Targeting the Truly Affluent: Jim Kerwin, The Private Journey

Jim Kerwin believes in quality over quantity – he may believe in on-line media, but feels when it comes to numbers, if individuals don’t have the money to spend, the traffic to the site doesn’t make a difference

The fifth in a series of conversations with our Corporate Members, where we will explore and discuss the future of the luxury industry, we spoke with Jim Kerwin, CEO and founder of The Private Journey magazine, the only magazine currently available on-board private jets.

Talking with Jim Kerwin, it quickly becomes apparent that creating The Private Journey magazine was a natural progression. Kerwin Communications enjoys the reputation of being one of America’s most important luxury market and lifestyle advertising agencies, specialising in the marketing of watches, fine jewellery, private jets, luxury automobiles, destination/tourism and more. Affiliate business, Roaring Thunder Media, are the builders and sellers of signage and digital advertising media in over 180 private jet terminals around the world.

After more than three decades of pondering the question, ‘How can the most affluent people in the world be reached?’ Jim came to the conclusion that it was inside the rarified cabins of private jets. To quote Jim, “If you’re flying private, there’s no faking it.”

Tell us some more about the climate in which you decided to launch The Private Journey.

Before the recession, the world was throwing around the term ‘luxury this, luxury that.’ When the recession hit, only true luxury brands were left standing. Prior to that, there were a lot of people out shopping…spending money…but they were the aspirational consumers. When the recession hit that aspirational customer was eliminated.

To put it in perspective, an average sale in 2008 for one of my clients was $7,500. But when the recession hit, their in-store traffic dropped but their average sale rose – to $11,700. Their business model really served them well – and frankly was a really good reflection of the marketplace. It really showed that the Ultra Affluent consumers were the ones left standing.

“ If you talk about someone that’s making $100,000, there is no way they are buying a watch for $40,000 unless they win the lottery ”

The term ‘Ultra High Net Worth’ is thrown around a lot these days. What do you feel is an accurate definition of a true UHNW, and what differentiates them from other consumers?

One of the reasons I started the magazine is because in my business we really want to speak to the Ultra Affluent. For example, Audemars Piguet’s average sale is $39,000. Mendelsohn numbers categorise high net worth at income levels of $100,000+. Today with an income level of $100,000 that person is taking home $75,000 and they’re more concerned with the daily necessities of life, let alone going into the market to purchase an AP watch for $39,000.

Seriously, if you’re talking about someone that’s making $100,000 a year, there’s no way they’re buying a watch for $39,000– unless they win the lottery.

What we focus on now is what’s going on today – what the wealth of our core consumer is today. From a branding standpoint, it’s not about buying a medium that in 5 or 10 years its readership may be able to purchase my client’s product. We have to look at the market now with a laser focus. As far as my clients are concerned, the day of media buying in broad strokes is over. Now brands are really looking at the medium they are buying — the affluence of its readers, as well as the reach it delivers.

Which is what led to creating the Private Journey magazine? Understanding the true audience for luxury brands and, in so facto, how best to reach them?

Through Roaring Thunder Media, we have access to over 180 private jet terminals around the world, so we know from placing advertising signage in those private terminals that we are communicating directly with the Ultra Affluent. That was the reason I started the magazine. With my clients from Kerwin Communications, I was always asking myself, ‘How can I reach the most affluent people in the world?’ I came to the conclusion – what better than people who are actually on a private jet.

Almost anyone can go out and lease a luxury car…you can lease one for $500 or $600 a month. And you drive around and people think you are doing well. But you can’t do that with when it comes to a private jet. When you’re flying private, there’s no faking it. If you are paying $7,500 an hour and flying from New York to Palm Beach every weekend, you’d be paying a minimum of $45,000 per weekend. There is no faking that! That consumer is going to have the cars, the clothes, and the lifestyle.

That, to me, is the dividing line. These consumers are on the jets, they are flying private. They have serious money and they have the disposable incomes to buy whatever they want to buy – when they want to buy it –it doesn’t have to be Christmas or a birthday…that’s the difference with this audience.

And why is print, over digital, the best way to engage these ultra affluent consumers?

When we buy on-line, it’s mostly geo-targeting. When we buy on-line, we’re not buying in broad strokes. I think there is a perception that when you buy on-line and you buy particular sites that everyone that is on the site is affluent – which I don’t believe is the case.

We buy on-line from the standpoint of geo-targeting, focusing on the consumer we want to reach. And, that’s how I created The Private Journey. I look at The Private Journey as a targeted magazine, with a strict focus on the Ultra Affluent. The biggest difference is that we are on-board the private jets as well as in select private jet terminals – which is a huge distinction from the magazines which are only placed in the private jet terminals. This presents an amazing opportunity to our advertisers and is an amazing product for the reader.

Several big name glossy magazines have announced plans to create digital-only magazines. Is this something you feel relevant or appropriate for the Private Journey?

What strikes me about magazines turning to on-line – creating an on-line presence – and in turn claiming to reach the younger affluents, is that when you create an on-line presence, you dilute your audience. When I created this magazine and the website that accompanies it, it’s all about access. If I was putting the content of the magazine on the site, anyone could access the content.

Many other ‘HNW’ magazines have iPhone and iPad apps and websites, which they use to say, ‘we are getting X amount of impressions and ‘the numbers are X high.’ But I feel that while they may be reaching these people, they’re not rich. For the most part, these people are aspirational. These people are not the consumers that have the disposable income to spend on luxury goods right now.

So when you create a magazine like we produce, if we were to go on-line and share the magazine on-line and then claim we have 200,000 impressions every day – for me, if they don’t have the money to spend, the traffic numbers don’t make a difference. All that being said, I do believe in on-line. I think it is the future. But as much as I believe in it, if you are really luxury, you have to do it correctly.

“ I do believe in on-line. I think it is the future. But as much as I believe in it, if you are really luxury, you have to do it correctly ”

So what are the most important factors brands should keep in mind, when trying to communicate with these ultra affluent?

With great brands, I think the quality is a given. People realise that with the finer brands, no matter what the category, the name is trusted and the quality is trusted as well. But what I think is most important to the Affluent is that these brands stick to their heritage – stay true to who they are – and that the quality and the experience remains the same.

It really is the overall shopping experience that you get with a brand, and the supporting quality that goes with it. The most important thing is that if a client spends $25,000 on an item, they feel good about it.

How do you think that will change now that e-Commerce has somewhat been proven as a significant revenue opportunity for luxury brands and they begin to build their own online flagships?

With brands on-line, it is not the same experience you get when you are in their boutiques. I don’t see brick and mortar disappearing in my lifetime. With the luxury consumer – the UHNW consumer— part of the experience of shopping is they want to know and see what the latest is for the season. They want to see the collections, they want the whole experience. They want to walk into the brick and mortar and want to touch the products.

It’s a dual track. I think both models work well together and really complement each other. When you think about Louis Vuitton or Hermes or Audemars Piguet, when you walk in those stores – how could you have that experience on-line? You can’t. It’s a different experience. You need both.

You need the on-line experience to stream video and to show people the runway shows from Paris, which is creating a bond with that person – it’s a wonderful thing. What it also does is ignite a desire to visit the store…and that is something luxury brands understand.

For others discussions regarding the future of luxury and communications, please see the following:

- Straight to Consumers: Jerome Allien, Boom Mobile
- Augmenting Luxury Realities: Jonathan Chippindale, Holition
- Challenging Luxury Communications: Fabrice Paget, Napkin London
- The Post-Advertising Age: Jim Boulton, Story Worldwide