Alternative Print Media:
The low cost route to prospecting

by George Duncan

Rising printing and paper costs, increased postage, skyrocketing list rental rates. Is there any way around these constantly increasing costs?

For business-to-business lead generating and even consumer prospecting, the answer increasingly is "Alternative Print Media," one of direct marketing's surprising little secrets. Alternative Print Media consists mostly of package inserts and card decks, but also includes ride-alongs, co-op mailings, statement stuffers, sampling, catalog bind-ins/blow-ins and few others.

Especially useful for startups with limited marketing budgets, I have seen some of these media used almost exclusively by magazines, manufacturers, distributors and others, usually in cases where the marketing niche is very specialized and hard to reach through more traditional media.

A Specialized Media Group

Because this is such a specialized media grouping, with its own unique dynamics and requirements, I called upon the champion of alternative print media, Leon Henry, for help in understanding the variety of opportunities available today. Leon has generously provided access to his web site and other published materials for this article.

In the last thirty years, the number of insert programs has risen dramatically, along with the variety of options being offered to mailers.

Package Inserts:

These are free standing promotional pieces delivered to a mail order customer via their fulfillment package, i.e. the insert is delivered to you in a box containing a shirt you ordered from a catalog. Naturally the product shipment types vary dramatically: catalog generated vs. space generated, continuity or club oriented, business-to-business vs. consumer. Correspondingly, the responses to the outside insert will also vary (see below).

With more than 1000 package insert programs (PIPs) to choose from, the universe approaches half a billion and includes distributors like Hanover House and Fingerhut. There are also scores of distributors and specialty companies.

Card Decks:

This vehicle usually consists of 20 or more 3-1/2 x 5-1/2" business reply cards delivered in poly packs. Rate card prices average $25/M - $30/M and include printing from film. Mostly business-to-business, more consumer card decks have come onto the market in recent months. Currently, some 750 decks are available in approximate circulations of 100M - 1MM each. Most decks will accept pre-printed inserts at a higher cost per thousand. Many are also mailing in a larger format, 5-1/2 x 7-1/2" that are more pre-print friendly.

Ride-Alongs:

In this instance a company mails a catalog, circular or announcement to its customer base and allows outside advertising to ride along. An advertiser can count on this method of distribution since the company doing the mailing has a vested interest in getting out their own promotional pieces.

Companies like music marketers Columbia House and BMG dominate this category and offer regular mailings in blocks of 2MM-6MM to their club members. Advertiser's response from this category is strong - comparable to package inserts. Average prices range from $40/M - $60/M. Outside inserts are from 4-6 per mailing. Response curves are similar to direct mail.

Co-op Mailings:

This category, by definition, presents a group of non-competitive advertisers mailing to a common market.

Carol Wright is typical, including both mail order and direct response offers along with package goods participants (coupons on brand items). Co-ops represent large numbers (up to 40MM) in a single drop, can usually provide demographic selectivity and often provide demographic selections. Although responses are not as high as those generally received from packages, co-ops are priced more competitively, at an average of $15/M.

Other types of co-ops also exist which include mail order and direct response offers, but instead of the package goods coupons, local coupons are included (i.e. station, etc.). These programs are usually sold on a local level by neighborhood franchises. Good examples include Val Pak and Money Mailer. Most of them are available in a #10 envelope format, but some mail in a 6 x 9" envelope. Circulation exceeds 50MM/quarter.

Statement Stuffers:

These mailings include invoices and statements generated by cable TV companies, utilities, credit cards, magazines, clubs, continuity programs, retailers, businesses and so on. They are usually distributed in small envelopes so your insert needs to be no larger than 3-1/2 x 6-1/2" to fit. Outside inserts are generally limited to 3 since statements get mailed first class (high percentage of deliverability) and additional outside advertising would bump them into the next postal class. Response tends to be strong. The average price is running $45/M.

Sampling:

This method of insertion offers a variety of "goody bags" distributed free to specific markets, i.e. college students, new mothers and other special interest groups. Inserts accompany product samples and coupons. Packages are usually given out "free" in high traffic situations.

Pricing ranges from $25/M - $40/M. Shelf life can be difficult to pin-point.

Catalog Bind-Ins/Blow-Ins:

This distribution has been used in big numbers for years by the horticultural set (i.e. a magazine subscription offer or a lead generator for a lawn tool product is bound into a catalog). Many catalogs are now beginning to offer blow-in space, traditional advertising space, and business reply card (printed 3-up to make a page) space in their catalogs to further serve the direct response advertiser. Blow-ins can run as little as half the price of package inserts to the same customers.

Other Alternatives:

Inserts have been included in newspapers, supermarket take-one racks, have ridden along with Pennysavers, order acknowledgments, FSI's (Free Standing Inserts: over runs of Sunday Supplements) and the list goes on.

