Reader's Digest to End Sweepstakes Entirely

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The Reader's Digest Association Inc. will eliminate the use of sweepstakes promotions for its flagship magazine and establish a new rate base of 10 million copies for five years beginning in January as part of a circulation plan announced yesterday.

The magazine will reduce its current rate base from 11 million to 10 million and reach an estimated 40 million U.S. readers. Reader's Digest's rate base last year was 12 million.

"When we took the circulation down from 12 million to 11 million copies, our profitability in the direct-to-publisher acquisition effort improved by 35 percent, and we think we will have a similar improvement when we make this move," Reader's Digest spokesman Bill Adler said.

Eric Schrier, president of RD North America, said the plan culminates a four-year move away from sweepstakes.

"Based on current trends and analysis, we are confident we can sustain our circulation rate base of 10 million for at least five years," he said, "and at the same time provide an even higher quality audience mix to advertisers at lower costs to the company."

Alternatives to sweepstakes promotions include direct mail, package inserts, telemarketing and the Web. New sources of subscribers include customers from Reiman Publications, which the company acquired in 2002. Since its acquisition, Reiman has provided about 250,000 new subscriptions to Reader's Digest magazine.

Reader's Digest, Pleasantville, NY, also will continue to move some of its mature readers to its Large Print edition. Reader's Digest Large Print and Selecciones, the Reader's Digest edition for U.S. Hispanics, both have been growing in circulation by double digits annually. The three U.S. editions have a combined circulation of nearly 12 million copies, reaching 47 million readers monthly.

The magazine also has expanded its brand presence through a new series of one-time publications, RD Specials, sold in major retail chains, as well as through the recent rollout of the Reader's Digest National Word Power Challenge in school systems nationwide.

As part of ongoing testing, Reader's Digest will periodically conduct offline and online sweepstakes marketing tests. Third-party agents may still make limited use of sweepstakes.

Reader's Digest will continue to use sweepstakes in other divisions, such as its U.S. Books and Home Entertainment division, though "we are diversifying there as well," Adler said. He also said sweepstakes remain a part of the business for all overseas products, including Reader's Digest magazine overseas.


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