Shifting Sources

Circulation Management, May 1, 2003

Advanced telephone technology - and with it, lower telemarketing costs - figures in as well, Green notes. "With the advent of better technology on the telemarketers' end, they've been able to increase the amount of data they can collect and reduce the time it takes to get it. Things like predictive dialers and other technology makes them able to do it and not dramatically increase the cost."

"Telemarketing has become my mainstay," says Steve Gardberg, circulation manager at Edgell Communications. "Direct mail has never been a big part of my program, and telemarketing is really the only other method where you can get the volume of orders you need," he said. Gardberg estimates telemarketing generates about 40 percent of Edgell's subscriptions, and for good reason: "It's fast, very controllable, and it gets cheaper every year."

ELIMINATING DIRECT MAIL WHERE POSSIBLE

"I don't think we do one piece of direct mail for new business," says Eric Rutter, vice president of controlled circulation for Reed Business Information. "The last couple of years, it's trickled to the point of zero. Between postage costs and production costs, it's too expensive. And at the same time, we were able to secure some favorable telemarketing rates. That now accounts for the bulk of our new acquisition efforts."

Reed is far from alone. With increasing costs and diminishing returns, PennWell's Advanced Technology Division began eliminating direct mail as a source for its books five years ago. There too, telemarketing has largely taken its place. Marketing books by phone, says Gloria Adams, PennWell's director of corporate audience development, results in a CPM of $3 to $12, versus $6 to $40 for direct mail. Compared to the Internet and telemarketing, Adams says, "the cost per name on direct mail is just prohibitive."

Of course, reliance on direct mail varies by magazine and by company. Direct mail, according to the CM survey, still accounts for almost 17 percent of new controlled subscriptions. It remains, for example, the primary source of new business for Lebhar-Friedman, says Lynn Bushell, corporate circulation director. At L-F, direct mail accounts for 90 to 95 percent of the new business on controlled books and 75 percent on paid. "We've actually mailed more in the last three years than we ever have," Bushell says. But part of the reason, she notes, is, "It's harder and harder to get the same amount of response. You have to mail more to reach your same goals."

Direct mail is also the leading source for new business at CMP's Business Technology Group, but its value is amplified by the fact that the mailed pieces push subscribers exclusively to the Web, virtually eliminating return mail costs. CMP's Zane says that factors tremendously into the success of that publisher's direct mail campaigns. "It's all about the economics," he stresses.

EMAIL ADDS TO THE MIX

Email's cost-effectiveness, even with its disappointing response rates, has moved it steadily up the source ladder. At CMP's Business Technology Group, email has replaced telemarketing as the second largest source.