -2.2 slipped 1.4% to 14,699.1. -9.5 “We’re going to see some of the +3.9 NC established titles in [the shelter] category -15.6 forced to lower their rate bases this year with new titles entering the picture and making HOUSE & GARDEN (C) things more crowded,” warns George Janson, +5.4 managing partner-director of print for WPP -13.6 Group’s MediaEdge:cia, New York. +7.6 “Eventually, we could see some shakeouts.” -43.6 -16.1

MIXED RESULTS Results for 2003 were wildly mixed for METROPOLITAN HOME (HF) individual titles in the shelter arena, +16.9 -1.5 underscoring the category’s volatility. It could -0.6 +4.2 be a make-or-break year for weaker, more -5.7 poorly defined players, say media analysts. “To succeed from now on, shelter magazines must be very distinct and certain in TRADITIONAL HOME (M) their focus and positioning,” says Brenda +10.2 +18.8 White, media director at Publicis Groupe’s +20.5 Starcom Worldwide, Chicago. NA -20.3 However, the shelter niche overall includes a wide array of magazines, ranging for the super-upscale Architectural Digest to Parent publishers: C=Conde Nast Publications H=Hearst Magazines HF=Hachette Filipacchi Media U.S. M=Meredith Corp. the much more mass-appeal Better Homes & Sources: Ad page numbers from Publishers Information Bureau; circulation numbers from Audit Bureau of Circulations. NC=No change; difference in circulation over two periods was too minimal to include a percentage change in this chart. Gardens. Buoying the shelter rivals is the fact that Corp., hopes to carve out a new fan base for a more affluent and younger female reader style, and our success has been built around housing trends are strong, interest rates remain Cottage Living, centered on “simple, than either of those titles, which outperfomed being very broad within the country theme,” low and a fresh wave of refinancings occurred in comfortable design themes,” says Stephen the magazine industry overall last year by says Steven Grune, publisher of the 1.7 the first quarter of 2004. There’s a lot of money Bohlinger, VP-publisher of the new venture. posting ad page increases (see chart above). million rate-base Country Living. at stake for publishers that can nail consumers’ Undeniably building on turf currently “I take Cottage Living’s tagline as a direct Meredith’s Country Home, which boasted decorating and rehab spending through occupied by Hearst Magazines’ Country hit, since our theme of the last two years has one of the category’s fattest ad page gains at precisely targeted magazines, Ms. White says. Living and Meredith Corp.’s Country Home, been ‘Come home to comfort,’ but from their 11.3% last year, isn’t waiting idly for Cottage Time Inc., through its Southern Progress Mr. Bohlinger says Cottage Living will target title I envision a more narrow decorating See MAGAZINES on Page S-6 April 5, 2004 | Advertising Age |S-4 AdAgeSPECIALREPORT SHELTER Marketers feel at home in shelter TV ABC’s introduction of “Extreme Advertisers get comfy Makeover: Home Edition” serves as the broadcast seal of approval on the shelter with a wide array of genre. The March 7 airing was the second highest-rated show for the first week of shelter-oriented TV fare March on the Walt Disney Co.-owned network, and drew 10.2 million viewers, By DAISY WHITNEY delivering a 3.9 rating and 10 share in adults 18-49, according to Nielsen Media Research quick scroll through the TV data provided by ABC. lineup reveals that programs about the “Extreme Makeover: Home Edition” is a home are building fast. cross between a reality program and a home A Not only are there whole networks improvement show, says Geri Wong, senior serving this niche, but in February a shelter- VP for prime-time TV at ABC. The program themed show premiered for the first time on revamps homes for “deserving families” such national broadcast prime-time TV with as the debut episode in November centering on ABC’s “Extreme Makeover: Home Edition.” a couple whose young daughter battled cancer. On cable, Discovery Communications’ Sears, Roebuck & Co. is the exclusive home- Discovery Home & Leisure network was improvement advertiser for “Extreme slated last month to reacquaint itself with Makeover: Home Edition,” and its Craftsman viewers as Discovery Home Channel. And if tools are featured prominently during the definition of “shelter” is expanded beyond renovations. A