When Maryann Martindale, catalog and direct mail marketing manager of productivity tools merchant Franklin Covey, first considered accepting package inserts, she had several concerns. In particular, she was worried that including someone else’s marketing materials in Franklin Covey’s outgoing packages would dilute the Salt Lake City-based company’s brand.
“We thought we’d have no control over the pieces inserted in our packages,” Martindale says. “You spend all that time building your brand and could potentially lose momentum by exposing our customer to another marketer. It was a major concern.”
But since testing a package insert program two years ago, the company found out that the benefits outweighed the risks. The cataloger’s worries have been unfounded, and Franklin Covey has used the revenue produced by the program to prospect into new customer segments such as small businesses and real estate.
Franklin Covey isn’t the only company that has had misconceptions about insert media. Despite their proven success in expanding list universes and pumping up response rates, insert media — package inserts, blow-ins, bind-ins, ride-alongs — are in dire need of a public relations campaign.
Insert media offer more than 7 billion units for distribution each year, according to insert media firm Stanton Direct, and the gross revenue derived from it exceeds $1 billion. But although inserts have been proven to generate new customers and additional revenue, many catalog companies still shy away from marketing via inserts and from renting out their lists for insert programs.
“There’s a general lack of understanding of what insert media is,” says Al Stanton, president of Elmira, NY-based Stanton Direct. “More often than not a potential client thinks it’s a vehicle for a mass audience and that you can’t target a specified audience when, in fact, you can target specific segments.”
Below, we correct some of the direct marketing industry’s most common misconceptions about insert media.
MYTH: Insert media are downscale.
Reality: The notion that insert media are effective only for sellers of low-ticket merchandise remains, says Jim Lynch, vice president of Peterborough, NH-based Millard Group’s insert media division, AM/Direct. But, as more upscale brands such as consumer electronics brand Bose, American Express, and specialty coffee purveyor Gevalia continue to test insert media, the low-end image should start to change. “Marketers may take a bit more notice and may be more accepting of insert media than they would have in the past,” Lynch says.
The presentation of insert media can play in to the sense that they are more downscale. If you sell high-end gifts or decor, for instance, you probably don’t want your outgoing packages littered with multiple papers and promotions. Franklin Covey’s Martindale, for one, has cleared that hurdle by putting each marketer’s package insert materials inside an envelope that reads “Special Offers from Our Franklin Covey Partners.” The envelope has helped Franklin Covey maintain the control it craved, Martindale says: “It’s worked thus far.” Companies can also refuse to accept certain offers, of course, and can limit the number of inserts it will carry per package and the number of blow-ins or bind-ins it will include per catalog.
MYTH: Insert media are too expensive.
Reality: On a simple cost per 1,000 basis, insert media are cheaper than traditional list rentals. “With a cost of $50/M-$60/M per insertion, it’s significantly less than a traditional rented list, which is well over $100/M,” says Cheryl Bagdan, senior account executive at Danbury, CT-based list firm Statlistics. What’s more, she says, package inserts in particular reach consumers when they’re especially receptive. In essence, says Bagdan, “they become hotter than a hotline buyer at no added expense.”
MYTH: Creating a special marketing piece for insertion takes too much time and expense.
Reality: Formulating a special marketing piece for insert media doesn’t have to cost a fortune, says Bagdan. A mailer can modify a space ad it may be running, modify a page from the catalog, or produce a mini-catalog of best sellers, she says. Alternatively, you can opt for a two-step process in which the insert serves as a catalog request vehicle. In that case, all you’d have to create is a business reply card for use as a blow-in or bind-in. If you don’t supply postage on the card but instead require the prospect to stick on a stamp, it serves to further prequalify the requester; after all, he’d have to be somewhat serious about shopping from your catalog if he’s willing to spring for a stamp.
MYTH: By accepting insert media from other marketers you’re giving them access to your customers and distracting buyers from your own brand.
Reality: To a degree, accepting package and catalog inserts does provide other companies access to your customers — but “it’s no different from renting your names,” Stanton says. And again, you can always refuse to accept inserts from competitors.
As to the inserts’ diverting customer attention from your own offerings, that concern kept Fleetwood, PA-based men’s clothier Paul Fredrick from accepting blow-ins for some time, says Allen Abbot, executive vice president/chief operating officer. The company already had a package insert program, but “with package inserts, you’ve already made the sale,” Abbott explains. Customers are reading catalog inserts before they’ve decided to buy something.
