Insert Media: Not Just an Alternative

It wasn’t too long ago that insert media were viewed as the red-headed stepsister of prospecting tools. Most catalogers considered package inserts and statement stuffers as good for promoting low-end knickknacks and music clubs, perhaps, but not suitable for their goods.

Not anymore. “Interest in insert media has picked up over the years, and catalogers who even five years ago said they would never get into it are now active players,” says Jim Zuckermandel, president/CEO of Edmond, OK-based list services firm Zed Marketing Group and cochair of the Direct Marketing Association’s Insert Media Council. “As it’s growing, we’re hoping to get rid of the image of it being negative content.”

And don’t call card decks, blow-ins, and the like “alternative media” — unless you want a stern talking-to by Zuckermandel. “It’s no longer an ‘alternative,’” he says.

The reason for that is twofold, says Leon Henry, founder of the Hartsdale, NY-based list services firm that bears his name. Each time postal rates increase, more catalogers reconsider insert media as a marketing tool, since delivery costs tend to be far lower than that of mailing catalogs to rented names. Last January’s relatively modest postage hike and the more onerous one that’s expected to go into effect by the second half of 2007 have “a variety of advertisers examining the economic efficiencies of their methods of distribution,” says Henry.

What’s more, mailers see accepting catalog and package inserts as a chance to earn additional income. Once upscale merchants such as Omaha Steaks and The Sharper Image proved that they could carry inserts without tarnishing their brand, Henry adds, insert media gained wider acceptance.

A relative newcomer to insert media, Lexington, MA-based Vista Print has already found success with co-op programs, such as envelopes of coupons and other offers from multiple marketers. “We’ll target women that have had babies with half-price birth announcements or with thank-you notes,” says Ellen Sante, manager of print and alternative media for the online supplier of stationery and other printed products. “During the holiday season, we’ll use offers of half-off holiday cards.”

Vista Print is also using insert media to test two direct offers for new movers. One is for half-off change-of-address products, the other is for a free notepad. “It is a good way to figure out the appetite of the customer,” Sante says.

Until two years ago, Vista Print had relied solely on paid search, organic search, and e-mails for prospecting. But the company recognized that it had reached a point of saturation with those media.

“We’re exploring insert media because we think it can help grow brand awareness and drive customers to the Website,” Sante says. “Our rationale is that the last dollar we spend in paid search won’t perform as well as the first dollar we spend in a new channel such as insert media because there is a lot of low-hanging fruit here for us to pick, whereas we’ve picked what we can in the online space.”

For certain, insert media is becoming more popular. But before you can determine if you too can gain customers via inserts, it’s important to know what your options are.

Blow-ins and bind-ins

Gardening merchants have long accepted third-party blow-ins and bind-ins to their catalogs, Henry says. But now many gift and apparel merchants are accepting them as well.

The biggest advantage to prospecting via blow-ins and bind-ins, Zuckermandel says, is that you can typically reach hundreds of thousands or even millions of consumers.

“You also know when they are in the mail and can get a very good estimate of when they will reach consumers’ mailboxes,” he says. “They also can help you reach a target audience with definable demographics.”

They are also among the least expensive of the insert media; typical rental costs are $32/M-$38/M.

Package inserts

Rental costs for package inserts — promotional pieces that are included into the outbound package of an outside merchant — are higher than those of catalog inserts: They average $50/M-$60/M. One reason is that the recipient is in a sense prequalified; because he is receiving a mail order package, you know that he is a mail order buyer. Catalog inserts, in contrast, could conceivably be received by people who had never ordered from or requested the catalog in the first place.

Package inserts can also be larger than blow-ins and bind-ins. They can run as large as 5-1/2″ × 8-1/2″, with a maximum weight of 1/4 oz. As many as eight outside inserts will be included in a package.

Response rates will vary significantly depending on variables such as whether the insert is meant to generate a lead or sell an item, the size of the insert, and the type of merchandise being promoted. Two responses per 1,000 may be satisfactory if you are pitching big-ticket items, Henry says, while lead-generating campaigns with a strong affinity between the insert and the products being delivered should produce a 1%-3% response rate.

One drawback to keep in mind: Distribution schedules sometimes vary from projections, Zuckermandel says. If the list owner’s sales are down, it may take longer than expected to get all of your inserts distributed. Conversely, if sales are strong, you may complete your program ahead of time — though Zuckermandel says few advertisers complain about that.