new kitchen or laundry might the structure itself, Scripps Networks also include Sears’ Kenmore appliances, says approaches it from several paths with DIY-Do KNOCK, KNOCK: “Extreme Makeover” hits home at ABC. John Caruso, senior VP-TV network sales at It Yourself Network, Home & Garden ABC. The show gives Sears visibility and recall Television, Fine Living and . far beyond what a 30-second spot might provide. DIY alone now reaches 26.6 million month kicked off the fourth season of Sears is partnering with both ABC for households. And pushing ahead into its niche, “,” and this latter-day “This “Extreme Makeover: Home Edition” and Scripps in the next six months plans to Old House” has spurred additional shelter TV with Discovery Home Channel as the sponsor introduce about 70 new series and specials shows. With Paige Davis in Mr. Vila’s role as for one of its theme nights. across its four lifestyle brands. foreman, and homeowners toiling over two- Shelter TV programming can be day, $1,000 remodelings of neighbors’ ‘A CATEGORY WE SHOULD OWN’ particularly appealing to advertisers in the houses, the results of “Trading Spaces” “It’s a category we can and should own,” says home category since it affords them a chance projects are sometimes outrageous. But the Ted McDougal, a spokesman for Sears. to more closely align thematically with show generated siblings “While You Were Because the Sears deal with ABC is wide- content that matches their brands. Also, Out,” “Trading Spaces: Family,” “Trading ranging and expands beyond traditional many shelter shows are natural fits for arrived in a timely fashion to herald a boom in Spaces: Boys vs. Girls” and “Trading Spaces: product placement to encompass the whole product integration. Home Depot, for home sales and remodeling. Home Free,” plus a fan base. show and the Sears and ABC Web sites as instance, is the exclusive category sponsor for The shelter programming niche was born a Shelter TV was in full boom, generating well, it furthers Sears’ goal to portray itself as TLC’s “Trading Spaces” and provides quarter-century ago when “This Old House” other cable fare like Discovery Channel’s the ultimate home solutions provider, Mr. products and materials for projects. with Bob Vila debuted on the Public “Monster House” (offspring of the auto- McDougal says. Broadcasting Service. More recently, the how- themed “Monster Garage”) and “MTV Cribs” The broader entertainment appeal of ENVIRONMENT THAT MAKES SENSE to home-improvement genre starting mating on the youth-oriented network owned by “Extreme Makeover: Home Edition” has also Advertisers want their brands to be in an with the reality craze to create a new hybrid— Viacom. “Changing Rooms” is also in the fray lured automotive, package-goods and environment that makes sense, says Tim the fix-up contests dotting the dial, sort of via BBC America, along with “House Invaders.” personal-care advertisers. Spengler, exec VP-director of national broadcast “Survivor” meets “This Old House.” They’ve Mr. Vila left PBS in 1989 and Viacom- Shelter shows usually come without the for Interpublic Group of Cos.’ Initiative Media, broadened the shelter genre beyond its do-it- owned syndicator salacious undertones or “ick” factor of some New York. “There is more of a focus on the yourself roots. debuted “Bob Vila’s Home Again” (see Q&A other reality fare. The non-controversial and home than there was 10 years ago,” he notes. Like so many other Anglo-American with Mr. Vila on opposite page). Also in targeted nature of home content is part of its The programming swell is caused by transplants, the U.K.’s “Changing Rooms” syndication, Tribune Entertainment offers appeal to marketers, says David Karp, senior several factors. The cocooning trend wrought inspired a U.S. iteration in “Trading Spaces.” “Famous Homes & Hideaways” and “Ron VP-general manager for Discovery Home by 9/11 still lingers, and low interest rates Discovery Communications’ TLC last Hazelton’s House Calls.” Channel, which planned to introduce its new