As direct marketers look for increasingly creative methods to better their bottom line and find less expensive ways to develop new customers and generate qualified inquiries, more will be developed. An experienced broker can help lead you through the maze and find the best alternatives for you.

More About Package Inserts

The going rate for package inserts is an average of $50/M. The number of outside inserts varies from 4-8. Generally only noncompetitive pieces are included together.

If one goes heavily into a club or continuity oriented program, the rate of duplication needs to be monitored. The response rates also vary significantly depending on a number of other variables:

Whether the insert is generating a lead or producing an order,
The average ticket price of the items being sold,
The size of insert.

A large ticket item may be satisfied with two responses per thousand (.002), whereas lead generating devices having a strong affinity between the insert and the products being delivered would require and will produce responses from 2-5%. According to Henry, average acceptable response rates for package inserts overall vary from 0.5 percent to 4 percent.

Additional advantages include the fact that you're paying only for the distribution and not for the postage. Since your insert is arriving with the customer's purchase, you're getting strictly mail order buyers and the very hottest of the "hotline" lists (most recent 30 to 90-day names). This method of distribution also has the effect of granting the advertiser a certain degree of credibility and approval from the sponsoring mailer.

Markets for inserts are highly targetable, and you can quickly achieve large volumes of impressions. As mentioned above, your insert is guaranteed exclusive in your category, so you don't have any competitors to contend with. As with lists, you'll want to test at least ten companies at about 10,000 to 15,000 pieces each in order to achieve statistical reliability.

In business-to-business markets especially, alternative media may be a cost-effective way to drive traffic to a Web site. Self-mailers are being used to do this now, at considerably greater expense.

Creative can be kept simple, and should run less than $30 per thousand. The piece must weigh under one-quarter ounce.

Getting Started in Package Inserts

For the uninitiated, package inserts -- and alternative media generally -- can be a jungle. To help newcomers get headed in the right direction, broker Leon Henry offers the following ten suggestions:

1. Use a Broker. Don't do it yourself. It's tough and unnecessary. We know all the answers. We've been there with over a billion inserts for nearly every conceivable company and industry and we (or any reputable broker) will tell you what's good for your product...and what you should avoid.
2. Test. But test smart. Some mailers test for "test's sake" which unfortunately means when they are through they don't know what and why they tested. It is axiomatic in the insert market because of its varied nature that you test.
But testing smart means testing with a proven insert wherever possible. Test statistically reliable numbers relative to your offer. Test with no more than two copy approaches. Test as many programs initially as your budget allows. Remember that the batter who comes to the plate once is only a hero if he hits a home run. Test smart by coming to bat as often as possible. One strikeout won't look so bad among the homers.
3. Test New Programs. Along with the stand-bys such as Hanover House, Newfield, Ambassador, Carol Wright, and Fingerhut you want to test the new ones such as Viking Office Products and Global Computer Supplies.
4. Use One Insert. Look at all the smart mailers and you will see that they have been going out with one insert format for years. Why one? Because you want to test the medium and not the message. If you are confident with your message, then each test of the medium (the various package-insert programs you go into) will be clear in its results.
5. Ask Lots Of Questions. Don't be afraid to ask your broker every silly question that you can think of about the source of the program that he is presenting to you. Just as you would ask other media salesmen, you should inquire about the source of the customers, number of years in business, other marketers that have used and continued with the program, the time that it takes for your inserts to be distributed, and so on. The more you ask the better informed you will be. The better informed, the more likely you are to be successful.
6. Be Sure To "Key" By Program. You'd be surprised how many sophisticated mailers forget to key in such a way that when the distribution takes too long, they can't research how and when their inserts were distributed. For example, if the distribution will take three months, it makes sense to key your inserts in such a way that you can tell when the first month is completed and so forth. The small extra expense with the printer can save you headaches and cut your aspirin bill.
7. Use The Right Sources. Just as you should be using a knowledgeable broker, you should have the right printer, direct-mail consultant, and, where necessary, the correct mailing house working for you. Ask for competitive bids from everyone that you use. Your printer, sad to say, may not be right for the insert market even though he is an expert with your catalog.
Your artist should know that inserts must be machine insertable, which means that when the finished product is delivered to the company inserting them, they must be able to place them on their inserting machine and collate your insert with the others going into the package.
8. Ask For Proof Of Receipt And Proof Of Delivery. For decks that means U.S Postage Receipt #3602 plus two sealed samples. These days you can be reasonably assured that the inserts you send to be distributed will be used. Why? Because too many companies are making too much money from the service to "fuss" around. But it always pays to be cautious.
Your broker should obtain an insert sample upon receipt and upon completion and have it in his or her file. Your printer should have receipt of delivery. Your inserts should be boxed professionally and clearly marked. The insides of some of the warehouses dwarf the imagination and your insert can get lost.
9. Pay The Right Price. Because of the variety of insert programs, you want to pick the best for your offer and then decide on the right ones based upon the top price you are willing to pay. After you've received the test results, there's plenty of time to negotiate for price reduction. As with other media, prices change with volume and frequency. After all, the worst your broker can report is "the rate card or nothing." It pays to ask.
10. Expect Less, Get More. This is a medium that is still being developed. For all the success stories, the package insert field is just like the other forms of direct response. It is a numbers game. If you watch the cost of printing and the cost of distribution, your response should be sufficient to provide you with a satisfactory cost per inquiry or cost per order.
If you expect a miracle, this is not the medium. But for steady production of orders at reasonable and competitive costs, this medium is hard to beat. And for ease of entry, low visibility, low cost, what could be better?