Card decks

Sets of business reply cards — usually 3-1/2″ × 5-1/2″ — delivered in poly packs, card decks have traditionally been used by business-to-business merchants. But Henry notes that more consumer card decks have come onto the market. All told about 500 deck programs are available, in circulations of 50,000 to 1 million each. Rate card prices average $25/M- $35/M and include printing, though most decks will accept preprinted inserts at a higher cost per thousand. Some are also mailing in the larger 5-1/2″ × 7-1/2″ format.

Co-op mailings

Co-op mailings present a group of noncompetitive advertisers mailing to a common market. They can reach up to 40 million prospects in a single drop, can usually provide good geographic selectivity, and often offer demographic targeting as well, such as expecting mothers, new parents, and new movers. Most of them are available in a #10 envelope format, but some mail in a 6″ × 9″ envelope.

Responses generally are not as high as those of package inserts. But while they generate one of insert media’s lower response rates, they are also the least expensive option, averaging $15/M-$20/M.

Product sampling

Most people think of the goody bags given out at special events when they think of sampling. But product samples, coupons, and other offers can also be inserted into newspapers and mailings; they can also be distributed at stores, on college campuses, and among special-interest groups.

Some marketers, Henry says, try to qualify recipients by requiring them to spend a certain amount, purchase multiple products, or fill out a direct response vehicle before receiving their sample. So you could include a coupon as a bind-in or in a co-op mailing to generate a prequalified lead as the first step in a two-step prospecting program.

One downside to product sampling is that some samples are large and bulky and require hand insertion, rather than machine insertion. Then there’s the additional weight, which can drive costs up. “Weight can be the greatest problem,” Zuckermandel says, “and many general advertisers just don’t understand the significance of this in the direct response industry.”

Because of the issues of weight and manual insertion, costs can vary significantly. But Henry says a fair estimate is $25/M-$40/M.

Statement stuffers

Because statement stuffers are mailed with cable, utilities, or credit-card bills, the offers are highly likely to be seen. What’s more, there aren’t many other offers fighting for attention in the envelope. Mailers tend to limit the number of inserts they’ll accept to no more than two, as statements mail first class, and additional outside advertising would bump up their weight into the next postal class.

Response rates tend to be among the strongest for insert media, at an average price of about $50/M. And Zuckermandel says this segment is expanding, as more mailers are making these programs available.

Free-standing inserts (FSIs)

Faced with declining ad sales and coupon distribution, newspapers are making their FSI programs more accessible to direct marketers. In addition to being included in the Sunday newspapers, FSIs show up in supermarket “take-one” racks, order acknowledgements, and retail circulars. A great testing vehicle, Henry says, FSIs can reach millions each week and can frequently be bought as remnant space for less than $3/M for a half page. Advertisers can narrow down the recipients by county, though as Zuckermandel notes, you cannot target by demographics.

InfoUSA buys Rubin Response

InfoUSA bought another list firm on Nov. 10: Schaumburg, IL-based Rubin Response. But unlike its previous acquisitions, in which the individual companies remained intact, infoUSA plans to fold Rubin Response Services into its Walter Karl division, giving that list firm its own Midwest sales office.

InfoUSA’s chief financial officer Stormy Dean says that the approximately 30 Rubin Response employees would remain with the company, including vice president John Murphy, who will handle the day-to-day operations there. Judith Rubin-Zivic, who assumed the title of president of Rubin Response in January, will remain with the company as a consultant through mid-2007.

“Our stated goal is to continue to consolidate a fragmented industry,” Dean says. “This represents a smaller asset purchase for us, but it will be rolled up into Walter Karl.”

Bill and Arlene Rubin founded Rubin Response in 1974. Bill Rubin died in 2002; the firm went on the market shortly after Arlene Rubin died this past June. Rubin Response’s catalog clients include western apparel merchant Sheplers, food merchant Hickory Farms, and pet supplies retailer Doctors Foster & Smith.

Rubin Response is the third list company purchased by infoUSA in the past 12 months. InfoUSA bought Peterborough, NH-based Millard Group in November 2005 for $12 million. In May, infoUSA paid $6.6 million for Hackensack, NJ-based Mokrynskidirect. Terms of the Rubin Response deal have not been disclosed.

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