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name and logo on March 29. With the new name comes a more defined and precise focus ADVERTISING AGE: You pretty much My favorite part of it all is when you look at on the home through programming theme started the genre of shelter TV with “This Old the technology of housing in the last decade … nights and a dumping of broader lifestyle Q & A WITH House.” Twenty-five years later, there’s a wide these are things that need to be reported on topics like travel shows. variety of home-themed TV shows . Why have and used. But now we’re entering a point As part of the facelift, the network BOB VILA such shows become so popular? where you have placement as a profit center. It intended to tag each weeknight with a theme IT ALL BEGAN MR. VILA: There’s an endless curiosity and turns into kind of a murky area of whether and sponsor, such as Procter & Gamble Co. with a deteriorating 1860 backing Monday’s “Easy Living” and Home Victorian, and more than 40 projects later, Bob concern with housing—you know, food, sex, something’s going to appear because it’s Depot sponsoring Friday’s “Quick Fix” night. Vila is marking 25 years rehabbing houses as housing. The fact is that people care passionately worth reporting on it or because somebody millions of armchair remodelers look on. about their surroundings, how they work, what paid to put it on your show. PUSH BY SCRIPPS He first appeared on national TV when “This they look like and whether they keep them warm. If you’re reporting, you can still put a brand E.W. Scripps Co.’s Scripps Networks has Old House” debuted on the Public Broadcasting And then other bright people with bright on there and give an impartial judgment of it. Yet planted its flagpole firmly in the broader Service in 1979. He left PBS a decade later and ideas have discovered how to take that concern the advertising value of the adjacency to the Bob lifestyle niche that includes shelter shows. went into syndicated TV with “Bob Vila’s Home and turn it into more than just a learning Vila name is something I have to be very Scripps claims that according to data it Again.” Viacom’s King World Productions experience but an entertaining experience by guarded about. collected during the week of March 12, syndicates the show to more than 200 TV kind of grafting on elements of soap opera and [With “Bob Vila’s Home Again”] you will find shelter-related fare—including design, stations. He’s also been spokesman quiz shows. I’m not sure how I feel about that, there exists a relationship beyond the TV show decorating, do-it-yourself and lifestyle for Sears, Roebuck & Co.’s but they’re watching [these shows], aren’t they? with some of these brands on the [bobvila.com] shows—totaled 881 hours, 581 of Craftsman tools for 15 years. Every year when you’re cobbling together Web site. However, it’s become kind of perfectly which were Scripps programs. Mr. Vila, 57, estimates ideas for next season’s programming, you’re acceptable for television companies producing HGTV’s “House Hunters,” there are some 30 shelter- saying to yourself, “Should I change my course? shows to charge people for placement. I’m in a focusing on prospective home related shows on TV today. He What can I do to kind of compete with these buyers, is the network’s highest- talked to Advertising Age’s other shows?” And so far I just have not “We’re entering a rated show, generating a 1.5 rating Dan Lippe about the explosive addressed that. I just basically keep on doing for households each Thursday. growth of shelter TV, which at what I’ve always been doing, which is building point where you HGTV and Food Network have this point ranges from complex and remodeling. attracted advertisers in financial renovations—Mr. Vila’s AA: What consistent thread runs through all have placement services and travel, in addition to specialty—to having neighbors the shelter shows? marketers endemic to their genres. remodel a room a la TLC’s “ MR. VILA: It’s mostly a concern for as a profit center” Retailer Steinmart advertised on Trading Spaces.” entertaining and getting ratings. And there’s Scripps networks for the first time nothing wrong with that. And what’s right about quandary because I have a certain amount of late last year, says Jon it is that it continues to inspire people to look at integrity to protect in terms of being an Steinlauf, Scripps senior their surroundings in a different way regardless impartial, unbiased expert on XYZ components VP-ad sales. of which show we’re talking about. All of them of housing construction. Advertisers continue to inspire people to want to improve I’ve got 25 years of being somebody my peddling