Agent-Sold Subs – New Directions?
Just in case you’ve been in jail or on Mars for the past six months, the multimagazine subscription business is being devoured by the legal systems of a variety of state governments. You can practically see the feathers sticking out of the mouths of attorneys general all over the country. They’ve finished dining on American Family Publishers, and Publishers Clearing House is the next course. For pure gluttony, it has almost no precedent.
Both AFP and PCH will recover to some extent, possibly – as we’ll see later – in our lifetimes. AFP’s parent corporation Time Inc. has already started mailing a kind of clone of the AFP package. These companies simply have too much backing and capital not to. But the sub acquisition marketing business won’t be the same.
What has traditionally driven the sub acquisition business? Beyond the vertical buyer, the primary market – say, the golfer who wants to read about golf – there’s enormous revenue to be derived from procuring the signature of someone who is only marginally invested in the subject matter of a magazine to which he or she is considering subscribing. If you pound away with direct mailings to a not quite invested prospect, sooner or later that individual’s indifference will be eroded through curiosity.
Through the 1970s, the response to a solo subscriber acquisition package was seldom quite enough to pay for the mailing, but the prevailing thinking was that the sub offer was a loss leader, to be made up through renewals. That might very well have been true. But the pace of business soon outstripped this kind of thinking. The maw of a company is its marketing department, while top management tends to be its intestine; one growls, and you have to keep throwing meat into its other end at a faster and faster rate. A slow, steady circulation buildup clearly was unsatisfactory.
Hence the rise of the multimagazine agent sold service. Its premises were that a cooperative approach to subscriber acquisition, in which huge choice and low sub rates were stressed instead of the magazines’ contents, plus the draw to the prospect of a large sweepstakes, would lead to better results and faster acquisition. It didn’t take a maven to realize that what was being sacrificed to the great monster in this scenario was renewal percentage. As with any direct response offer, the more solid the affinity between respondent and offer, the greater the rate of repurchase or continuity – and vice versa. Woo ’em with a sweeps, you’ve got a sweeps respondent who’s more or less interested in the subscription – less a good deal of the time.
What began to unfold, therefore, was a kind of cyclical dance: The more subs acquired, the more the demand from the Top Floor for more subs, the more agent sold sub offers mailed; the lower the percentage rate of renewal, the greater the pressure to use agent sold services.
Sound like a recipe for disaster? Well, it wasn’t. Everybody learned to live unhappily with the system’s shortcomings. The mags had to deal with increasing investment both in agent sold sub acquisition and a strong renewal effort. The agent companies had to develop more insistent copy to persuade prospects that instant riches might be theirs. No one really liked it. But somehow it seemed to work.
Let’s skip the catastrophes recently inflicted on us by the attorneys general. The new millennium has brought us a different kind of disaster: flood tide among magazine publishers. While non-renewals are jumping off the boat with their usual rapidity, the entire cycle of bringing new agent sold subs on board has been obliterated.
As the waters recede, magazine publishers have begun to look at damage control, in the form of other programs and vehicles.
The collective gaze has focused on a group of projects I’d like to describe generically from a marketing viewpoint. Most will work to a very limited extent. None will send magazine marketers into paroxysms of delight in the immediate future. But there’s hope.
– Unique media: Package and billing inserts, co-ops and ride alongs.
– The Internet.
– 800 number voice-alongs; inserts glued to the back of John Rocker’s autographed picture (see “Potpourri,” page 71).
– And – Gawd ‘elp us! The mail! Where’d this come from?
Unique Media
This vehicle has been used with minimal success in the past by agents. It’s terrific for the presentation of multiple magazines; it’s lightweight and costs less than direct mail.
The problems are twofold: First, they lie in the nature of the medium. Package inserts vie for attention with each other and the merchandise itself. A multimagazine piece, however, must take the prospect’s full attention from first glance. Historically, one of the advantages of a solo $10 million sweeps offer is that the giveaway is so humongous it has focused the prospect’s attention on the direct mail piece. The problem with inserts is that distracting the user from the merchandise he or she has ordered is hard to do.
More important, the package insert program is the ultimate impulse vehicle in marketing. It has traditionally been virtually impossible to sell a product via inserts. Get a continuity customer with a premium and a blaring headline? Yes. Get an inquiry? Yup! Get a sale? Nope!
All in all, inserts make for a difficult environment in which to sell magazine subscriptions.
The Internet
The advantages of online multimagazine advertising are a huge market of prospects, very interested and involved; a low cost of advertising if a package is done right; the ability to put a huge number of screens up on the Web site to back the offer, analogous to pages in print literature; and the ability to read results in a blink of a second. That, at first glance, would send anyone to grandmother’s house. However, a second look might make us realize that big red wolves lie waiting in the woods.
The Net is the penultimate impulse response of all marketing vehicles, second only to package insert programs. Sales of magazines to a wavering market might bring forth good front end response, given a fine premium, but your renewal rate will fall below Bobby Bonilla’s 1999 batting average.
The market also is very vertical – and despite its great size, very homogeneous – and will be for the next five years, at least. Ages 20-39 are the magic numbers. There’s a good argument that the market is so big that an advertiser will get good responses to anything. But don’t forget the Net’s inherent demographic verticality.
Potpourri
Actually, something good will come from the mishmash I’ve described. Direct response marketers have been blessed with some of the most creative, weird ideas in advertising history over the past century, from the Dutch door to banner advertising. You can bet someone will come up with something very OK. Just keep thinkin’, and we’ll go a long way toward licking the multimagazine problem with creative new programs and vehicles.
The Mail
That’s snail mail, folks. Something, somewhere, will work in the mail.
Possibly that thing might be a form of the umpteenth million-dollar sweeps. It’s got a lousy name today, but let’s not forget that, historically, the things that drive Americans most are greed (the desire for the quick buck) and self-improvement (the desire to learn things quickly and efficiently). Sweeps do the first, magazines do the second. Sooner or later, the attorneys general will go on to the next thing that’ll earn the states big bucks, like suits for mistreatment of house pets.
At the risk of sounding like an Old Death Valley sheriff pining for the good old days, it’s worth recounting the advantages of solo mail in regard to a multimagazine piece. First, it’s an ideal vehicle for a detailed package. You can put lots of material in the envelope. Second, you can test with deliberation and careful planning, which is worth doing with that kind of offer. Third, the marketer has targeted lists to work with. Fourth, you can convey both of the essential vital messages: Read something and win something. Or win something and read something. Whichever you prefer.
So, sooner or later, AFP and PCH – and whatever new multimagazine offers start up in the next era – will work again. Just keep your eye on the essential nature of the customers, ladies and gents, and things’ll get better.
