Even casual readers have noticed the difference. Thanks to reduced spending across the board, magazines just aren't as robust as they used to be.
But although ad pages have been down in almost every category — including direct response — that doesn't mean DMers are abandoning the medium.
Joyce Beggs, president of the catalog marketing group at Media Horizons Inc. in Norwalk, CT, is seeing major catalog clients like Chadwick's and Lerner testing DR print in women's magazines such as Women's Day, Redbook and Marie Claire this fall. Both catalogers are looking not only to generate leads but sell product right from the page to increase the ROI.
“The goal is to make this a break-even new customer acquisition program,” says Beggs. “[By selling in the ad], we know right up front how well we're doing. And there's typically always a bounce-back catalog in every shipment, so the opportunity to upsell is immediate.”
The number of direct response advertisers taking advantage of those opportunities has been steadily decreasing. A recent survey by CMR and Publisher's Information Bureau shows that the total number of run-of-book and classified DR advertising pages for 2001 was 27,380.49, compared with 30,242.32 in 2000 and 34,243.72 in 1999.
DR page counts for the first seven months of this year were also down, according to CMR/PIB: 14,319.83 pages were sold for January-July 2000, a drastic drop compared with 20,165.67 over the same period in 1999.
Joe Mandese, editor of Media Markets Daily (formerly Media Buyers Daily), a Primedia publication, notes that for the first eight months of 2002 Magazine Publishers Association data shows that the advertising categories with the healthiest page counts for consumer magazine publishers included technology (up 27.5%), apparel and accessories (up 19%), financial (up 18%) and retail (up 11%). In contrast, the categories of media and advertising (which includes dot-coms, television networks and movie companies) and direct response were both down almost 3%. And for the month of August, direct was down 7%.
This doesn't necessarily mean that DMers want to advertise less. It may suggest, says Mandese, that as the magazine economy improves, publishers are starting to take fewer pages from DR advertisers. While they always want some DR advertising, magazine publishers don't want to become too reliant on it because the deeper page discounts mean a lower revenue yield.
“If DR becomes too dominant, publishers won't have enough revenue to support the editorial well, and they would need to have a bigger book,” he says. “If they got too fat on direct, it would become too self-limiting because [financially] they wouldn't be able to expand their edit capacity, and they have to maintain ad/edit ratios.
“Direct is such an efficient way of marketing a product, that in a recession or not, there's a direct return on the ads run,” he says. “I don't think they'd be cutting back. They'd be seeing this as an opportunity to upgrade their media positions in print or TV, to get more exposure to consumers.”
David Ketchiff, the co-owner of Charles F. Beardsley Advertising in Avon, CT, says he's seen increased interest in space over the last three or four years, attributable to decreasing response rates to rented lists and higher postal rates.
About 90% of the ads placed by Ketchiff's clients — including NapaStyle, Masters Collection, Design Toscano and Solutions — are for lead generation, inviting consumers to visit a Web site or request literature. Window coverings catalog Smith + Noble, for example, is reviewing its print advertising plan with an eye toward a more aggressive strategy, he notes.
In contrast, Larry Kimmel, chairman and CEO of Grey Direct, New York, doesn't have a huge percentage of his firm's clients interested in the medium. Overall, he says, the DR print landscape has changed.
“DR print is less than it used to be, simply because there is less spending than there used to be,” notes Kimmel. “The traditional guys are really not playing to the same degree the collectibles, the record clubs, the one-shot kind of things that were an important part of direct response print for years.”
Kimmel notes that he's seeing a greater vitality in DRTV than print.
“If you want significant impact, sales quickly, reasonable cost per thousand, DRTV pulls some viability as well,” he says. “More dollars are going there.”
“You are also seeing the conversion of more general advertising dollars to direct dollars,” continues Kimmel. “It is a degree of conversion. I think it's harder for some [print ads] to really qualify for direct response print discounts. Some advertisers are making the logical decision that they can convert some general dollars to direct response dollars and pay 50% less for the same space. And a lot of the people on the general advertising side really can't make the same conversion on print as they can on DRTV.”
Full-page space sales have increased for Hachette Filipacchi Media US, New York, particularly with marketers targeting their creative to the magazine genre. “People realize they have to be out there, they have to prospect,” says Lawrence Peters, managing director for direct response advertising sales,
The hottest book DR print sales-wise for Hachette right now is the motorcycle enthusiast title Cycle World. “Niche publications may be doing quite well because they're reaching enthusiasts,” says Peters. “Plus, think about it from a competitive standpoint. If you're a [décor catalog like] Sure Fit, you're going to want to test in magazines like Oprah's O or Real Simple. If you're a Harley-Heaven, you're not going to have as many places to advertise.”
As for product categories, Kimmel says that while pharmaceuticals have been pretty consistent on a year-over-year basis, the category appears to be relatively flat now, possibly because not as many new drugs have been introduced recently. He also sees some vitality in some computer areas, while Ketchiff sees strength in personal care and home décor products, particularly with “necessity driven” products such as window shades and blinds.
The returns on print can be gratifying. Beggs estimates that, depending on the publication, 65% to 70% of buyers are new-to-file customers. “For a mature company, that's an astonishing number,” she says. “A space buyer, as long as they're out there with product representative of their catalog, they should do extremely well.
“Obviously, she adds, “the goal also is to track the space buyer conversion to catalog buyer.”
But Peters notes that as multichannel campaigns become more popular, tracking becomes more difficult. “A lot of media gets short shift, because when someone visits a Web site from an offline source, there's almost no way to [successfully] track it.”
Of course, the ROI of a print campaign also depends greatly on the CPM negotiated with a publication.
Remnant space, particularly in newspapers, can be a good fit if it fills a need for a marketer, such as a desire to penetrate a particular geographic market, notes Ketchiff.
“I want to call myself the ‘remnant queen.’ I don't buy full price. We can't afford to. The program wouldn't work,” says Beggs. “One of the main factors is the rate base that I can get [a client].”
But there are some places where there is no negotiating going on, warns Ketchiff. “If you're doing fractional space and not a lot of frequency, you're not going to be able to get much. It's a case-by-case basis.”
Kimmel says he doesn't see much remnant space for the picking. “It's not like it used to be,” he says. But in certain areas, such as technology or finance, there are discounts available. “There's a greater hunger in the marketplace to a degree.”
In Hachette's magazines, there have been opportunities when general display advertisers haven't bought all the space. “It always amazes me that there are people who don't jump on things, or they think the offer always will be available,” says Peters. “And it's not true. There's more flexibility in the weaker issues than the stronger issues. If someone can't get their creative in and an ad falls out, a publisher might be very willing to put something in.”
Of course, DMers might find pricing flexibility in a publication with circulation problems or ad pages way, way down, says Ketchiff. “Then it becomes an issue of whether it's a good place to allocate the dollars anyhow.”
And, he says, there are titles that have held up quite well in terms of being able to hold — and in some cases increase — their rate bases. “It's not like you can just go out there and kill them on the CPM and drive them into some kind of unreasonable zone,” Ketchiff adds. “But I do think people are more accommodating and more creative in being able to give value-added support, like 800 directory listings, links and Web site listings within the body of the magazine that support the advertising.”
“There are always ways to work with publishing companies, if you can give them volume, if you can give them something to work with, show them there will be repeat business,” says Peters. “There's no value in one-shots. It doesn't do anything for you. You have to build up that trust factor.”
