Net Gains

Folio: The Magazine for Magazine Management, April 1, 2000

Direct marketing over the Web is giving publishers the means to increase response rates while cutting costs.

WHILE VIRTUALLY all magazine publishers by now have at least some presence on the Internet, most such efforts are still rudimentary--some re-posted content, a stock sub form, and maybe some Shock-wave graphics (snazzy but not overly useful). As a result, full-fledged E-commerce has yet to transform the publishing industry as it has so many others. However, all of this could soon change. Technologies and services are quickly coming to market that will give magazines, large and small, the ability to deliver custom messages-- editorial and advertising-- across the World Wide Web. Beyond that, the Web will give them power to interact with subscribers in new and innovative ways.

The upshot: magazine publishers, circulation managers and marketing executives will be able to give advertisers more bang for the buck online, while vastly increasing response rates to Web-based subscription and promotional campaigns.

Yet despite all the new technology, tried and true database marketing techniques are playing a big part in this revolution. Familiar concepts such as multiple regression modeling, lifetime value analysis, and name and address validation are proving to be extremely powerful when combined with the Internet's capacity to create real-time feedback loops.

CHECK'S IN THE MAIL

Nowhere is this more true than when it comes to direct e-mail, a fact that more and more publishing executives are beginning to recognize. "What we are doing is actively trying to capture e-mail addresses," says Sigrid Zimmerman, director of renewals and billing at New York City-based Hachette Filipacchi. "This is being done on all renewal forms, and we're doing it this year in a truly aggressive fashion because it has tremendous potential in terms of cost savings and customer service."

Zimmerman says the program reflects an increased focus on the Web by Hachette, which publishes well known consumer titles such as Elle, Woman's Day and Car & Driver. "We are being so aggressive that we are looking to collect e-mail addresses on every single renewal form, and every single bind-in and blow in card. It's a new means for me to solicit renewals, which we think can be especially valuable when applied to our continuous service campaigns," says Zimmerman.

The marketing and circulation veteran adds that the economics and timeliness of e-mail campaigns are extremely compelling when compared to traditional direct mail: "We're looking to get equal response from an e-mail message as we would from a first effort renewal notice, but it can be done for a third of the cost. Also, the turnaround is usually within 24 hours, so that precludes me from having to mail a second notice, which cuts the cost further."

However, Zimmerman cautions that publishers must be careful not to overburden subscribers with too many requests for information when asking for an e-mail address: "What we did was lengthen the form and put a separate attachment on the bottom. The last thing I want to do is confuse the renewal document itself with too many requirements--that's the thing that is going to get thrown into the desk drawer. Also, we were very careful in our wording to comply with the opt-in requirements."

Beyond using e-mail as a means to increase renewals, Zimmerman believes the medium can also benefit Hachette's other online ventures because it can be used to drive eyeballs to the Web. "Eventually, we will add embedded links in the email that direct readers to our various sites, where they might, for instance, be able to subscribe using a credit card," Zimmerman says. "Right now, we're just sending a note thanking them for providing us with their e-mail address; it's a good way for us to make a connection with them and test the validity of that address at the same time," she adds.

Experts say circulation professionals like Zimmerman have good reason to be excited about e-mail. In fact, they say e-mailed renewal requests hold the potential to outperform traditional direct mail because the technology now exists whereby messages can be sent to potential subscribers at the very moment they log on. Alex Amoriello, VP of Montvale, New Jersey-based database service provider Automated Resources Group, says there are a number of ways in which the Internet can become a powerful, real-time weapon for magazine marketers: "We are getting to the point where we can provide enough intelligence so that when someone comes on to a site, the backend database that's connected to it will know whether that person is a current subscriber, and whether they are up for renewal. From there, we can generate an e-mail asking for that renewal, or we can push them a billing form."

Amoriello adds that messages generated in such a manner can be highly customized and targeted. "What we want to do is match that person who is online back to information we have in the database. So if it's someone that likes fishing, then we can respond to them with tailored advertising reflecting that--maybe it's an ad for a fishing lodge or sporting goods store."