Inserts Are They Still Worth Your While?

By Gretchen A. Peck

Some practical, modern insert media tips for catalogers.

Postal rates went up earlier this year, and they're expected to rise again in about another year. For catalogers looking for ways to offset some of their distribution costs, the time may be right to launch an insert media program or ramp up an existing one.

"One of the main challenges for any mailer right now is that you only have so many promotional dollars to acquire new customers," says Garrison Cummings, circulation analyst for Miles Kimball, a general merchandise cataloger. "With postage rates going up, you have to look down other avenues" to generate revenue.

Debra Goldstein, senior vice president of the LH management division of Leon Henry Inc., says she's seen insert media programs take off in recent years. "A number of new mailers have been jumping into the insert media mix, especially in the health and apparel categories," she notes. Blow-in programs are increasingly popular among her catalog clients. "They're less expensive to ride with and provide a large-volume distribution in a short time frame," she says, "although the results may not be as strong as package inserts."

In weighing the pros and cons of each type of insert media, Joyce Beggs, president of Media Horizons Inc.'s catalog marketing group, notes that co-op mailings can be attractive because they're low-cost. But on the flip side, they reach a general, rather than targeted, audience. "Because of that, the rate for inserting into a co-op is much less than package inserts," she points out. "Response rates will be less, but the distribution is broader."

As for other forms of inserts, there are a growing number of catalogers welcoming bound-in inserts into their titles, as well. Rochelle Shirk, vice president of marketing for Banta Catalog Group division of printer Banta Corp., says it's a viable alternative to blowing in a piece of print — although there likely will be added finishing costs to bind-in versus blow-in.

For some catalogers, third-party marketers provide a new revenue stream that can help offset postal costs, says George Zengo, president, catalog and retail services, for printer R.R. Donnelley. "With the recently announced 2007 postal rate case," he says, "we expect there to be a heightened level of interest in third-party insert programs. Today, however, their use is restricted to a small, but growing, group of catalogers," including such product categories as sporting goods, home furnishings, electronics and apparel.

Generally speaking, consumer catalogs have been more inclined to develop insert programs than business-to-business (b-to-b) mailers, Zengo says. But that may shift soon. "Today, we don't see b-to-b catalogers using third-party inserts as much as consumer catalogers," he says. "With the proposed 2007 postal rates, however, we expect more business catalogers to test third-party inserts."

Proceed With Caution

Shirk says that although many catalogers' interest may be piquing, some are cautious. Shirk says if cost-offsetting is the primary goal, catalogers should first look at internal production, paper and printing for reducing costs. "They should ask, 'Have I reduced all of my internal costs? Have I done everything I can without jeopardizing my brand?' And then, when they feel they've exhausted all of those options, they can start to look at [blow-ins]," Shirk suggests.

Then again, there are compelling reasons catalogers may shy away from them. "A catalog is sacred ground," says Jeff Holland, vice president of new media development at insert marketer Singer Direct. "The concern has always been, 'Are we taking business away from some of the pages in our catalog by inserting a blow-in?'"

For the most part, catalog inserts still fit a cookie-cutter mold (a multipaned, folded piece, less than 4 inches by 6 inches, on lightweight stock) and the technologies for getting them into the catalog haven't profoundly evolved. Inserts continue to be placed in packaging envelopes and blown in to catalogs the same way they have been for decades.

Zengo of R.R. Donnelley says that this "typical" insert format often is the most cost effective for the catalog client. "It's a standard format that runs well on conventional blow-in equipment," he explains. "They're inexpensive to produce — and lightweight — so they have an insignificant impact on postage."

Shirk of Banta notes that there are some limitations to what works in a bindery the most efficiently. Lighter weight stock, she points out, is less expensive for whoever is producing the insert, and it won't add substantial cost to the mailing. If it's a heavier weight paper, it's going to add weight to the total piece, and possibly move the catalog into a higher postal bracket. "However, if it gets to be too lightweight of a stock, it will not perform well," she forewarns.

Reinforcing the Brand

One of the benefits to the advertising partner, besides being able to tap a specific demographic, may be credibility. But this theory can work in reverse, as well. "We have seen this with a catalog client who inserted a high-end electronics piece into its high-end apparel catalog," Shirk says. "And they believe that the insert helped to pull up their brand. So, it works both ways."

General merchandise cataloger Lillian Vernon has been including inserts in a select few of its catalog titles for more than two years. "We began to approve inserts on a case-by-case basis, and have since expanded over time," explains Vice President of Marketing Anne Marie Coffey. "The incremental revenue we can generate from the blow-in program is the primary reason we allow third-party inserts."

The Lillian Vernon insert program consists of more than 2 million package inserts and blow-ins annually.

Lillian Vernon has selectively allowed blow-in pieces into both its core and Lilly's Kids (children's) catalog, and is looking to expand its program in the coming year. "We only allow third-party inserts into mailings of our house names," Coffey says, noting that the cataloger excludes prospects from any outside inserts. "In order to blow in an insert into a book mailing to a prospect name, you must have the list owner's approval to do so. Often, it's not allowed, or additional fees are charged. So because of the added complexities, we don't insert any third-party piece into a prospect book."

Choose a Partner Wisely

R.R. Donnelley advises its direct mail and catalog clients to be very careful in how they choose an insert partner, according to Zengo. "Most catalog clients evaluate the use of third-party inserts in terms of how they might impact their brand," he confides.

The cataloger must adjudicate each potential print partner, and determine if it has a brand image that's "consistent" with the catalog's own image. "The answer to that question will determine if — and what types of — inserts a cataloger will allow in their catalogs," Zengo says.

Besides demographics and circulation numbers, the direct mail partner also should consider opportunities beyond catalog insertions. That's because an insert program consisting of package inserts and blow-ins often provides more bang for the direct mail partner's buck, according to Singer Direct's Jeff Holland.

When you add up the number of customer touches you can get by inserting into packages and into catalogs, "The volume is enormous," Holland says. Lillian Vernon, for example, has an insert program that offers more than 2 million packages delivered annually, and blow-ins for more than 60 million catalogs. "The advertisers jump all over these opportunities."

Forming these win-win relationships between cataloger and direct mailer is anything but cut-and-dry, Holland cautions. "Simple, it isn't," he stresses. "As someone who's brokering an insert deal, you can make your recommendations, sit down with your mailer and decide which vehicles to test. But the final analysis will be in the test."

Another key relationship is between cataloger and broker. Many mailers, such as Miles Kimball, employ experienced insert brokers. "Our broker does more than just help us get a test in the mail," Cummings says. "The broker helps us determine what to expect in terms of response rates, which helps us make sure our inventory levels are adequate when we go out with an offer."

The broker also advises Miles Kimball on how to promote to the prospects who ultimately become customers.

As catalogers find more ways to personalize their books to customers, how feasible might it ultimately be to marry a personalized insert with a catalog targeted to a particular customer? Will the response rates be even more favorable? Are the technologies available to do it, and if so, is the cost worth the effort?

"In our experience," says Zengo of R.R. Donnelley, "the bigger challenge lies upstream with the cataloger, and/or the third-party insert publisher. In order for the personalized promotion to work effectively, the cataloger or insert publisher must have a robust database with sufficient information to drive meaningful personalization."

"Depending on your printer's capabilities and your mail file, the technology is available," says Coffey of Lillian Vernon. "The abilities for targeting are continually expanding and improving. The issue would be practicality. The added complexities would need to be realized in increased revenue."

Gretchen A. Peck is a freelance writer who covers the printing, publishing and graphic arts industries. Reach her at gretchenpeck@verizon.net.