New to market: Brokers share growth strategies
In the face of changing postal requirements and booming online retail, how is the insert media industry ensuring it holds its own in terms of new growth?
Does each firm approach this problem in the same way? Not quite. Media Horizons Management, for instance, is focused on developing non-traditional insert media channels.
"We have our eye on specific categories -- business, e-commerce, for example -- that we believe will be the next wave of insert programs that have an impact on our industry," said Walter Chistoni Jr., vice president at Media Horizons Management, Norwalk, CT. "When pitching a new program, our approach is simple -- increase profitability to the owner."
Leon Henry, chairman/CEO of Leon Henry Inc., Hartsdale, NY, said it was common sense to cultivate new programs.
"Our particular approach has been to try to enlarge the industry, figuring that we will obtain a percentage of the new insert programs," he said.
At Stanton Direct Marketing, Elmira, NY, the way to attract new program owners is to make program management easy for the owner.
"We tell the owner he or she can be as active as they wish," said Al Stanton, president of Stanton. "In fact, we have only three requirements: review and approve clearances in a timely fashion; assign an internal production coordinator or warehouse person to keep us updated on program distribution status; and cash revenue checks we send them."New program growth by channel
According to Media Horizon's Mr. Chistoni, blow-ins is his company's fastest growing insert channel, both in terms of more programs on the market and more advertisers using it.
"The reason is simply volume," he said. "Advertisers like the rollout potential, and catalogers like the revenue blow-ins provide, especially if it can help offset the incremental postage charges that will go into effect."
According to Mr. Chistoni, the biggest challenge advertisers using blow-ins face is conforming to spec.
"Most blow-ins need to be much smaller than a PIP insert and the weight of the piece has a major impact in the overall cost, so creating a piece that gets your message across and meets the catalog spec is the toughest part," he said.
Package insert programs are still king at Leon Henry, according to Eric Kizis, registrar for the database management and new business development divisions. He said this was due to the greater weight restrictions on blow-ins, ride-alongs and statements.
Mr. Stanton said the growth of ride-alongs and PIPs has been fairly equal at his company.
He warned against assuming that an insert channel might say it all for the program.
"The target audience is the crucial factor, not the insert media type," Mr. Stanton said. "There are instances where an insert media type is not named correctly, and the properties that the marketer was seeking to match may not exist in that program."New versus old
Mr. Kizis said Leon Henry often sees new program growth from owners who have one insert vehicle program already on the market and then decide to open up another.
"In general, the number of insert programs is growing, but often these new programs don't last very long," he said. "Probably because owners expect instant success, which is generally not the case with insert programs. It takes time for programs to grow. The old tried-and-true programs seem to stand the test of time."
In fact, there is often concern from marketers when a program is new.
"You'll always get the 'Who has done it before?' question," Mr. Chistoni said. "And when the answer to that is 'No one,' most advertisers balk at testing. I think a healthy percentage of new to old, or as I would refer to them, proven insert programs, is 20 to 80."
Mr. Stanton said that an important factor in getting marketer confidence for new programs was accurate demographics.
"The program manager must be upfront in providing information regarding the people who receive the distribution the marketer is testing," he said. "The program manager wants to sell space in the program. Most program managers want long-term relationships with the marketers and will provide accurate information from which the marketer can make testing decisions."