More About Card Decks

Most of what is true of package inserts applies equally to card decks. However, card decks offer even less real estate in which to get across a message. Despite that apparent shortcoming, however, marketers in every category -- and business-to-business marketers especially -- are finding card decks a cost-effective addition to their marketing arsenal. At an average of 2c to 3c per contact, they're certainly worth testing.

Indeed, as mentioned earlier, some use card decks exclusively to get leads, then follow up aggressively with additional direct mail and/or telemarketing efforts both to re-qualify respondents and to convert. In recent years I've worked with two such marketers, a magazine publisher and an electronics manufacturer.

For a quick snapshot of how a card deck media plan might look, following are actual "recos" ("recommendations" in listspeak) for a client selling Network Certification software.

Name of Deck (circ)	1x	3x	+2nd color
Computerworld (147,000)	$3744	$3494	+$435
Computer Network Professional (100,000)	3900	--	+395
Hi-Tech Times (120,000)	3900	3700	+150
Internet Week (130,000)	3250	2990	+245
Windows (120,000)	3900	3700	+150
Windows NT (100,000)	3200	2800	+250

The most effective test of any one deck would consist of a minimum of three insertions which puts a test in this category into the $12,000 range. As with space advertising, there is a cumulative effect to being in a card deck with some consistency. Ask your broker who the regular repeaters are in any deck and examine their offer for a fairly reliable indication of what's working in that deck.

Many trade magazine publishers also have card decks which may represent the circulation of one publication, or an unduplicated list subscribers to several titles. And while card decks have long been a creature of business-to-business markets, more consumer-oriented companies are starting to get into decks as well. Leon Henry, VentureDirect, and Millard Group are among the companies offering consumer-related decks (see below).

The Downside: Quality/Quantity Balance

Somewhat like the so-called "bingo" or reader service cards in magazines, one of the problems with card decks is that it is often too easy to respond to them. Flipping through a deck of cards and pulling out anything that looks interesting at the moment makes this medium a tire-kickers delight. Some decks even include preprinted labels so the recipient needn't write his or her name on the card, but just affix a label.

As outlined elsewhere in this series, marketers need to be careful of the "Quantity/Quality Ratio." Attractive free offers with quick-and-easy response mechanisms invite abuse by less qualified respondents. It is advisable, therefore, to place a few hurdles in the road that only the more interested -- and therefore better qualified -- prospect will work to overcome.

These can be as simple as requiring the prospect to affix a stamp to the card, rather than using the more common postage paid business reply mail. Another is to require a phone number and perhaps include a "best time to call" slot to make it clear that the respondent can expect a phone call. Generally, the more information you request on the card, the higher the level of qualification.

Another strategy, especially if the fulfillment material is costly, is to re-qualify card deck prospects through a followup mailing or even a phone call if the financials permit.

Finally, be sure you know how each list is compiled. Sometimes the list itself can offer substantial qualification -- or not, depending. Always ask.

More About Co-ops

The competitive environment in a co-op envelope is significantly more intense than with some other alternatives. Four-color images are virtually mandatory. Graphics should be bold, but limited, with eye-catching logos.

Fine tune your offer to match the co-op's various markets, testing several if necessary. Offers should be "no-brainers," simple, quick to read and easy to understand. This is not a place to innovate. Make your piece as large as the envelope will permit.

Pricing for co-ops is usually negotiable, so ask questions.

Back End Analysis is Critical

The primary keys to success with any form of alternative media is to carefully key each insert or card for each list and medium used and analyze the conversion rate based on your criteria for a "qualified" lead. Cost per qualified lead, not response rate, is the critical metric in alternative print media.

Alternative Media Sources:

Not every list broker handles alternative print media, so you'll need to shop around. Following are several sources.

Leon Henry Inc., 914-723-3176 (www.leonhenryinc.com)
FSdm (Fred Singer), 914-472-7100
VentureDirect Worldwide, 212-684-4800
Fred E. Allen Inc., 903-572-1701
List Services Corp, 203-743-2600
Millard A/M Group Inc., 603-924-9262.

Alternative Print Media: The low cost route to prospecting