Below the Line and Thriving

It's no secret that in these tough economic times direct marketers have to be able to justify their investments. So it should be no surprise that their attention is shifting to programs that emphasize customer-focused communications that yield measurable results and a definable return on investment.

Described in a Winterberry Group study as “below the line” media, this category includes targeted print and electronic alternatives that are projected to grow rapidly over the next few years compared with mass media.

Part of the reason for the pace of this growth is that changing consumer demographics are forcing DMers to abandon one-size-fits-all approaches. Given statistics that indicate multicultural Americans make up approximately 25% of the U.S. population and command more than $1 trillion in buying power, DMers need ways to reach them. And it's no simple task, since doing so generally means having to deal with any number of different customs and languages. Likewise, subgroups such as baby boomers — long a purchasing powerhouse — are beginning to enter retirement and will require different forms of communication than when they were in the work force.

PRINT RISES TO THE CHALLENGE

Print-based direct media has helped DMers address these audiences. Print can target with personalized information and also deliver the metrics demanded by marketing organizations. Here inserts are gaining an entirely new level of attention, whether as the main information component of a direct mail package or as ride-alongs in co-op programs like catalog blow-ins, billing statements and package inserts.

It may be surprising that DMers will spend a considerable amount of money to make their inserts more appealing to consumers. But the reason, of course, is results. Aided by technology that allows printing, personalization, die cutting and envelope forming in a single pass, even high-volume inserts can be personalized to “speak” individually to their targets.

Lettershops are getting into the act with complex inserts, particularly in the financial services, retail and consumer goods sectors. Mock credit cards, preferred customer discount certificates, and loyalty/temporary membership cards are proving their value in customer acquisition mailings and when pitching to existing customers. Additionally, the matching of personalized inserts to other custom components in the mailing envelope has been automated. As a result, DMers that previously relied on generic inserts because of cost now have an accurate, high-speed alternative.

SAMPLES BOOST SALES

Sampling also is getting a lot of play lately. For instance, a diaper manufacturer will send a sample to parents of a newborn, followed by periodic samples of size upgrades based on the child's age. The freebie provides the prospect with an incentive to try the product in a situation where a DMer plainly has a limited time to make an impression.

In another example, a grocery chain might attach a tea-bag sample inside a coupon book. The sample has the potential to increase both impact and involvement while driving sales.

UNDER THE RADAR

With the possible exception of freestanding inserts, the very nature of insert media takes it off the radar screens of the mainstream advertising world. Package inserts, catalog blow-ins and bind-ins, statement inserts, take-ones and other co-op programs just don't generate the same amount of visibility as a national magazine ad or television commercial.

But that doesn't mean recipients don't notice insert media. In fact, inserts draw very respectable response at a relatively low cost. This “stealth aspect” is appealing to marketers that use inserts to test products and offers, sell overstocked merchandise and inexpensively prospect — all while being virtually unnoticed by competitors.

POSTAGE HIKES BROADEN APPEAL

Higher postal rates generally bring more attention to inserts because of their comparatively low distribution costs. Insert media employ distribution channels that are already in place, so participants get the “ride-along” benefit. No question: The last few rounds of postal hikes sent advertisers searching for alternatives…and many found their way to inserts.

CURRENT TRENDS

• More program sponsors

  Just as postal increases cause advertisers to seek cost-cutting measures, the same conditions inspire DMers — especially catalogers — to establish additional revenue streams. The result? More catalogers allow a few non-competitive advertisers to ride along, mainly as blow-ins, though bind-ins and outserts are other possibilities.

• Catalog inserts

  While catalogers have long sponsored package insert programs that accompanied product shipments, inclusion of inserts with the catalog allows more companies to become sponsors. That's because not every cataloger has sufficient product fulfillment volume to attract insert media advertisers, but many DMers mail millions of catalogs annually to targeted audiences, which makes the reach more attractive.

• High-tech options

  Print technology has become more sophisticated, providing wider options for targeting and personalizing promotions of all kinds. Advanced catalog bindery technology now makes it possible to selectively include a variety of inserts, which furthers a marketer's ability to improve targeting and personalization, especially when combined with ink-jetting. So it's possible to drop an insert in catalogs sent only to recipients of a certain income level, geographic area, gender or even purchasing pattern.

• Variable-data printing

  The use of both monochrome and color variable-data printing in the transactional (or statement) sector is picking up. Rather than viewing statements solely as a necessary expense, companies are making these customer contacts a point of value and revenue. Statements are almost always opened and read, so they provide a great opportunity to promote additional services and gain income from select outside advertisers. Vast improvements in cost and quality have made color VDP a practical choice for high-volume statements, enabling the inclusion of personalized promotions.

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JAY GARNER (jgarner@transcontinentaldirect.com) is executive vice president for sales and marketing at Transcontinental Direct, Warminster, PA. LOUIS DE BELLEFEUILLE (Louis.deBellefeuille@transcontinental.ca) is director of sales for Transcontinental Printing in Toronto.