AND NOW FOR SOMETHING DIFFERENT

Mar 01, 2008 10:30 PM  By

If you’re a niche marketer looking for prospects, sometimes you just don’t know where to turn.

Big lists and mass media aren’t a viable option. They’re too expensive, and don’t generate enough replies to create any kind of workable ROI. You need an alternative. Alternative media, that is.

While mainstream media consists of tried-and-true marketing vehicles such as catalogs, space ads, and stand-alone direct mail, as well as newer media like e-mail and Web ads, alternative media is a little more under the radar. Typical alt media tools include inserts in statements, catalogs, and newspapers, as well as online venues like affiliate marketing.

Alternative media offers the chance to target specific consumers. Want to reach men who’ve bought cigars in the past 20 days? Or what about gardeners buying flower seeds in preparation for spring planting? Alt media lets you reach targeted audiences who are typically proven direct response buyers. Plus, alt media universes are vast, with huge opportunity to roll-out.

What do you need to know about the different alternative media choices available? Here’s a primer on several options:

Statement inserts

Often known as statement or bill stuffers, these small, single-sheet or multifold ads are inserted into billing statements for major credit cards, retail store cards, utilities, subscriptions and the like. These typically have a high response rate since there is minimal competition, plus the envelope must be opened.

Minimum tests are in the 500,000 to 1 million circulation range. You pay for printing plus insertion rates, which both depend on numerous factors, including format, paper, program and negotiation. Insertion can run $13/M-$20/M for a single-panel; $20/M-$30/M for a multipanel; and $22/M-$34/M for a bangtail remittance envelope. Printing costs can range from $8/M – $18/M. Always try to maximize the implied endorsement whenever possible, especially if you can use the program’s logo on your piece. Expect to get your first test within three to four months. Know, however, that the legal and branding approval processes by the banks can be long and tedious.

Catalog blow-ins

These inserts are a bit smaller than statement inserts, and are literally “blown” into catalogs just before they are dropped in the mail. Their special gift is that they really stand out — in fact, they fall out as a customer flips through the catalog. Response rates tend to be lower than statement inserts, but costs are often more favorable.

Tests can be much smaller here — generally around 50,000 per file. Rates are often negotiable, especially for tests. Again, you pay for printing the inserts and the insertion rates. Insertion rates can vary widely, but generally will fall in the $20/M-$35/M range. Expect printing to be approximately $8/M-$15/M, depending on format.

The approval process is less arduous than with statement inserts, but you need to submit an actual sample to be tested in the insertion machines, and if you are new to this media, you likely won’t have a sample. One solution is to ask your printer to produce samples for you prior to your print run.

Freestanding inserts

These multipage coupon bonanzas are pored over by millions of newspaper readers each week, and direct marketers can capitalize on this media for steady results. Having one ad designed with as many as four different coupon positions can gain you significantly more circulation. Creating one-third, one-half, and full-page sizes is also a plus. Space is somewhat limited, although circulation is large and available every week.

Rates work along the lines of a bid system: The more you are willing to pay, the more circ you are likely to get. But if you aren’t looking for tons of circ, you can snap up some great deals. You can also save by letting your ads sit and run only when space opens up. For a half- page ad and mid-range circulation, a range of $2/M-$3/M is a reasonable expectation. Lead time is generally four to eight weeks.

Card decks

These cello-wrapped decks typically target enthusiasts of hobbies like gardening, home improvement, fishing, farming, and woodworking. You usually must buy a run in the entire deck; most have several mailings available throughout the year. Costs vary, and are negotiable. You pay one price, which includes printing, insertion, and mailing (the deck publisher does it all for you). For typical single card rates, expect to pay in the range of $10/M-$18/M; jumbo cards can run $12/M-$20/M. This is a great place for A/B split tests.

Package insert programs


These inserts can usually be larger in size, as they are inserted directly into the packages of outgoing orders. The inserts ride along with the merchandise, usually in an envelope marked something like “Special offers for you.” Since orders are being shipped continuously throughout the year, you can buy insertion at any time, based on quantity or time of year, etc.

Here, you pay for printing your own inserts, plus the cost of insertion, which can run in the range of $25/M-$45/M; expect printing to be somewhere in the $8/M-$15/M range. Lead times are in the two- to three-month range. Responses usually “lag” as they are shipped out with orders over a period of time.

Affiliate marketing


Online, the evolution of CPM to CPC is now continuing to CPA, cost per action. Affiliate marketing — if done properly and with the right people — can be a powerful way to leverage your online dollars. As the advertiser, you pay only when a specific action you define — such as a purchase or catalog request — is completed.

Aside from finding the right affiliate program, the key is constantly managing your performance across each publisher Website, optimizing strong sites — you can often set your CPA differently among publishers.

A test program will likely take two to three months to get off the ground, and a minimum test usually lasts six months. Costs will vary, but if you can afford roughly 7.5%-15% of an order total to get new customers, then you will do well with affiliate marketing.

WHERE TO BEGIN


There are three essential keys to a successful insert media test:

  1. Test a wide range of different files

    Design a test, on your own or with a trusted broker. For example, say a gift marketer wanted to run an alt media test. A good recommendation would be to test 12 very different consumer catalog insert programs, three credit card statement insert programs, and three targeted business-to-business card decks. When the results are in, not all will be successful — but several will.

    Next, zero in on the successful files, and find all the others in their categories. Launch a second round with increased circulation in the repeat, successful programs, and test circulation in a dozen or so of the new, test files.

  2. Test as little circulation as possible within each file to spread your spend more among many files

    But remember, the results need to be projectable. Be sure to give yourself enough test circulation to get statistically valid results.

  3. You must test multiple offers in any new media

    How many offers depends on your business, products and number of controls. As a rule of thumb, if you can, try to initially test at least two controls or one control plus a variation (free shipping, multiple payments, a new premium, etc.). This will help give you a read on the first round as to whether it’s the media or the offer that is responding, or not responding.


Jeff Marsh and Karen Mayo are principals of Mayo and Marsh, a direct marketing consulting firm based in Waterford, VT.

Five tips for alternative media success


  1. Study the data cards carefully

    A program may seem like a perfect match for your demographic, but a closer look might reveal otherwise. Consider average unit of sale, continuous usage, and how the catalog’s mailing list was developed.

  2. Never test a prospecting or reactivation file

    You’ll want to make sure your insert is riding along in the catalogers’ drop to their house lists, which will serve as a good control. Try to be in the first drop to house list as often as possible.

  3. Test as many files at the same time with your initial test

    Have at least two offers in a statistically significant A/B split test.

  4. For larger catalog insert programs, be sure to test at least 100,000 inserts to get a good read

    As for package inserts, you can test a much lower volume.

  5. Tap your broker for advice on offers that have worked well in each file, as well as any publicly known information about repeat advertisers

    He or she should be able to provide a wealth of knowledge that may not be reflected on the data card.
    —JM/KM