Target marketing: who's doing what

Folio: The Magazine for Magazine Management, Nov 1, 1990 by Cary Peyton Rich

Target marketing: Who's doing what

Sure, Farm Journal was the first to do it, way back in 1982. American Baby and Games followed. But the use of target marketing, especially selective binding and ink-jet printing, still hadn't really caught on even in the late eighties.

Then Time Warner announced its TargetSelect program for January 1990. TargetSelect offered advertisers segments of the circulations of three Time Magazine Co. titles: Time, Sports Illustrated and People. Advertisers were given a choice of three targeted groups: Direct mail respondents, over-50 readers and recent movers. Custom segments of the subscribers were also available. Suddenly, industry observers were interested and alert. Many experts predicted that mainstream use of the technology would be determined by Time's success or failure.

"We believe that we have demonstrated the value of the technology to the industry," says Bruce Judson, director of marketing for TargetSelect. "It's natural that our competitors are looking into it."

Nonetheless, some still argue that publishers still aren't taking advantage of the technology as much as they could--that databases aren't used as creatively as they could be. "Printers have the technology and the electronic capability," says Henry May, director of marketing for World Color Press. "They're ahead of what publishers have in their own files. Publishers don't know enough about their subscribers yet to market it properly. In our minds, [target marketing] is certainly coming, and we're preparing for it."

Still, publishers are experimenting. "With Time endorsing and strongly supporting this technology, it certainly has gained wider acceptance," says Larry Glover, executive director of corporate marketing planning for Essence. Glover adds that "competitive pressure to be innovative" and added-value programs are equally strong motivators for publishers to explore target marketing.

Many more magazines are taking advantage of target marketing now than did just one year ago, and it is fast becoming a mainstay in the magazine business. Whether it takes the form of ink-jet personalized messages or pinpointed circulation direct-mail pieces or selective binding, target marketing is creeping into the plans of many magazines. And while many publications admittedly use the technology in traditional ways--"basic-type stuff, like expires," as one printer puts it--others are testing the limits with innovative target groups and more finely targeted groups for selective binding.

Increased advertiser interest

Some advertisers and advertising agencies had also taken a wait-and-see attitude toward target marketing. Whatever resistance there was, though, seems to be wearing down as clients see tangible results from Time's program, as well as others. (Some observers say that advertisers were never wary of the technology and that advertiser interest is what led to the current onslaught of magazines offering target marketing.)

Frank Smith, vice president/associate director, publisher services group for Young & Rubicam, says, "The databases that are available are rather limited, but that's because people are just starting to get involved with the technology." Nonetheless, advertisers are interested in target marketing, and some are even working on developing their own databases of customers or competitor's customers. Eventually, advertisers might merge their lists with publishers' lists and come up with a targeted segment. "There's incredible potential," Smith says. "Clearly it will play a bigger role as we get further into this decade."

With tough economic times forecast, magazine publishers are finding that advertisers want more for their money. "We are challenged to justify spending," notes Essence's Glover. "[With target marketing] we can begin to track results of the advertising they're doing. That's real value for the client. And they are warming up to it quite a bit."

The technology obviously does not work for everybody. Niche magazines, by their very nature, find further targeting of their already highly specific audience is not practical or necessary. And business magazines, with typically smaller circulations, also find problems making target marketing work.

"Major list enhancements or overdays--I don't really see them working for business magazines," observes Elaine Tyson of Tyson Associates, a direct mail consulting firm. "No business publisher is going for that kind of target marketing; their lists are not big enough."

Taking AIM

The results for Time's first TargetSelect customer, Isuzu, are well known. Newspaper accounts told of local dealers getting as many as 40 invitation-clutching test drivers. Judson recalls Isuzu's agency saying, "The results were very satisfactory. There were lines of customers waiting for test drives."

Adds Judson, "That's a very strong endorsement."

When Newsweek decided to develop its Advanced Individual Marketing (AIM), it considered various segments of its circulation and settled on recent movers and affluent seniors as the first two target groups to offer. Newsweek's program is relatively new, having been offered only since June. "This is just the beginning," says Nick Friese, director of new business. "We're looking at two or three more groups with circulations even larger than the first two." Circulation for recent movers is 250,000; for affluent seniors, 300,000.