* Luxury goods makers belatedly embrace the Web
* Launch costs covered by advertising already sold
* Site may charge readers in future
By Georgina Prodhan
LONDON, Oct 1 (Reuters) - The Financial Times will launch an online version of its luxury lifestyle magazine supplement, How To Spend It, this weekend, hoping to capitalise on a rush to the Web by its advertisers and to reach new audiences.
Howtospendit.com will be sponsored on its Oct. 3 launch by Swiss watchmaker Rolex, LVMH’s (LVMH.PA) Krug champagne and Harry Winston Diamond HW.TO among others. The Pearson-owned (PSON.L) Financial Times said it had already covered its launch costs.
“Luxury goods companies have been slower than other industries to move to online, but I think they have very quickly realised the importance of movement,” Ben Hughes, the FT’s commercial director and deputy chief executive, told Reuters.
Howtospendit.com, helped by the Razorfish ad agency recently sold by Microsoft (MSFT.O) to Publicis (PUBP.PA), aims to recreate the luxury feel of a glossy magazine through features like a 3D viewing format and particular ways of advertising.
For example, it will offer a large-format ad displayed while the content page is loading in place of the full inside-cover magazine ad format popular with luxury-goods makers.
It will also host microsites for content created by advertisers, but managed by the FT in a style consistent with the online magazine’s own.
Analyst Chuck Richard of U.S. publishing and information research firm Outsell estimates about 43 percent of marketing spending by large U.S. companies goes on their own websites.
Online advertising revenue at the FT doubled in the first half of 2009 as advertisers followed readers onto the Web — where they are also far cheaper to reach. It now accounts for 15 percent of the FT’s total ad revenue.
The Internet is the only medium to attract increasing ad spending in the current environment, in which global recession has forced companies to cut back drastically on advertising. Newspapers and magazines have suffered the worst.
The FT will offer advertising on howtospendit.com packaged with ads for the print and online newspaper and the print magazine. It has not hired any new sales staff, and has taken on a handful of extra editorial staff for the new venture.
Hughes said howtospendit.com would initially be free to view but would consider charging for its content — which includes text and video unique to the online version — in the future.
He said he did not expect the online magazine to cannibalise advertising revenue for the print magazine. “I don’t think there’s going to be a mass migration,” he said. “The newspaper and the magazine — they’re not dead.” (Reporting by Georgina Prodhan; editing by Leslie Gevirtz)