The Circulator -- October 20th, 2004
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| October 20, 2004 | |||||||||||||||
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TABLE OF CONTENTS Industry News: No Data Equals No Direct Marketing Bad News on Third Quarter Audit Reports Third Party Email Ruling in U.K. Trend Features: Digital Magazines Decrease Circ Costs Lines Begin to Blur in Multi-Channel Marketing News Briefs Newly Available Lists
Industry News:No Data Equals No Direct Marketing By Meghan Hamill
Addressing direct marketer's concerns at the DMA's 87th Annual Conference and Exhibition in New Orleans on Monday, the DMA president and CEO, John A. Greco Jr. covered issues such as privacy, legislative reform, the environment, remote sales tax and SPAM.
This year Congress is not expected to pass any major privacy bills that would impact direct-response marketing Greco stated, but the DMA expects Congress next year "to take a hard look at our industry, in particular, our list and online practices."
"There's been some action...in the area of lists that has us concerned," said Greco. "As you may recall, in August, the agency announced settlements with some list management and brokerage companies. However, the implications of those settlements are unclear.
"We will continue working with our members--including the members of our List Leaders Group and List & Database Council--as well as FTC regulators to make sure this is resolved in the industry's best interest."
"I�ll state the obvious, Greco continued, "This is a huge issue with very serious long-term implications for an industry that is fueled by data. In short, no marketing data basically means no direct marketing industry. It�s just about that simple," he said.
Greco urged marketers to look around, take stock, and make absolutely certain that your organization's data usage and security policies are nothing less than pristine.
Marketers must "tell consumers, over and over again, that their choices and preferences matter to us. And we've got to give them effective options to express themselves--options that are easy to find, easy to understand, and easy to use," he said.
The DMA and its affiliates--the Association for Interactive Marketing and the Internet Alliance--are working diligently to solve the problem of SPAM, he said. "Our multi-pronged approach includes legislation, technology, industry self-regulation, consumer education, and dogged law enforcement of current consumer protection laws like the CAN-SPAM Act, which we helped get passed last year." Bad News on Third Quarter Audit Reports By Kristina Joukhadar
According to Dan Capell's October Circulation Report, 20% of the 136 ABC members whose annual Audit Reports were released during the third quarter of this year did not make their promised rate base. This number is double the 10% who missed rate base in the third quarter of 2003.
In addition, 20% of the audited titles had bulk circulation in excess of 10%. These publications include: Sound & Vision, at 36%; Business Week International, at 38%; Connecticut, at 56%; Mira!, at 77%; and People En Espanol, at 47%.
Third Party Email Ruling in U.K. By Kristina Joukhadar
The Advertising Standards Authority of the U.K. has issued a ruling against an online DVD rental company, Moviechoices.com, for sending marketing emails to a purchased list where the customers had not specifically opted in to receive email solicitations from third party companies.
Moviechoices.com, a division of U.K.-based Home Entertainment Corporation, had purchased a marketing database of 216,000 customer email addresses from a liquidated company. The customers on the list had consented to receive email from the list seller, and Moviechoices believed they had also opted in to third-party communications. In fact, they had a contract that verified this.
The ASA became involved when a recipient of the Moviechoices.com promotion complained, arguing that although the liquidated company did have the right to send him email, he had not given them permission to pass his name on to a third party. The ASA upheld his complaint.
Trend FeaturesDo Digital Magazines Decrease Circ Costs? By Meghan Hamill
If digital magazines are the wave of the future--why aren't more publishers riding that wave? Out of an estimated 17,000 magazines on the market, only 250 offer digital editions. That is 245 more than 3 years ago.
What are the circulation benefits of a digital magazine?
What holds circulators back? In an interview with The Circulator, Ted Bahr, president of BZ Media which publishes the digital and print version of the newspaper SD Times, explained that circulators may not try digital distribution because of ignorance, skepticism, fear, uncertainty and doubt.
Bahr continued to say that publishers and circulators think they have a competitive advantage with advertisers by maintaining a 100% print status vs. competitors who have a portion of their of circulation in digital. Also if, no one else in their market segment has digital circulation, may be they are afraid to be the first ones in.
"Printing and postage for a printed copy of SD Times, which has more than 51,000 subscribers, is approximately 65 cents per copy. By creating an identical digital version with commonly available Adobe PDF software (with out proprietary add-ons or third party vendors), our cost is about 4 cents per copy, including an internal labor calculation," says Bahr.
What do you have to lose? "The only upfront cost lies in converting the magazine from print into the digital format. Then you test by offering the digital version as a 6-month free sample," says Patrick Kenny, executive VP of qMags.com, a vendor of digital editions including NASA Tech Briefs and Popular Mechanics. "If it doesn't work out, then you haven't lost out like you would in launching a print magazine."
Viable international market? It varies depending on the publication, but NXTbook Media--an application service provider that converts print products into digital format--recorded a print- to-digital conversion rate averaging about 50%.
Broadcast Engineering actually converted 70% from print to digital and BE Magazine (an in-house custom trade publishing magazine) has converted 50% from print to digital. Cadalyst had over 60,000 controlled circ and moved 10,000 to digital over a 9-month period. Their conversion numbers keep increasing, says Jeff Martin, director business services, NXTbook Media.
