Target marketing: publishers must lead

Folio: The Magazine for Magazine Management, Feb, 1989 by Norman W. Scharpf

Target marketing: Publishers must lead

The basic objective of the Graphic Communications Association (GCA) is coordination among the graphic communications industry segments--publishers, printers, advertising agencies, the Postal Service and the suppliers. This objective has a two-pronged purpose: greater productivity and enhanced market responsiveness. Nowhere is the need for the realization of this objective more apparent than in the bindery, finishing and distribution arena. In what is essentially the product design front, we've got an exciting convergence of new manufacturing capability, rapidly expanding computer capability and, most important, broadening advertiser interest in market analysis and targeting capability. The result is new opportunities for print.

But what is happening? Manufacturing is still in charge of what products you as the publisher have to sell. Cost cutting is the name of the game, and magazine and revenues as a share of the total advertising expenditure pie, according to McCann-Erickson, are declining. Even more distressing for the magazine field is the transfer of marketing dollars from the advertising pool to the promotion pool. According to J. Walter Thompson, advertising took 42 percent of the total in 1976, and just 34 percent 10 years later. I think it's time for the publisher to take charge, learn what opportunities are becoming available, and expand the product offerings to the advertiser.

Advertiser interest in new capabilities for magazines needs cultivating, but it's there--and it's growing. The Association of National Advertisers' Magazine Committee asked me earlier this year to speak on new developments in publication production and distribution. That discussion touched on advances in color quality, new offerings in paper grades, pre-press technology improvements, new insert capabilities, comailing options and a number of other advances made possible by technology growth. But the subjects that prompted the invitation and the greatest responses from that group of advertising executives were selective inserting and target marketing. They wanted details about the variety of inserts available--from gift guides to pop-ups--and about the approaches to audience identification that make segmentation possible.

To explore further this advertiser interest and the potential for magazine publishers and printers, we chose automation and market responsiveness as the subject for the opening panel of our 1988 Summer Forum on Addressing/Distribution. George Mahrlig, director of media services, Campbell Soup Company; Wayne Eadie, director of research, Newsweek; and Andy Paul, director of demographics, Donnelley Marketing Information Services, took part with Peter Moore, then vice president/distribution services, Neodata Services/Dun & Bradstreet as moderator. The result was an outstanding survey not only of potentials and pitfalls for publishers, advertisers and print media producers, but, significantly, a view of the sophistication already in place in market research and how we might profit from it in the future.

The past few years have brought substantial advances in bindery and mailing technology. It is now fairly common for a printer to have the ability to create or select customized printed products during the mailing process and, at the same time, retain a single output stream--a factor of increasing importance considering rising postal costs. In both magazine and catalog product areas, different editions are being selectively bound in a single stream, and finished editions are being recombined during the mailing process to maximize postal savings. One extremely important innovation is the development of polybagging, which can be selectively prompted to insert different advertising and editorial materials to supplement the basic product. Another is the application of ink-ject addressing and messaging, first in the world of catalogs, and now in magazines.

Why are advertisers interested? Today's media environment is one of spiraling costs, splintered vehicles and an ever increasing amount of reference data. As a result, the art of media planning has become more of a science than ever before, and certainly more marketing oriented and highly disciplined, with carefully worded statements of objectives and strategies. One of the most meaningful elements in the description of the target audience. That's an environment that demands efficiency, accountability and, most important, impact. Direct marketing is booming because of its target audience capabilities and the design flexibility that it offers. It's perfect for the promotion mood of today's advertiser. Yet, properly coordinated, it's all possible with magazines as well.

Driving an intense scrutiny of every ad dollar expenditure is media inflation, which, in a good year in the last decade, ran double the consumer price index. Driving that inflation are television and television commercial production costs--and they have now set the stage for advertisers to look at other media. Magazines, through the tremendous technological innovations of the decade, measure up very well.