Sunday Inserts and Supplements are Dead! Long Live Sunday Inserts and Supplements!
Commentary
by Al McClain
All
of us "industry insiders" know that newspapers are going out of business,
paper coupons are history (not withstanding a brief respite due to our
recent economic travails), and shopper promotions are going online, mobile,
or in-store. One thing we can say with absolute certainty is that advertising
via Sunday inserts and supplements in local newspapers is not the way
of the future! So say we all.
Not
so fast. If this is all true, then can someone tell me why the most recent
Sunday edition of my local paper (The
Palm Beach Post,
December 6th,
2009) included a stack of inserts approximately an inch high with
offerings from 23 retailers, 3 manufacturers, plus two multi-sponsored
coupon supplements?
Retailers
with inserts included CompUSA, OfficeMax, Sears, BrandsMart USA, Total
Wine, Firestone, Sports Authority, Target, Office Depot, World Market,
JCPenney (2), BestBuy, Bealls, Michaels, Mattress X-Press, Kmart, Publix,
Walgreens, Toys R Us, Radio Shack, Kohl’s, Macy’s, and CVS. Manufacturers
included DirecTV, Sony, and Dell. And, the coupon supplements included
offerings from an astounding 51 manufacturers, 9 retailers, 9 restaurant
chains, and 6 service companies.
Recently,
at an industry conference, an acquaintance said to me, "You still subscribe
to a newspaper?,"
as if I were still guilty of still using an abacus, or maybe a stone
tablet. Living in an area of the country with many retirees and golf
courses, maybe my newspaper is an anomaly.
My gut feeling, however, is that we may be too quick to write off traditional
advertising and promotional methods in our RetailWire discussions. Perhaps
this is due to the tendency of our enlightened readers to know about
the latest and greatest high-tech methods for reaching consumers and
shoppers.
I
guess the easy answer is that retailers and manufacturers are just biding
time, using these old-fashioned methods until their day of reckoning
comes, and the powerhouses of the new methods emerge. But, for a dying
industry, newspaper inserts and supplements still seem
to have a lot of life left in them.
Discussion
Questions: Are newspaper inserts still an 800 pound gorilla when it comes
to consumer promotion? With so many new and emerging methods to target
consumer promotions, why are so many blue-chip retailers and manufacturers
still using old-fashioned newspaper circulars and supplements?
I was actually thinking about this issue when I was lugging in Friday’s newspaper bundle. Then I thought about it again when I was lugging in Sunday’s bundle. And I thought about it even more on Monday when I went to extract the newspaper bundle from a frozen bush. Awhile back I was on the ‘circulars are dead’ bandwagon but I’ve since changed my mind. Retailers are increasing their paper media inserts this season. The Richmond Hill Liberal now has 3 circular bundles. After interrogating the newspaper boy, I discovered that the volume of flyers has increased as there are now 3 circular bundles, up from one a little less than 6 months ago.
Obviously, this is a marketing tactic to increase traffic and sales and I believe it’s working. A non-scientific survey of people in my non-retail circle indicates that all levels of income are looking for deals and the first place thing they think to check is the flyer bundle. “Hey did you hear that President’s Choice Candy Cane Chocolate Ripple Ice Cream is on sale for five bucks?” Flyer finds are now the dominate subject in friendly discussions. Flyers still have a place in retail marketing. They do work.
Newspaper inserts are still a good way to reach a wide swath of consumers with one advertising vehicle. Yes, newspaper readership is down and will never return to past levels, but that does not mean that newspapers are irrelevant advertising vehicles. As long as media planners have a good grasp of newspaper readership demographics, they can buy accordingly. As to the inserts themselves, consumers like them. They offer easy access to sale information, especially during the holidays, when sales information is a high priority.
Newspaper inserts may only be a 100-lb. gorilla with the army of people under 50 but they are still 800-lb. gorillas with those people over 50 considered seniors…and they are multiplying.
Newspapers are dying but they aren’t dead yet. Somewhere, I believe–perhaps hopefully–there are young, modern-day and highly-inventive Pulitzers, Hearsts, McCormicks, Scripps, etc, dreaming up paper-based methodologies to communicate the news and carry coupons contemporarily & competitively. But for the moment, the aggressive cyberspace dispensers are invading the coupon frontier and testing their mettle.
