Saturday, October 25, 2008

Catalog Prospecting: Thar's gold in them thar pages

Our contacts note that some catalogs are cozying up to magazines more than ever.

For example, a toy seller is binding a mini-catalog into a children's magazine, and L.L. Bean seems to be buying more print ads than ever. Magazines struggling to get ad pages (and which ones aren't these days) and catalogs wrestling with high prospecting costs: take note.

Consider the Bean example. It typically buys full-page ads for a single product, often with an invitation to request a free catalog. The traditional cataloguer's view is that magazine ad pages lack precise targeting and have a low response rate. So why does Bean, reportedly one of the most marketing-savvy multichannel merchants, keep running ads in national magazines?

The Bean folks know the metric that matters is cost per response, not response rate. A typical lightweight catalog (the kind that got slammed with postal rate increases of 20% or even more last year) probably costs about 40 cents per piece. An ad in a national magazine probably costs roughly 4 cents per copy ($40 cpm) these days. That means that a response rate on the magazine ad of only 0.5% is equivalent to a 5% response on a lightweight catalog.

Advertisers want to know which media have "engaged," responsive audiences but often have trouble tracking that. Bean has done it for them: You can bet that Bean tracks responses closely by medium, so any magazine that gets its repeat business must have a responsive audience.

My employer's advertising and marketing people would tell you that I don't understand advertising. But I've got one up on them and the rest of the magazine industry: The last time I checked, two mohels were running ads next to one of my Oct. 23 posts. Don't recall seeing that in People, Cosmo, or the other biggies.

Maybe I should contact one of those mohels to help me with budget reductions. They're probably much better than our bean counters at making cuts without damaging essential items.

1 comment:

Xman said...

Tree - You are on to the right thing - good writing too - will be looking for more!