Nonetheless, Paul Fredrick tested catalog blow-ins two years ago. And after seeing no decline in response, the company decided to green-light a catalog blow-in program.
The next wave of insert media
Millard’s insert media division, AM/Direct, is trying to take insert media online. “Especially since some marketers are seeing 50% of their business already coming online, it’s a logical space to try to monetize the opportunity,” says AM/Direct vice president Jim Lynch. But, he admits, “there’s still some preconceived notions about branding online just as there is in packages.”
How might an electronic package insert program work? “We’re still in the development stages,” Lynch says. “But a customer finishing his transaction online could at a checkout page, for example, choose from three or four links from clients that have some sort of affinity to that marketer.”
For some multichannel merchants, online “insert” media pose a similar challenge as offline inserts: staying true to the brand. “Brand appropriateness is an ongoing concern in running these programs,” says Doug Brown, vice president of circulation for Boca Raton, FL-based women’s apparel cataloger Boston Proper. “Just because our customer might respond to an insert offer does not mean that it is worth the income to us. We want the Boston Proper customer’s complete experience with Boston Proper to positively reinforce what the brand means to them.”
For instance, even though the Boston Proper customer may be a good prospect for products like vacuum cleaners and acne solutions, “we don’t want the arrival of the catalog or their package to remind them of those things,” Brown says. “We want the catalog and the contents of their package to remind them that they are active, young, fashionable women with exciting interests.”
Insert media vehicles
New media vehicles continue to be developed, as marketers continue to seek new, more effective ways to reach target audiences. Here are the most common examples of insert media:
PACKAGE INSERT PROGRAMS
Package inserts give the advertiser a high degree of visibility, since the package containing a customer’s order is virtually guaranteed to be opened. Other benefits of package inserts are that the names are known and recent direct mail buyers and that riding within these packages carries an implied endorsement by the host company. For all these reasons, package insert programs enjoy a higher response rate and, therefore, command a higher cost per 1,000 (CPM) than most other insert media. Rate card prices for package inserts are generally $40/M-$80/M, with most falling in the $50/M-$60/M range.
By definition, these are mailings to an existing customer base generally offering them additional products or services. They might also be used as thank-yous or welcome letters. The most common format is for inclusion in a 6″ × 9″ or 9″ × 12″ envelope. This mailing also carries an implied endorsement from the host company. Typical rate card pricing is $40/M-$60/M.
Blow-ins are, well, “blown into” the catalog during printing (these are the small cards that tend to fly out of magazines and catalogs when they’re opened). Bind-ins are stitched into the binding or slid between staples of a catalog or magazine. Although bind-ins have a greater chance of staying inside the catalog as it goes through the mail stream, blow-ins tend to have better response. When designing a bind-in you need to be sure to allow for a binding edge. Rate card pricing is usually $30/M-$35/M.
Sample packs are usually hand-delivered for free to specific groups or markets. The contents contain samples, inserts, coupons, and other items targeting the particular group. Rate card pricing is usually $20/M-$40/M, although some less expensive opportunities exist.
Offers included in billing statements from banks, utilities, cable-TV companies, and other service providers carry a strong implied endorsement. The statements are usually mailed First Class in a #10 or smaller envelope. Because of postage rates, statement programs have strict weight limitations. While statement programs have virtually 100% “opening” power, the recipients are not necessarily mail order buyers. Rate card pricing is $25/M-$40/M.
Take-ones are the stacks of inserts held in slots or racks at areas with heavy consumer traffic, such as supermarket entrances or checkout counters. Distribution is heavily dependent on consumer traffic and the restocking arrangements of the distribution provider. Costs can vary from $5/M-$10/M or more.
As the name implies, this “deck” consists of similarly sized cards, usually 3-1/2″ × 5-1/2″ printed by the host and enclosed in a closed wrapping for shipment to a targeted audience. A card deck usually mails via bulk rate and does not guarantee a mail order buyer. This is a low-cost medium often chosen by b-to-b mailers for lead generation. Pricing of $20/M-$35/M usually includes printing.
Don’t miss the opportunity to get top visibility by running your ad on the back of a statement’s payment envelope or the collated envelope of a package insert program. Costs vary greatly between the statement envelopes (also known as bangtails) and collated envelopes.
Source: Stanton Direct