Time Inc. is using database marketing techniques to improve the company's retail newsstand presence. Jeremy Koch, president, Time Consumer Marketing, took some time recently to talk with DIRECT about this venture and other circulation efforts.
DIRECT: It probably varies from magazine to magazine, but overall do you have more newsstand distribution or paid subscriptions?
KOCH: There's no way to generalize. It's everything from a magazine like Time with 5% newsstand and a magazine like people has 55% or 60% newsstand. We're all over the board. Every magazine has a slightly different publishing formula and we have magazines that fall in every point on the scale.
DIRECT: How are things on the retail side of the business?
KOCH: It's a very tough channel to work in right now. Because many of our wholesalers are economically challenged themselves, its hard to get the kind of support you need, in terms of marketing support, merchandising, execution, speed and responsiveness.
One exciting thing is that we're beginning to use databases increasingly on the retail side of the business. This means we can begin to bring some of the highly sophisticated and highly quantifiable marketing techniques we use on the subscription side of the business to the retail side. We're beginning to use good, hard, real data to refine where we send magazines at retail and how many we send. We can find where there's an opportunity to sell a Fortune or a Time or a Real Simple where its not on sale today, figure out how many copies should be allocated to different retail locations and do it in a much faster and more accurate way. I call it bringing the discipline of direct marketing to the retail business. And that's been pretty exciting and successful.
DIRECT: Do your direct mail efforts play heavily on branding?
KOCH: We try to make our direct marketing efforts be very efficient in terms of acquiring a new customer. If we can do that and also deliver a branding message, that's great. In some cases we've been successful at that. But frequently what works is a simple voucher package or something simple that really doesn't present a lot of information about the brand itself. It provides an order vehicle. With our mature magazines, like Time or Sports Illustrated, its pretty safe to assume the consumer is familiar with the magazine, at least on some level. There are different magazines—Real Simple is a good example, or Teen People—which are relatively new to their target markets and need a lot more explaining.
DIRECT: Is cross selling something done actively across different Time Inc. titles?
KOCH: Not very much. To a certain extent, where there are real affinities we do. Mutual Funds, Money, Fortune, Business 2.0, the whole business group. Within a group like that there will be a higher degree of cross selling. Likewise in the People group where you've got People and InStyle and Real Simple. Its somewhat ad hoc I'd say, as opposed to programmatic. But we also do a fair amount of multi-title marketing, where we try to market all of our magazines at the same time to public places, or within our own marketing efforts to our existing customer base. Another interesting [test] we've done recently, which blew us away because it was so successful, was including a subscription effort in our annual report.
DIRECT: Is DRTV still a sizable part of your circulation strategy?
KOCH: Really not, although its coming back a little bit. As the demand for advertising went up and the economy was so strong the kind of efficient low-priced airtime we were dependent upon basically disappeared. Now we're seeing it come back a little bit, because there's less demand for airtime. Prices are softening a bit, so it's getting back into the zone where we can afford it for direct marketing.
DIRECT: Is the reliance on premiums increasing or decreasing?
KOCH: In general, premium use is stable to declining. Risk free offers where you get a free trial period are more common in a lot of the media that we use. I'm not always sure as to why that's the case but these things seem to come and go, and right now what seems to be working is free trial offers.
For more of our interview with Koch, see the March 15 issue of DIRECT.