products for their surroundings, to want to better the curb viewers can depend on to give them a straight the home probably appeal of their house as well as the general story about something, and if I took that fare best on specialty appeal and function of their interiors. approach with anything, then I’d be giving shelter networks, says AA: Integrated product placement seems to something up that I don’t want to give up. Jim Donohue, VP- be a natural fit for shelter TV. As a person whose AA: What’s hot in home amenities? associate media name has become synonymous with this genre, MR. VILA: There is no doubt that people are director at Publicis how do you approach that ad tactic? [Editor’s more and more interested in expansive spaces Groupe’s MediaVest, note: The issue of product endorsements that combine the kitchen with the living room New York. They helped set Mr. Vila on his current path. Ad Age functions. There isn’t a builder/developer worth should choose a few reported in 1989 he and PBS parted after his salt who wouldn’t tell you that’s one of the properties, create a several “This Old House” sponsors, including key things I have to put into my offerings, from regular presence with Home Depot, dropped out because of Mr. Vila’s California back to the East Coast. multiple spots, include outside endorsement deals.] I’m hoping we’re getting away from the billboard identification at VILA: Sees MR. VILA: I’ve always felt very strongly that supercompetitive need to have the McMansion the show’s start or end and McMansion craze it was bad karma to tell a carpenter what tools to with the three-car garage, all this insanity. I think incorporate product haunting use. ... In the years that I’ve been producing my it’s going to come back to haunt a lot of people 10 placement appropriately, he owners in own show, I’ve really looked at it from a years out. And God knows when the point comes says. future. “Lifestyle programming is journalistic perspective. [Mr. Vila holds degrees in that the yuppies who have bought such a now a medium of choice for journalism and architecture.] The approach I’ve McMansion in the 1990s are becoming empty advertisers that once perceived always taken, whether it’s a window or a brand of nesters ... I’m not sure how many people are it niche-focused,” says Mr. carpet, is is there a reason why it’s interesting going to be standing in line to be the second Steinlauf. I enough to have it on the show and talk about it. owners of such houses. I

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million-circulation books, behind on shelter magazines with that [O, the Oprah Magazine] and Real strategy, Ms. White says. Magazines Simple, and we’re on a pace to Meredith’s Better Homes & From Page S-2 continue our momentum this Gardens is the clear winner in that Living to open its doors. In June, the year,” says Publisher David Kahn. combination game, ending 2003 with 1.5 million rate-base magazine will Increasingly, other publishing 2,117 ad pages, a record for the title. unveil a larger, more square-shaped sectors are pursuing the advertisers But other publishers are catching trim size with a more expensive endemic to shelter magazines, say on to the lifestyle-plus-décor trick, matte-finish paper, visually aligning media buyers. Clearly, a mixture of including Hearst. The publisher of it with more upscale shelter titles. lifestyle and women’s service Oprah Winfrey’s O will bring out “Country Home is editorial with decorating-and-rehab two newsstand-only Oprah- NEW TITLES: From one of the fastest themes works, and more general branded special home-decorating Time Inc. (l.) and Taunton Press. growing over-1- magazines are “putting pressure” issues this year. The first issue of O at Home is due May 11 and the second during the fourth quarter. Among pure shelter books, experience . independence . discipline 401(k) ROLLOVER there’s proof that sticking with a formula works. Ad pages at Meredith’s 939,000-circulation Traditional Home grew almost 19% in 2003, with huge growth from automotive advertisers, says Publisher Brenda Saget Darling. New advertisers this year include GapKids and Frangelica liquor. What makes the Similarly, Hachette Filipacchi Media U.S.’ Metropolitan Home scored a 16.9% ad page increase last year, and in 2004 boosted its new T.Rowe Price frequency to eight issues from six.

