Lost (and Found) in Space

JUST LOOK OUT a window-or in a magazine. Like the weather, direct response print advertising just won’t go away.

However, it’s difficult to say if print is as robust as it once was. Computer companies like Micron, Dell and Gateway seem to have blown new life into the medium, branching out beyond technology rags to more mainstream publications.

But like every other traditional communications medium the DR space ad faces challenges-and opportunities-from the ever-present Internet. And while the digital world may be good for magazine ads to an extent-Web site proprietors need to attract traffic, after all-some marketers are diverting money from print budgets to online experiments.

What exactly constitutes a DR space ad isn’t as clear as it used to be, either. As more and more companies that traditionally rely on image advertising include a Web address, an 800 number or both in their ads, the line b etween branding and response becomes blurred. And it works both ways: Direct marketers are quietly tiptoeing out from the dark and damp “marketplace” sections in the back of the magazine to the limelight of the “run of the book.”

Expenditures on DM magazine advertising in 1998 were 55.5% of total magazine advertising, up from 53.5% in 1993, according to the 1998 WEFA Report for the Direct Marketing Association.

DM advertising appears to be growing faster than image ads. In 1998 there was a 7.8% increase over 1997 in total advertising revenue, while direct response grew by 12%, according to the Magazine Publishers of America. For the first quarter of 1999, magazine direct response revenues were $321 million, up 3.5% from last year’s first quarter. But DR ad pages were down 2.2%, from 6,498 to 6,355.

Robert Dallas, senior vice president for list services at Venture Direct Worldwide in New York, says the rising costs and dropping response rates of lists make DR ads attractive today. Venture has a successful business in selling space for Fortune, Money, Parenting, Entrepreneur and other books. The company is sending about 21 pages an issue of DR ads to PC World.

DR ad space is typically 15% to 25% less than that for general advertising. Edwin Kabakow, president of media placers Media People, New York, says prices for the DM spots have stayed steady over the past few years, while image ad space has become more negotiable, so the differential between the two has probably narrowed.

DM Management’s J. Jill started doing regular space ads a year ago this month. “We placed a small ad in Martha Stewart Living and it was incredibly successful,” says marketing assistant Holly Clark. “We got a lot of new customers we weren’t getting other ways.”

In addition to Martha Stewart, J. Jill has appeared in Country Living, Gourmet and Harper’s Bazaar, among others, and will be in Vogue, Elle and Mirabella.

With the 800 number in the ads, consumers can either buy the product featured or order a catalog. J. Jill has different source codes and phone numbers to track response. “Some people reading the magazines aren’t traditional catalog buyers, but when they see the picture and description of the particular item it’s easy for them to give it a go,” Clark says.

Marketers who’ve learned that driving Web traffic online is easier said than done are turning to print. It’s cost-effective: Run some copy in an ad and send them to the site for more information.

“We’re getting an unbelievable number of e-commerce companies calling our department,” says Mary Hayes, vice president and director of corporate direct response advertising for Hearst Magazines.

But, on the other hand, even Hearst is seeing longtime advertisers move resources into their Internet efforts. “There’s always been attrition but now we’re losing it to e-commerce,” Hayes admits. Still, she says it’s a mistake for magazines to view the Internet as a threat. Instead, it poses the challenge of developing new solutions for clients. She has offered her advertisers inserts in invoices for Hearst products and access to the book’s subscriber file. Hearst is also entering co-op deals with sites, such as Women.com.

Ross-Simons Jewelers, Cranston, RI, a direct marketer of jewelry, china, silver, crystal and giftware, has long run print ads in shopper sections, including during last year’s holiday season. But this year it revisited that strategy and is putting all its resources into the Internet, to drive traffic to its e-commerce site (www.rosssimons.com).

“We found we were having better results attracting new customers and catalog requesters on the Internet,” says Peter Howard, vice president of marketing. In the fall, the company may look at running print ads again-print ads geared toward stepping up Web traffic, that is.

The Internet also has an influence in that people now expect their requests from print ads to be fulfilled more quickly. Traditionally, catalog requests often take weeks.

New York consultants The Douglas Jones Group once conducted a survey for a home-enthusiast publication and found half the catalogs arrived after a buying decision had been made. The Shop at Home “catalog of catalogs” has seen its express delivery service, for which it charges extra to send out catalogs in 24 hours, take off within the past year.

Just as many brand marketers have discovered DM, many direct marketers have caught the religion of the brand-response blend.

“I think there’s certainly been a shift in what people do,” says Lawrence Peters, managing director of direct response advertising for Hachette Filipacchi Magazines Inc., New York. “A lot of the catalog companies are now following in the footsteps of companies like L.L.Bean and Lands’ End and running a full-page ad and a BRC. It’s a bold image and brand awareness but it also gets response. “

For the coming fall season, Spiegel Inc., Downers Grove, IL, is moving in the opposite direction. Traditionally, it pushed images and left the response mechanism for the business reply card. But in the ads beginning to appear in July, it will have the response in the body of the ad with a bolder approach. (In one ad featuring a sexy woman the tag line is, “Every woman should own a dress capable of making a grown man cry.”)

For the magazines, the blending of response and brand doesn’t just go to how much the ad costs, but serving the advertiser properly by having the right department-general or DR-shepherd it.

Hayes says Hearst generally considers a company to be a direct marketer if more than half its business is done through the mail. Peters says at Hachette the determining factor is the method the customer uses to buy the product, not just getting a brochure.

Rosen/Brown Direct, Portland, OR, has developed what it calls the brand/response scale, showing how, by adding response mechanisms and pitches, an ad moves along from 100% brand to, say, 90% brand by adding a toll-free number, to 100% direct response by being garishly adorned with an 800 number, URL, coupon and threats if you don’t buy.

Richard Rosen, president and CEO, says marketers have to find their happy medium. He believes response mechanisms are necessary because people are so blitzed with messages in today’s society. “It’s not that the awareness model is totally dead, but we’re looking to move you to that consideration step.”

For one of Rosen’s clients, that step involved combining print with mail. DR print ads for Pervasive Software’s Web product Tango Development Tool were coupled with detailed pieces mailed to the publications’ subscriber lists. Pervasive offered the studio portion of the tool, a $495 value, free to entice people into buying the $3,500 Tango Web server. It also ran a sweepstakes. Two months into the campaign Pervasive had 30,000 leads.