Inserts expand despite perceived threats

As more marketers move away from print, favoring tactics such as online billing and statements, the insert media marketplace may seem threatened. However, experts say emerging media sources help the channel

Rob Stanton
VP of business development, Stanton Direct Marketing

Since the economic downturn, companies that have a mail resource to leverage are more receptive to including outside advertising in their mail distribution. For those with a large resource, the revenue stream is too attractive to ignore.

For other companies, the resource might be there, but the projected income from advertising partnerships is not attractive enough. For these mail owners, revenue potential can increase only if the value of the channel becomes greater for the advertiser. Insert media’s proposition for boosting this value relies on the increasing connectedness between offline and online campaigns because of the use of mobile technologies like augmented reality, barcode scanning and visual targeting.

These technologies foster immediate access to information, and smartphone users are quickly embracing these applications to access and retain data. For an advertiser, these technologies also provide the analytic services necessary to track offline campaigns.

The insert media industry is strictly associated with distribution through statement mailings and customer order shipments. However, insert media should actually be identified with any existing distribution vehicle that can carry an advertising message. This aspect of the industry is downplayed and underdeveloped.

Media-integrating technologies bring a breath of new life to this segment in particular. Everyday objects, such as disposable coffee cups, pizza boxes or dry-cleaning hangers, can turn into an interactive experience for marketers and consumers.

Let’s face it, print can be viewed and processed quickly, distributed easily and, because it is tactile, build credibility. It does a better job of reaching customers by getting in front of them, instead of waiting for them to find out about the brand. In an environment where electronic media has transformed the way consumers shop and access information, print media’s strengths are too powerful to discount from any marketing mix. If print can deliver more than meets the eye, insert media will assume an entirely new level of purpose.

The Takeaway
Emerging technologies keep print inserts relevant in a Web-based world

Leon Henry
Chairman and CEO, Leon Henry Inc.

If you look at the statistics, the emergence of online billing hasn’t affected the insert media market too much. There are more than 350 statement and invoice insert programs listed in our database. These programs are represented by more than 30 managers. There has been a steady increase in the number of statement or invoice programs offered on the market, with the number of programs nearly tripling since 2004. Pricing per thousand inserts distributed has remained about the same.

There are a few reasons why this is the case. Marketplace penetration has historically been low, which provides excellent opportunities for expansion. Large volume programs are still very rare and many categories remain underused.

In addition, mailers using statement inserts are looking for volume and assurance of delivery. It’s rare to see a consumer throw out a utility bill or bank statement without opening it. All this is good news for potential insert programs and the mailers wishing to use them.

The light at the end of the tunnel is the increase in the number of insert media programs in the package insert category, primarily from online companies. One recent example is Shutterfly, which sends more than 6 million packages of online-purchased photo prints per year. With an increase in the number of insert programs, there will continue to be price sensitivity, which is advantageous to the mailers using the medium.

Recent studies show that only about a quarter of direct mail companies use inserts as one of their media choices. This leads one to believe that there is a bright future for insert programs. They don’t have to be exclusively in the statement or invoice category. Only time will tell.

The Takeaway
Untapped sources of insert media remain, offsetting losses elsewhere

Jim Kabakow
Chairman and CEO, Media Horizons

Like any media channel, insert and alternate media are faced with both challenges and opportunities in the current marketing landscape. A key challenge continues to be smaller universes in some of the core direct marketing-sold channels that have historically provided large-scale audiences for insert marketers. For example, as airline and travel venues move to Web-based frequent traveler statements, the opportunity to reach these rewards customers through mailed statements has decreased.

The emerging opportunities for insert and alternate media trend towards areas that deliver more audience selection and targeting capabilities than those that were previously available. This has generally involved the use of increasingly sophisticated technology applied to the alternate media channel, increasing targeting capabilities while still maintaining the cost efficiencies associated with insert and alternate media.

One specific example of an alternate media channel using demographic and transaction data is “outserts,” the generic name for ads delivered on the outside of merchandise shipments or periodicals. We work with a company called Zadspace to offer outserts to our clients.

Zadspace’s technology analyzes purchase history (based on items purchased and shipped) and demographic data (such as geography, age, gender and income) in real time to generate a targeted promotion affixed to the outside of a merchandise shipment. Resulting outserts can be personalized on the individual level as well, and are the first message seen when a merchandise package is delivered to a recipient. Marketers we have worked with on outsert programs include sellers of collectibles, subscriptions, insurance and home services. These marketers often cannot run traditional inserts due to lack of geographic or other targeting criteria. Others in the same position might find this a productive channel.

Other insert and alternate media programs offering similar capabilities will continue to emerge in the marketplace, marrying the best aspects of targeted and mass media into a single delivery platform.

The Takeaway
Outserts are an outgrowth of inserts offering robust targeting capabilities

Mike Zuckermandel
VP, Zed Marketing

With companies moving towards paperless initiatives and postage costs continuing to soar, marketers might think there is a trend of moving away from insert media.

However, we’ve seen the trend go in the opposite direction in the past few years. As insert media marketers, we all need to find creative ways to generate more revenue for clients. The greatest challenge remains finding new advertisers to understand the huge benefits of the medium.

We can all agree the past two years have been very challenging for almost all marketers, leaving a large open door for insert media. While program owners struggle to offset the drop in orders, lower average sales and increasing costs, managers can still help the program owners offset those costs by encouraging them to accept third-party inserts.

We’ve seen a large number of Internet-based companies open up insert programs of late. Most recently, companies like Foot Locker and Shutterfly have started offering package inserts. Some companies do not have their lists on the market, therefore making their insert programs the only way for third-party mailers to reach their customer base.

Over the past 10 years, the marketplace has changed dramatically. However, even if traditional print catalogs go away, there will always be customers ordering through the mail and receiving packages. Even as invoices go paperless, for example, they are still e-mailed — and there are opportunities to sell third-party advertising on those messages. Response rates are a concern on anything electronic, but they also benefit from tracking ability.

We, the insert media community, need to step up, carve out our niche and stop fearing what will happen in the next 10 years. Instead, we should live for today and the abundant opportunities that exist despite changes in the market.

The Takeaway
Insert programs offer opportunities for marketers despite the move to the Web

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