How inserts are faring in a changing catalog world

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The recent increase in Standard mail rates has catalogers scrambling to cut costs to make up the difference. The question is, how has the rate hike affected the insert industry?

Catalogers have traditionally - and to a large extent - played the role of program manager in the insert world. Whether it's a bind-in, blow-in or package-insert program, when a catalog puts an opportunity on the market, advertisers gain the ability to reach proven mail-order buyers who in many cases are not only responsive to being solicited at home, but are also already segmented in their interests, purchasing potential and retail categories.

Therefore, a change to these mailers' plans - be it an adjustment in page trim, size or binding, a circulation drop or different geographical targeting - can affect the program.

Many in the insert community would champion these postal increases as a boon. And certainly there is potential for growth as more catalogers and direct mailers, such as banks and online retailers, look to open their universes up to insert media as a way to cushion the blow of the rates.

In addition, many direct mail advertisers are turning to inserts to push their products to save on stamp price and pay a lower cost-per-thousand (CPM) rate. Catalogers are using inserts, particularly for prospecting.

Catalogers, as their role switches from buyer to seller, must navigate product versus offer versus space on every insert they plan to send. In other words, catalogers must entice the right consumer with the right mix of merchandise and fit the offer into the size and paper type that meets the standards of the program owner.

As the industry juggles what is the latest in a series of Standard mail increases, it also contends with the prevalence of e-commerce, the rise of digital-print technology and the customization that brings along with the increasing demands of relevancy from the consumer - all which up the ante of expectation for the performance of the insert.

What catalogers are doing

"There is quite a bit of activity from catalogers and merchandisers using insert and print media," says Dennis Erickson, VP of insert and print media at direct marketing company ParadyszMatera, Minneapolis, MN. "Catalogers are testing solo product offers, drive to Web, as well as mini-catalogs as insert vehicles."

Paul Fredrick Menstyle, a men's clothing cataloger, acts as a program owner and marketer. The company opens its reach of about 14 million catalog recipients to other marketers as well as its outgoing package universe with Millard Group as the program manager. In return, it invests in other catalogers' package-insert programs and blow-ins, at times negotiating barter exchanges. It also runs bind-in ads in high-end men's magazines. ParadyszMatera brokers the media buys for Paul Fredrick and helped the company in its initial launch into the media in 2002.

Postal rates are not a large concern for Paul Fredrick. The cataloger has seen a shift to more online buyers, but catalogs still account for at least half of its sales, according to Scott Drayer, director of marketing at Paul Fredrick Menstyle.

The company's most successful piece, an introductory pricing offer on white shirts, has not had any problems.

"I've not seen much of a change, as far as weight restrictions go," says Drayer. "Most of the programs that we were running required a fairly light piece to begin with. That has not affected our piece."

The company takes a very by-the-numbers approach to media allocation.

"We're trying to base all of our prospecting programs on lifetime value," Drayer says. "We're got a fairly good idea of what we can spend to acquire a customer and we've really tried to base our strategy off that and allocate to the various media on a line-by-line basis."

Rise of the mini mag

While its current insert is working well, Paul Fredrick Menstyle may consider a mini mag for the holiday season to use in packages.

The mini mag, or mini catalog, is a good option for catalogers looking to reduce their mailing weights. The mini catalog, inserted into outgoing customer shipments of merchandise or tucked in the folds of a newspaper, is usually a simple, 9-by-6-inch, 16-page (eight-pages, two-sided) piece that weighs 0.4 ounces.

At this weight they fall into the standard "overweight" category for insert programs where the maximum weight is 0.25 ounces. In newspapers, a different, lighter mini catalog format can be inserted: a four- to 12-page freestanding insert or six-page die-cut flier or eight-page glued spine. This size avoids hefty upcharges and/or hand-insertion charges.

Paulette Kranjac, a direct marketing veteran and president/CEO of List Process Co. Inc., says her company is one of the first to have used the mini catalog.

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