Insert Media: Think Outside the Book, Part I

Integrating catalog, online, and retail divisions to offer multiple channels has become more the norm rather than the exception when it comes to catalog prospecting. So how can a traditional cataloger find new ways to prospect for customers in a such dynamic environment?

Consider thinking outside of the book itself and going back in time. Take a look at a proven media channel that’s been a steady workhorse for other marketers for decades: insert media.

While there are some catalogers using insert media as a viable channel for customer acquisition, the vast majority don’t. Insert media represents a cost-effective way to reach proven mail order buyers at a fraction of the cost of printing and mailing a full-size catalog.

Consider the economics. Between printing, postage, list rental and letter shop costs, a typical catalog runs at least 50 cents per piece to get into the mail. The media and printing costs in insert media cost 3 cents to 10 cents per piece to get into most programs, depending on how elaborate a piece you decide to print and which type of insert media channel you go into.

So it’s possible to reduce your cost per contact 90 percent, but with a likely drop in response of much less, yielding a considerably lower cost per order. Expect a lower order size on the initial order.

Consider these viable insert programs:

- Package inserts: included in the shipping package of a responsive mail order buyer.
- Catalog blow-ins: physically blown into a catalog mailing to a cataloger’s own customer base.
- Ride-alongs: similar to blow-in, but located in the mailing envelope of a promotion to a company’s own customer base (often a book or music club).
- Co-op mailings: a group of non-competitive advertisers sharing an envelope to mail to a common market.
- Card decks: a group of advertisers promoting via same sized cards, mailing to a common market. Outside inserts can sometimes be included.
- Statement stuffers: Invoices sent with invoices generated by utilities, credit cards, cable companies, oil companies, retailers, etc.
- Free standing inserts (FSIs): FSIs typically are included in Sunday newspaper supplements.

Prices range from about $0.02 to $0.07 per insert, plus printing costs, which can vary greatly depending on whether you print a basic single panel two-sided insert (which can cost as little as half a cent) all the way up to a 16-page mini-catalog. The latter is likely to push the weight of your piece high enough to cause a surcharge for the media expense and can cost up to $0.05 each depending on your volume. Rollout pricing for the media is clearly negotiable based on your response. Generally, the more expensive the program, the higher the response.

As you do with catalogs, test insert media programs. Not all programs work for every cataloger. The key is to test a variety of programs with small quantities (typically 50M to 100M pieces). Ideally, you should test at least 15 programs if your budget allows. If you test 15 programs, expect to find five to seven winners worthy of a significant rollout. Test programs with large rollout potential, preferably with at least 1 million inserts annually. Plan on about $2,500 to $5,000 per program for testing to get a good read on each program.

Developing creative for an insert should be easy for a cataloger. Just work within the look, feel and branding of your existing catalog. All of the elements, such as photos and copy, already exist, so you just need to adapt it to the format of the promotional vehicle that you choose.

It’s best to pick your hottest selling items for advertising on inserts, since you’ll have a limited amount of space available. Make sure that these products are representative of your overall catalog, since the goal is to bring in a customer that will purchase in the future as well.

It’s also important to choose the right insert programs. Be sure to match your customer demographics with those of the insert media programs you test. You may run into issues where your products are too competitive with a given program. With more than 1,500 programs and billions of insert opportunities available annually, there are plenty of places to target your products to potential new customers regardless of your product category. An experienced broker can help you sort through all the options and put together a well-rounded test program.

Come back next week for the second entry in our two-part series on alternative prospecting strategies, which will focus on DRTV and radio advertising.

Dave Smith is a former senior vice president of marketing for the Direct Marketing Association. He’s the founder and president of Incremental Media, a media brokerage firm. He can be reached at 516-557-2000 or via e-mail at dsmith@incrementalmedia.com.