SM REACHING A MIND-SET SmartChoice Rollover It was the “mind-set” of Metropolitan Home readers that lured Toyota Motor Sales USA to advertise Lexus’ RX 300 sport-utility smarter? vehicle in the magazine last year, says Ann Bybee, Lexus’ corporate manager for advertising, brand and product strategy. Metropolitan Home “was the right fit,” she says. A few smaller, tightly focused With the new T. Rowe Price SmartChoice Rollover IRA, you get the rollover you want, rising stars are gaining momentum in the shelter category, such as the and we do the work. modernist Dwell, launched on a We select the investments—with the T. Rowe Price SmartChoice Rollover IRA, you don’t have to go through shoestring in 2000 and now up to a rate base of 200,000. Another up- the complex task of choosing individual funds. We’ll provide a well-diversified portfolio for you with one and-comer is Taunton Press’ of our Retirement Funds. And we’ll adjust the fund over time to reflect your need for reduced investment Inspired House, launched last fall to risk—gradually making the investment more conservative as your retirement date approaches. target eclectic, upscale homeowners. The future is less certain for Proven performance—with our 67 years of proven performance, you’ll feel confident knowing that shelter magazines lacking a precise T. Rowe Price is the smart choice for your rollover. design focus, say magazine insiders. Examples include Conde Nast’s Low expenses—with no loads, sales charges, or commissions, and expense ratios for the Retirement House & Garden, whose ad pages Funds 40% below their category averages,* a T. Rowe Price Rollover IRA is the smarter choice. All funds slipped 13.6% last year, and are subject to market risk. Hearst’s House Beautiful, with ad pages down 9.5%. Request a prospectus, which contains complete information, or a briefer profile; each includes investment Hired in early 2003 to reverse the objectives, risks, fees, expenses, and other information that you should read and consider carefully slide at H&G, Publisher Lori Burgess before investing. says ad pages will be up “significantly” this year, with new advertisers To get started, just call. Our Rollover Specialists will handle the rest. If you want, we can even open your including Maytag Corp., Johnson & account right over the phone and handle most of the paperwork for you. Johnson’s Neutrogena and Ruth’s Chris Steak House, plus furniture and building supply advertisers. TROWEPRICE.COM/ROLLOVER “Our endemic advertisers 1-866-801-0219 including makers of high-end fabrics and furniture had a tough year in 2003. And overall, advertisers are spending money more broadly across more magazines and a long list of decorating-based cable TV shows,” says David Arnold, VP-publisher of House Beautiful. “We are sticking *As of 12/31/03, the Retirement Funds’ total expense ratios versus their individual investor Lipper category averages are 0.72%, 0.81%, 0.85%, and 0.85% for the Retirement 2010, 2020, 2030, and 2040 Funds, respectively, versus 1.53% for the flexible portfolio funds category; and 0.60% for the Retirement Income Fund versus 1.20% for the income funds category. T. Rowe Price Investment Services, Inc., Distributor. IRAR069070 with our formula of targeting a diverse mix of design ideas to upscale, over-40 women.” I April 5, 2004 | Advertising Age |S-7

Retailers work to brand home goods

casual approach,” says Ms. Morrison. “The Image is critical as chains Crate & Barrels of the world have driven this change … we’re not just eating sushi at home. seek edge, consumers We’re serving it on Asian plates.” In that context, brand identity can mean a eye fresh perspectives lot to a retailer. Each successful housewares brand has an image—Pier One Imports is By MERCEDES M. CARDONA ethnic, Williams-Sonoma’s Pottery Barn is modern and Euromarket Designs’ Crate & aturday afternoons, the Ikea store in Barrel is classic—and shoppers choose each PICTURE THIS: Lifestyle changes are a big part of the Ikea message as it draws consumers back for more. Hicksville, N.Y., is a madhouse. Entire store based on what look they’re going for, families barrel down the aisles says Jim Lucas, director-planning and research Smaneuvering carts laden with furniture at Interpublic Group of Cos.’ Draft, Chicago. and housewares, pondering how much work is “It’s more the age of the specialist,” he says. required to assemble a wardrobe, and impulse- Other retailers have also stepped up their buying decorative pillows and end tables. activity. Hardware chains such as Home Depot The Swedish furniture retailer has seen a have remade themselves into “home centers,” change in the consumer market since it arrived evolving from selling only products for in the U.S. in the late 1980s. Ten to 15 years “behind the wall”—plumbing, lumber, ago, consumers tended to buy furniture for a electrical supplies and the like—to adding more lifetime, but today “they’re more interested in merchandise for “in front of the wall,” such as finding something that fits with their lifestyle paint and decorative items, says Mr. Lucas. now,” says Rich D’Amico, new-business In the midst of this ferment, department development manager at Ikea North America. stores “had a run for their money, having to And that’s good news for home-oriented retool to compete,” says Ms. Morrison. retailers, which are in land-grab mode, Some retailers have created house brands scooping up consumers driven shelter-mad by to give them an advantage, such as Target low interest rates and a growing fascination Stores, which pioneered the democratization with home design. Hardware stores are chasing of design with housewares lines by architects women, home décor shops are attracting Michael Graves and Philippe Starck, and has BUILDING OUT: Home Depot is expanding from “behind the wall” products to an all-inclusive base for shoppers. metrosexualized men and everybody is trying continued with designer Todd Oldham. to win a growing multicultural market. Others are trying new store concepts dedicated to home improvement and décor, be cooling off, the demographics favor as part of efforts to reinvigorate the brand. SAVVY ACCESSORIZERS such as Sears, Roebuck & Co.’s The Great minority groups and women, Mr. Lucas says. “The U.S. has clearly become a multicultural “People have gotten into decorating their Indoors and Federated Department Stores’ He notes home ownership rates among single country, and we’re committed to meeting the homes and have become more savvy about Bloomingdale’s Furniture. women, African-Americans and Hispanics needs of all our customers,” Mr. Costello says. how they can accessorize,” says Julie Gardner, The makeup of the consumers has also continue to grow. Faced with all these changes, marketers are senior VP-marketing of Kohl’s Corp. The changed, with couples making more home- “If I’m a Lowe’s or a Home Depot, these increasingly using non-traditional media such retailer, while still mainly focused on apparel, improvement decisions jointly and women are the people I want to reach out to,” he says. as product placement to reach consumers. has recently reset its stores to improve its becoming more involved in projects. John Catalogs, store design and sponsorships are housewares and home displays. Costello, exec VP-marketing and MORE MULTICULTURAL now just as important as ad campaigns, say Consumers’ view of home décor has merchandising as well as chief marketing And they are. Ikea recently hired its first the experts. “The store plays a large role with changed from a once-in-a-lifetime project to an officer of Home Depot, notes that half the Hispanic agency and Lowe’s Cos. hired a trio these guys because a lot of what they sell is evolving fashion sense, driven by the specialist visitors to his stores are female and more than of agencies to handle multicultural experiential,” says Mr. Lucas. “They’ve stores, says Gwen Morrison, president-North 40% of store visits are made by couples advertising. Home Depot had done Spanish- ended up being lifestyle editors.” America at The Store, Chicago, a WPP Group shopping together. language ads for years, says Mr. Costello, and For the home décor stores, such as Pier One agency specializing in retail. The consumers are also increasingly it has placed bilingual signage and Spanish- and Crate & Barrel, that ability to create theme “Over the last decade, there’s been a more multicultural. Even as the nesting trend may speaking sales people at stores in key markets See RETAILERS on Page S-8

BEFORE YOU KNOW IT, TOOTTAALL MMAAYYHHEEM T breaks out in the M SSTTOORREE AAIISSLLEESS.. April 5, 2004 | Advertising Age |S-8 AdAgeSPECIALREPORT SHELTER

