Changing Face of Inserts: A Retrospective
If we were looking beyond direct mail in our customer acquisition efforts, we considered "miscellaneous" media. The problem was finding a broker who was savvy enough to understand the ebb and flow of this medium and how to make it work effectively for the mailer.
Several years earlier, Len Holland, direct marketing manager at Popular Club Plan, figured out that one of the most profitable forms of advertising for a catalog house was the catalog's own insert in its outgoing packages. He reasoned that if this was the case then, perhaps, other inserts seeking a similar demographic to the Popular Club profile might be equally successful in those packages.
Holland left Popular Club and formed his own brokerage company to implement this concept ... getting direct marketers to accept non-competitive inserts in their outgoing packages. Not only had he started a new business, but also he created a new advertising medium.
The real problem was convincing the direct marketers, who were shipping products to their customers, to accept non-competitive inserts in their packages. In the absence of the range of insert programs now on the market, our choices in 1964 were quite limited. We were limited to a handful of package insert programs as well as such non-direct response driven vehicles as ads on egg and milk cartons, inserts in or ads on supermarket bags and direct response advertising on the pages of magazines and newspaper tabloids.
Since then, the number of insert media opportunities has skyrocketed - and so have the number of insert media brokers. Given its expansion into so many types of programs, it's no wonder that insert media has become one of the fastest growing vehicles in direct marketing.
In addition to the problem of getting direct marketers to allow other mailer's inserts in their outgoing packages, there was another issue facing brokers in the 1960s. The major mailers at the time grew up on direct mail. Their marketing and promotional efforts were geared toward mail. The concept of "recency," "frequency" and "monetary" was applied to each list considered for testing. The question was how do you apply this standard to insert media?
Well, you could, but not in the same way that it worked for list rentals. Consequently, there were few insert users. I often heard mailers say insert media was not "sexy" enough for them to even test. The few brokers in those days often wore two hats - one for lists and one for inserts. Many were timid about encouraging their clients to test inserts.
Over time, problems in the list industry began to surface. Perhaps the most significant and the one that started mailers seeking alternatives to the high cost of direct mail was the frequent postage increases. This and a shrinking list universe opened the doors for the acceptance of another media vehicle - the use of inserts as a cost-effective way to develop new customers.
About four years before opening my own office in 1981, I accepted the position of vice president of direct marketing at Berkey Film Processing. Though this was essentially a retail operation, my experience there would form the basis for whatever future success I was to experience in the direct marketing industry.
First, it was my introduction to inserts as a major medium. Berkey had a 29-cent lead-in offer, and we needed inexpensive programs to make it work and generate new customers. Direct mail was out of the question. It was too expensive. So, I had to quickly familiarize myself with the world of package inserts.
As a mailer, I learned the true value of working with a specialist in this arena. I cannot emphasize the importance of finding the right person to guide new mailers into the world of insert media. It often spells the difference between success and failure.
In addition to working with the right specialist, my position at Berkey required me to think like a marketer. If there is one piece of advice that I would pass along to every broker in the industry today it is to think like a marketer.
Too many brokers act as order takers when they should really take a more proactive approach in helping their clients seek out the best opportunities for growth. This requires them to put on their marketing hats and try to understand the inherent nature of the product being offered and how to reach the maximum universe.
Now, armed with knowledge of inserts and thinking like a marketer, I opened Fred Singer Direct Marketing ... operating out of my home. Remember, it's only 1981. There were no fax machines, very few companies had computers and e-mail had not been created. Orders were typed on word processors or typewriters. The program managers mailed data cards regularly, and there was no online service to allow brokers to research the best programs for their clients.
We used publications like Standard Rates & Data, a listing of most of the available programs. Updates were published quarterly. Putting together media presentations required detailed work by typists on staff.
One of the biggest problems we faced early on was finding mailers that were interested in testing insert media. An equally difficult task was finding enough package insert programs to accept non-competitive inserts from other mailers.