Newspapers are hiring more salespeople; the allure of the silver bullet is strong. But moving the needle of sales or old habits dying hard? I’d say the latter.
Newspaper coupons, FSI, inserts, etc, are still effective for major national brands that target certain demographics and coupon-clipper consumers, however, I have not seen evidence in recent years that newspaper coupons achieve good results for small brands, niche brands, or specialty items. Nor do they seem to generate new trial as they once did. I believe that today’s newspaper coupon clipper is purchasing items that she already knows and buys, on a regular basis.
Circulars are certainly in trouble, but I don’t think they have a ton to worry about quite yet. Personally, I get the Sunday paper just to get the circulars. The problem is that while the medium and the delivery method are shriveling up fast, there really isn’t anything to replace them. I can’t picture myself going from JCPenney’s to Target’s to Best Buy’s website just to see a virtual version of their circular. There’s just something about curling up with coffee and seeing what retailers have on sale this week.
Will something like the Kindle deliver the same kind of experience? It doesn’t look like it, so far. Color would be just one issue there.
The big stacks of inserts and circulars are still in place because that’s what retailers have always done. It is true that they do get some attention and use and drive some business.
What is also unfortunately true is that their power to drive incremental business is becoming a thing of the past. Look at the Black Friday results–a significant drop against wretched LY numbers.
The point is that while the inserts still have a place, it is highly questionable as to whether there is a reasonable payback for the costs. The more important point is that this channel of communication is eroding quickly and retailers need to move on to the next channel–Social Media.
I’m with Max Goldberg on this one. Totally. Personally, I think we’ll see newspapers and inserts around for some years to come. And, having started my own print magazine in August, with things going well despite the recession and “the death of print,” I’m fairly optimistic that this particular media has more life left in it than “bleeding edge” folk recognize.
I too have faced the astonished look when I ask someone if they read an article in the Trib (Chicago Tribune). Agree that perhaps it is a generational issue (freely admit that I am on the up side of 50). That being said the Trib still carries a large number of FSIs.
Rather than having to sit at my computer and look at the same screen I use for work, I can sit in at the breakfast table or even the couch and peruse sale information on companies from Dominick’s (grocery store) to Dell. I don’t have to go looking for this information, it is sent to me. Should I then want to seek additional information or look for something that wasn’t in an FSI, I can always revert to the computer.
We may find this method of advertising is not as dead as we thought.
It took a long time for buggy whips to go away; the same is true of newspaper circulars. But they will go away.
In today’s world, if you keep doing what you have always done you will not even keep getting what you always got.
Print is also here to stay but it is going to look different; more specific and more targeted.
To often we confuse loss in circulation to electronic media in the daily environment with Sunday circulation. Sunday is still big, and will be for a long time. In fact, I’d think there are more newsstand sales on Sunday than home delivery.
It may even be a missed opportunity for destination marketing. What other excuse would I have for getting a Starbucks on Sunday morning if I didn’t absolutely have to run out first thing to get Mrs. Scanner her Sunday ads? We’ll (or should I say ‘I’) will be getting a Sunday paper at the local establishments for a long time. I want my excuse to get a Starbucks and of course it kills time while Mrs. Scanner prepares for church. It’s a ritual for many. How do I know that? I’m never alone in doing the same thing.
This sounds stupid, but I buy the paper for the ads and coupons anyway. Why can’t I just buy the insert and skip the paper? I get my news elsewhere.
It is an interesting variety of comments, particularly the observation about the demographics. Age demographics portend a trend that marketers should be aware of. While there is always excitement in the coming growth of the Senior demographic, spending for that demographic drops sharply vs. those in the younger targets.
Anecdotally, I would concur. At my late 30-something’s son’s home, the FSIs are the first thing out of the paper. Without hesitation, they go right to the recycle pile. No paper is delivered to the home of my daughter’s family.
However, in my very senior home, behavior seems to be closer to that of my children. The FSIs go right to the recycle pile, except if I am looking for something (note: my wife has NO interest in browsing the FSIs). For example, I am shopping for a new netbook, so I scan Best Buy, Staples and RadioShack, to get a sense of what is available and the pricing. But, when I am ready to pull the trigger, the purchasing step will be made online.
Traditional advertising done in newspapers through ads or FSIs will certainly change over time. Amazon and Barnes & Noble are working very hard to move this process along with their readers Kindle and Nook. All of that said, a large part of the population still enjoys sitting down with a cup of coffee and BIG Sunday paper so it still works, today.