reinforce the brand. Experts point helped them reach those interested “You have the opportunity to out catalogs allow a retailer to consumers. get the right products in front of the Retailers present its brand in a leisurely “Home improvement shows consumers when they’re most Cocooning From Page S-7 fashion to a consumer relaxing at have become a substantial source of receptive,” Mr. Costello says. From Page S-1 displays has helped attract men, who home, not hurrying through a store. information and aspiration for “It’s a ‘That’s for me’ kind of only 29% of the respondents said are increasingly interested in Catalogs can be very effective consumers,” says Mr. Costello. thing,” Mr. D’Amico says. Ikea has that creating a secure environment entertaining at home, Ms. Morrison brand builders, Mr. Lucas says, Home Depot has sponsorship deals done product placement in movies, at home in response to increasing says, adding, “The stores have gotten noting, “It tells you what the brand with the two top-rated home such as the upcoming “Jersey Girl” terrorism was a very important fac- better about how to present a story. is about.” improvement shows, TLC’s from Miramax Films, and on TV tor in their decision to spend on … like Crate & Barrel saying, ‘It’s And, in a sort of chicken-and-egg “Trading Spaces” and “While You shows such as Bravo’s “Queer Eye home-related purchases. time for grilling.’ “ situation, home improvement TV Were Out.” Those deals include for the Straight Guy,” which However, 63% of the survey’s Catalogs have also become an shows have both created more extensive product placement, featured a shopping excursion to Ikea respondents, homeowners aged 18 important tool to introduce or demand for shelter retailers and advertising and in-store events. as part of a recent episode. I and older, cited the increasing value of their homes, especially compared with any other investments, as a rea- son to make such purchases. “After the bubble burst in ’99, a lot of people lost interest in risking their capital in the market and realized their safest investment seemed to be their real estate. That certainly has not changed,” says Bob Vila, who for 25 years has entranced TV viewers with his home renovations on “This Old House” and “Bob Vila’s Home Again.” The greater influence of home-as- investment vs. home-as-safe-haven seems especially remarkable given another survey WPP Group’s Lightspeed conducted for Advertising Age around the time of the one-year anniversary of the 9/11 terrorist attacks. Signaling how much the attacks continued to weigh on Americans’ outlook, 51% of respondents to that survey said they didn’t think marketers should run any ads on Sept. 11, 2002. But Steven Marks, national account director at Lightspeed, notes an enduring core of concern for security at home 2½ years after the terrorist attacks on the U.S. “The shock wears off over time,” Mr. Marks says, “but the fact that a third are concerned is something you wouldn’t have found before 9/11.” He also points out that respondents from the Northeast, where the 9/11 attacks occurred, showed the highest concern for creating a secure environment at home—36%, vs. 33% in the South, 28% in the Midwest, and 22% in the West.

COCOONING STRONG Even if some security-related concerns are lessening, the desire to stay in, and enjoy the safety and comfort of the cocoon, remains strong. A total of 54% of Lightspeed respondents said they were more inclined than a year ago to spend more time at home, and only 9% said they were less inclined. Mr. Vila says he was aware of the cocooning and do-it-yourself trends in the early to mid-1990s, before the 2001 terrorist assault. “I always thought of it in terms of economic reality,” he says. “When you have downturns in the market, you have people who are less able to afford a movie and less able to afford a contractor to come in and do a paint April 5, 2004 | Advertising Age |S-9

job for them. And I think that’s kind ago, while 28% said they were less a distinctly baby-boomer of something that has stuck, and inclined. phenomenon and will fade along needless to say things have gotten Despite the millions of dollars with the boomers. Others disagree. worse … you’ve got people who poured into shelter-themed “I think [the shelter theme] has CHEZ THE WORD cannot afford to have others do advertising, word-of-mouth has staying power,” says Tim Spengler, home improvement projects for more power to motivate people to exec VP-director of national WHAT PROMPTS US TO REFEATHER OUR NESTS them and can’t necessarily afford to spend on home improvements, broadcast at Interpublic Group of How influential are the following factors in your decision to spend money go on a trip or go to the movies even, according to the Lightspeed Cos.’ Initiative Media, New York. on home-related purchases?