Retailer Sells Ads to Catalog

Discussion
Jun 11, 2002
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Investor’s Business Daily reports that the clothing chain, Too Inc., is selling ads to run in its catalog. An unidentified candy company is reportedly paying Too Inc., a clothing chain that operates Limited Too stores, $750,000 for five one-page ads to run in upcoming catalogs.

The chain’s goal according to the report is to secure approximately $4 million in advertising revenue for its catalog over the next 12 to 18 months. That revenue equals 25% of the cost to produce the catalogs according to Kent Kleeberger, chief financial officer, Too Inc.

What do advertisers get for their money? This year, Too Inc. expects its catalog circulation to reach 34 million (target audience is girls seven to 14). Last year, the clothing retailer mailed 21 million books. Kleeberger estimates that the catalogs generated roughly $43 million in store sales.

Moderator Comment: Will more retailers follow the lead
of Too Inc. and include ads in their catalogs? What are the benefits/drawbacks
to this strategy?


Offsetting cost is always a big issue in retail marketing.
Let’s hope that the chain’s message doesn’t become muddied. Bringing in $43
million in store sales is more important to Too Inc. than getting $4 million
in ad revenues for its catalog. [George
Anderson – Moderator
]


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