"Digital doesn't replace print. It is a hybrid solution and a complement to print that increases distribution," says Martin. "If publishers are successful at marketing the digital magazine to print subscribers they can save money, gain advertising sponsorship and increase their multi-media capabilities--all generating more cash flow."
Lines Begin to Blur in Multi-Channel Marketing By Kristina Joukhadar
The Direct Marketing Association recently released the DMA 2004 Response Rate Report. The report is the second of its kind, and offers a comparison with the 2003 report's statistics. It focuses on direct marketing response rates across all industries, of which the publishing industry is just one small part.
A story published earlier this week, "DMA Study Asserts Telemarketing Yields Greater ROI than email," highlighted the part of the report that compared the ratios of average cost per contact to average revenue for telemarketing and email marketing across all industries. Those numbers give a return on investment index of 18.2 for telemarketing and an ROI index of 16 for email marketing.
Concern was expressed over the fact that this appears to be a reversal of the statistics from last year's study--where email was reported to be more cost effective than telemarketing--and also appears to fly in the face of common industry belief in the power of email marketing. But if we look a little deeper at the numbers, the report also says the following:
1. Telephone: While telephone remained the highest responding medium in the survey, telephone response rates fell considerably year on year, from 7.41% in 2003 to this year's 5.45%. The reported campaign volume was down, too, from 89 to 63 campaigns (most likely due to the new do-not-call laws).
2. Email: Like 2003, most industries surveyed used email in their direct marketing mix. This year, the average overall response rate for email campaigns was up a bit at 2.31% from 1.88% in 2003...Industries that have more experience and more campaigns with the medium are using it to good advantage: professional services, with 14 campaigns and a 4.35% response; entertainment and recreation, with 8 campaigns and 3.92%; and financial products and services, with 12 campaigns and 3.73%.
3. In terms of channels of customer response...Web site purchasers increased from 8.1% last year to 18.1% this year, whereas orders by telephone stayed almost level with last year at 16.7%, and email and mail shared an equal 15.3% of orders.
News BriefsNutrition Press Bought by Blackwell Publishing Blackwell Publishing has acquired Food and Nutrition Press for an undisclosed amount adding 11 journal titles and more than 50 books to its food science list. As part of the agreement, Blackwell will now publish Foodservice Research International, Journal of Food Biochemistry and Journal of Food Process Engineering, among other titles.
"Blackwell Publishing has invested heavily in food science and technology over the last few years, and this represents a major step towards our goal to be the leading publisher in this area," Gordon Tibbitts, Blackwell�s U.S. president, said in a statement.
Digital Magazine that Pleases Advertisers In order to maximize advertiser's results and to be more innovative and efficient, CMP, a trade magazine, is converting 30,000 print subscribers to its CADence magazine for CAD users to PDF, cutting its print subscription total from 80,000 to 50,000.
The digital edition will enable widespread distribution in an interactive format with trackable Web links throughout both editorial and advertising. Advertisements in the CADence print edition are included in the digital edition at no additional cost to advertisers.
Financing is on the Radar for Pop Culture Mag Radar, a celebrity and pop culture magazine focusing on young, urban readers ended their search for financing when Mortimer B. Zuckerman, the owner of The Daily News, and Jeffrey Epstein, a Wall Street financier, agreed to finance the magazine.
Radar published two test issues last year and the first issue under new ownership will appear next April. Issues are to follow every other month for the rest of the year before the magazine moves to a monthly schedule in 2006.
With a relatively small circulation--executives expect to sell 125,000 copies per issue next year--growing to 175,000 in 2006.
Heidi Silverstein Named Associate Publisher, Redbook Heidi Eckman Silverstein has been named associate publisher of marketing at Redbook. Silverstein most recently served as director of special projects for the Hearst Group where she developed multi-title, cross platform marketing programs for all Hearst magazines.
Prior to that, Silverstein was associate publisher, marketing at Country Living and then O, The Oprah Magazine.
NEWLY AVAILABLE LISTSCable TV Cooking Show Enthusiasts (2.3 million names, $85/M) Includes individuals responded to TV infomercial offers for kitchen gadgets, appliances and equipment. Other records come from online product registrations. Selects by age, credit cards, dwelling type, gender, homeowner, income, length of residence, lifestyle, marital status, monthly hotline, state/SCF/zip. Contact: Media Source Solutions Inc. (561) 241-3003
Community Arts Resources (60,000 names, $93/M) A postal list of subscribers and ticket buyers from Los Angeles-based Community Arts Resources (CAR). The source is direct response. Selects by gender, gay, ethnic, avant-garde, artists and arts, state/SCF/zip. Contact: MKTG Services (215) 968-5020
For Him Magazine (FHM) (816,984 names, $100/M) Data from InfoBase has been overlaid on the For Him Magazine (FHM) file to create enhanced list segments. The FHM Lifelines file has been overlaid with ethnic and religious data. Selects by hotlines, areas of interest, ethnicity/religion, gender, income, mail order, state/SCF/zip. Contact: Direct Media Inc. (203) 532-2347
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