In this blog post our CEO, Steve Mitzel, and Senior Vice President of National Sales, Mike Kowalczyk, share their perspectives on pivoting your print circular marketing strategy to target more effectively and increase response and ROI.
The shutdown of many businesses (some temporary, some permanent) followed by constrained re-boots stemming from the COVID-19 crisis has undoubtably sent shockwaves through marketing departments.
Most large retailers and restaurant companies have furloughed or restricted good portions of their marketing teams. Moreover, the reduction in business investment and broadscale cuts to ad spend have affected thousands of regional and national companies across the country. According to the Interactive Advertising Bureau (IAB), almost a quarter (24%) of media buyers, planners and brands have paused spending to at least the end of Q2 while nearly half (46%) have said they would adjust their ad spend in the same time period. Concurrently, consumer spending is changing faster than it ever has with the pandemic only fueling behavioral changes throughout the decision funnel and path to purchase.
Left with less people to do the work, less effectiveness and reduced budgets, now is the time for marketers to assess every dollar that they are spending. Many are continuing to pour money into their weekly circulars which continue to be their most underperforming media vehicle. Additionally, as they pour money into a diminishing vehicle from an ROI perspective, marketers have opportunity to be more strategic in HOW they are distributing their circulars. It has become a commodity line item in the marketing budget – a must do – with little thought as to how to improve the performance of this vehicle and the corresponding ROI they will and have evaluated other media within their spend pool.
Historically, weekly circulars were anchored around legacy merchandising cycles and a Sunday newspaper distribution date. Paid Sunday subscribers are now below 30 million, losing 7% or more households each year. The combined reach is not even a fifth of American households.
The lack of inclusivity and diversity continues to also plague the traditional circular. According to an MRI-Simmons National Consumer Study: “It is clear that the local newspaper audience continues to lack diversity. Hispanic adults are 35% less likely than average to read them (down from a 24% below average likelihood last year), and non-Hispanic African Americans are 12% less likely, down from an 8% below-average likelihood last year.”
For a media that marketers are spending billions on each year – declining audience, missing key targets – isn’t it time to think about repositioning and migrating the circular to something far more effective?
Consider migrating your circular to a monthly circular program, driving month-long sales or to key “tent pole” events or monthly plus key tent pole events. There is NO doubt that the circular should no longer be distributed via newspaper subscribers. The solution is less frequency and distribution via shared mail in the mailbox. Shared mail provides targeting down to sub zip code levels and even postal carrier route levels. Micro targeting to a more inclusive and responsive audience will drive a higher ROI and also allow marketers to redeploy dollars to more effective, personalized and higher ROI media channels.
Mail matters now more than ever. Population growth, migration and shift in density has illustrated that targeted reach in the United States, while maintaining responsiveness and engagement, is not only available, but available in a sustainable vehicle. New research by Valassis showed that 37% of consumers are more excited now for mail deliveries than they were before the pandemic, while 30% report they’re spending more time reading the mail now than pre-coronavirus. The Spring 2020 USPS Mail Moments study indicates that eight out of ten consumers continue to pick up and sort their mail at first opportunity, and that the actual time spent sorting (3.9 minutes) and reading (6.9 minutes) is consistent over time. Millennials spend the most time both sorting and opening/reading their mail. Additionally, the study found 35% of those receiving mail tried a new retailer or product after receiving an ad in the mail. Simply put, mail matters, maybe even more than ever.
The reality of the situation is migrating the print circular to a more targeted, responsive vehicle like the mail and decreasing frequency will increase ROI exponentially.
Let’s look at a case study from a recently executed program for a National retail chain:
- A large retailer ran 20 million circulars weekly at a $75 cpm for a total annual spend of $78m.
- They migrate to a monthly circular and 4 key tent pole events and reduce their distribution per circular event to 18 million, targeting only their highest propensity targets using a blend of proprietary and syndicated data. Total annual spend now is $22 million.
- Savings of $56 million that can be redeployed or taken to the bottom line, with a significantly higher ROI.
Let’s also analyze a different look:
- A large retailer runs 15 million circulars 26 times a year and pay a similar $75cpm, for a total annual spend of $29.3 million.
- They also migrate to a monthly circular and four key tent pole events for an annual spend of $18 million.
- Savings of $11 million that can be redeployed or taken to the bottom line.
Simple answers are often found at the end of complex equations. This one is clear. Spend less, make more, and evolve to survive and thrive. Now is the time during the Coronavirus economy to pivot and maximize your print circular investment. We are here to help.