* so they’re doing more cocooning.” research. Slightly more than half “I’m not going to say the [shelter- The balky economy hasn’t cited advice from friends or themed TV] program trend, which is dampened Americans’ desire for neighbors as very important, while hot right now [has staying power]. “more” when it comes to shelter. nearly one-quarter cited ads for And trends definitely come in and The good news for marketers is such products and services. out, so I don’t know if a ‘Trading that if homeowners get their wish, The power of word-of-mouth Spaces’ in five years will be that hot they’ll need more products to fill raises the inevitable ROI question of a show, but the focus on the home their ever-increasing living space. about conventional advertising. feels like a longer-term trend.” The average new single-family “From an advertising perspective, home has grown by more than 800 maybe [shelter-related marketers APPRECIATION HIGH square feet since 1970, according to should get more involved] with local Mr. Vila, whose passion is U.S. Census Bureau data cited by community efforts and understand renovation of old housing, adds: the National Association of Home what’s happening at the grassroots,” “We baby boomers have probably Builders. More precisely: says Mr. Marks. “But that’s very made kind of a real impact on the Average home size was 2,320 tough to do.” generation that’s coming up, which square feet in 2003, up from 1,500 The reach of word-of-mouth in is after all the generation of our in 1970. children, in terms of our Of new homes completed in approach to housing, and 2003, 41% were 1,600-2,399 “The lifestyle the importance of square feet, vs. 26% in 1971; 19% maintaining housing and of ’03’s new homes were 3,000 category taps into of preserving good square feet or more, vs. 7% in housing. ... This newer 1986. what’s important in generation very much Of new ‘03 homes, 52% had two appreciates the house that or more stories, vs. 17% in 1971. people’s lives” may have been built by Among new ‘03 homes, 56% their parents or their had 2½ or more bathrooms, vs. the Internet age may provide a new grandparents, and appreciates 15% in 1971; 22% of 2003 homes opportunity for marketers, Mr. keeping it polished up and keeping had three or more bathrooms, vs. Marks says. “Word-of-mouth” is it in good repair.” 12% in 1987. no longer confined to asking your The Lightspeed survey affirms In 2003, 59% of new homes had neighbor about how her the interest of young people in home one or more fireplaces, up from remodeling project went. It extends improvement—for example, among 36% in 1971. to online communities where 18-to-24-year-old homeowners, Americans aren’t ready to thousands of people can 46% had taken on remodeling abandon their dreams of home recommend products. project within the last year, vs. 28% ownership. Of 1,001 people “The advent of the Internet and of 45-to-54-year-olds. surveyed earlier this year by Ipsos- instantaneous information is While the economy is Insight, 12% said they plan to buy a leading to electronic word-of- improving, and interest rates will home in 2004. Among those who mouth,” Mr. Marks says, and new inevitably rise, the focus on the intend to buy, 43% plan to buy a potential for advertisers to reach home won’t change, says David newly built home. Marketers of shelter-conscious consumers. Karp, senior VP-general manager remodeling products should note at Discovery Home Channel, which that the other 57% of that group ENTRY HOMES as of March 29 was the new plans to purchase an existing home. Ipsos-Insight says 48% of those moniker of cable’s Discovery Home Of the current homeowners planning to buy this year don’t & Leisure. surveyed by Lightspeed, 33% had currently own a home. Younger, “The lifestyle category taps into undertaken a remodeling or first-time homeowners are key to what’s important in people’s lives,” renovation project within the last fueling the continued prosperity of Mr. Karp says. “For most people, year. And 41% said they were the entire shelter industry. the center of their world is what more inclined to spend on home Some trend watchers have happens in their home.” *Percentages based on respondents providing a rating of 4 or 5 on 5-point scale where 5 refers to the influence being "extremely important." remodeling projects than a year speculated that the shelter-mania is CONTRIBUTING: DAISY WHITNEY Source: Lightspeed Research

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