The major programs of the time were Fingerhut PIP, Beacon Photo RAL, Spencer Gifts PIP, Sunset House PIP, Gift Pax Hospital, Especially for Mother and SAVE. From a mailer's standpoint, one of the prime benefits of these programs was that each package contained only four or five inserts, thus providing a better opportunity for your offer to be seen, read and hopefully acted upon.
Eventually, the world of insert media expanded into billing statements, co-op mailings and ride-along offerings. It was fascinating to see how creative this facet of the direct marketing industry became. If an owner had any mailed communication with its customers that became fertile ground for the inclusion of inserts. Gradually, the volume of available programs increased - the most prominent being catalog blow-in programs.
"Miscellaneous" media began with a crawl. As mailers started seeking greater universes and more cost-effective ways to reach potential customers, they gradually started to pay more attention to what was now being called "alternate" or "alternative" media. The mailers who were testing selected only those programs that matched the demographic profile of their targeted audience to a tee.
Here's where the savvy insert brokers began to seek greener pastures for this potentially powerful medium. It was the mid-1980s and the number of brokers both specializing in and opening alternative media divisions within their offices began to increase.
As an aside, the owner largely managed these package insert programs internally. There were very few outside management opportunities for the insert community. It was when the programs became too big and the competition for participation in each program too intense that owners realized their best efforts would be better served by using outside managers.
Rapid growth was starting to take place. First, these insert programs worked. It became a real cost-effective means of developing new customers. Now the mailers were hungry for more insert opportunities. Armed with this knowledge, the smart brokers saw possibilities for their clients in non-vertical media. Carol Wright, Money Mailer and Val-Pak burst onto the scene and became viable sources for insert placement. The Carol Wright co-op mailing reached 20 million potential customers each month.
One of my first two clients, Grolier Enterprises (now Scholastic At Home) was already using insert media but primarily with vertical programs, e.g. the new mother co-ops and hospital packs. When I suggested that they branch out into non-vertical media e.g. Fingerhut, Columbia House and Artistic Greetings, to name a few, they were skeptical at first. But to their credit, they realized that testing these programs represented only a small investment. For the most part, these programs worked for various reasons and soon became a major staple of their insert campaigns.
Further accelerating the growth of insert media came in the 1990s when successful mailers started using multiple inserts in the same package. The aforementioned Grolier and Franklin Mint began placing several different offers in the same packages and co-op mailings. They were able to negotiate lower rates for the second and third inserts, making the programs pay out.
But, perhaps, the biggest boost to this medium came in the last five years - inserts in catalogs being mailed to house files and prospect lists. Millions of catalogs are mailed monthly to targeted lists, and this has become a very profitable vehicle for insert users.
The question I am frequently asked is whether the biggest growth of insert media is behind us or is the best yet to come. We are seeing some very exciting new opportunities within our own company, so I remain optimistic that the future of insert media remains in front of us. With the number of bright, young industry professionals I meet regularly, I am sure their creative juices will seek out new opportunities in this arena.
When I look back over the years, there are five major lessons I have learned that I constantly impart to my staff:
· You must understand the P&L of each of your clients. Whether you are a marketer or a vendor, get a solid grasp of the factors that comprise your client's P&L statement. Understand the numbers from both a historical and futuristic perspective. In other words, try to answer the question, "What can we expect from our next major media campaign?"
· Know the people you're dealing with and respect them and what they do. Maximization of relationships will help you move in the right direction.
· Service, service and more service! Always give your clients more than they expect. If you are a broker/agency, do more than just book the media. Assist the mailer with the creative and design of the insert. Find more cost-effective printers and seek out other companies who may have similar challenges and learn what they did to overcome some of these and other obstacles.
· Don't accept unsuccessful test results without a detailed analysis. Discuss the matter with your client and try to understand what went wrong and why. Don't give it up. We have found, in a number of instances, that initial failures have subsequently turned into significant successes.
· Help people, where possible, in seeking job opportunities. I'm proud of the results achieved from the time and effort I spent in aiding others to find good positions at reputable companies. This has given me great satisfaction.