Retailers and CPGs continue to focus marketing budgets on FSIs and traditional media because they have money to invest and are not fully aware of all the great media alternatives out there today. AdAge recently talked about companies that used no money in traditional media with huge success. Five Guys burgers was one of the companies they discussed.
FSIs are certainly a popular vehicle for retailers and CPGs to get their message out. That’s said, I would encourage both to explore some of the new and less tested alternatives.
The effectiveness of newspaper circular advertising is still viable but I say it depends on the demographic. If you want to reach 18 – 24 year olds; they are not the most effective in most cases. I teach both undergraduate and graduate students and I assure you, because I have polled them, they are not reading newspapers regularly; including their student newspaper. They get their news online and do not feel the same social responsibility pull us old school people do for “knowing” the news or making sure we read the papers. And they sure don’t enjoy getting up in the morning and reading over a cup of coffee like we do.
One group of print ads that does work well with college students is fast-food coupons. You put a 2-for-1 Subway, Quizno’s, or Pizza Hut coupon in there and they instantly are gone.
Essentially, newspapers as traditionally published are in trouble, but I believe they will be around for a long time–but with a different business model. I also think they will never attain the broad-based appeal they once had to the generations coming after us.
The sad thing is that the writing is on the wall for all the “traditional” distribution methods. In Bergen County, New Jersey (a densely populated area) it is economical to do exactly what someone has suggested. Once a week, a bundle of advertising is tossed onto the front yard. There is no news associated with this “paper.” The result is that news must come from other sources. I imagine this makes things particularly challenging for the regional or independent retailers who may rely more on local news distribution to get their message out.
Newspaper inserts will live as long as the baby boomers do, which looks to be quite some time. However, if desperate newspapers like the Chicago Tribune–who took out the TV guide on Sunday and put it in the Saturday paper to attempt to create more sales–continue down that path, then the life expectancy is much shorter.
Of course the insert isn’t dead and the newspaper isn’t dead…yet. It takes a long time for things to change.
There are two major issues impeding a faster decline:
1) What else can replace it? No online medium has proven the same type of value yet (though this may be coming…at least for certain customer segments/demographic environments). With time, mobile ads are likely to change the game.
2) It is hard to figure out what the insert is worth, both to the retailers and to the manufacturers who are often strong-armed into paying for some or all of it. APT is trying to change the game on this one!
We no longer have the daily paper delivered, but subscribe so that the Sunday Trib, with its highly prized circulars is on the driveway by 7:30 a.m. I thought it was interesting that, although we should not be getting a Thursday paper, on Thanksgiving morning one had been delivered–including the biggest bunch of supplements and inserts I can ever remember. I do not think the deliveryman made a mistake. There is a lot of value both to newspapers and to advertisers in this medium and they know it.
Also, maybe I’m being overly sensitive about the advertising and coupon delivery issue, but I do think the stereotyping and delineation by some (young and hip people=social media, while old and traditional people=newspapers and inserts) is a mistake on several levels. Americans are just more diverse and complex than that. And c’mon, when did folks “over 50” start being considered seniors?
Yesterday, a customer in front of me walking into Staples carrying his Staples insert in his hand as we headed into the store. Inserts remain a customer friendly and habitual tool to inform the buying process.
Albeit older research but an NAA study indicated that among people who purchased a copy of a Sunday newspaper, 47% cited the advertising inserts as the primary reason for buying the newspaper that day.
The retail insert is far more than a piece of advertising. It is fundamentally how merchants at retailers go to market for any given week. It represents the inventory assortment, pricing strategies, and how they sign the stores that week.
The printing, paper, and insertion costs make it an expensive proposition relative to digital delivery but the ROI has been there and I have seen sales declines when eliminating the insert as a retailer.
As an early 40s print media buyer for a national department store chain, I’m definitely biased toward the effectiveness of newspaper inserts. I think many in my position would agree that newspaper subscribers align closely to our shopper.
I agree with Nicki and Steve that the portability of inserts is a plus as I’m not tied to a PC or desperately trying to “browse” an online insert on an iPhone. And, they are conveniently delivered to my doorstep. It’s my weekly ritual to go through the Sunday paper and create my list of errands for the week by perusing the inserts and pulling out those of the retailers I will plan to visit and recycling the ones that I don’t need to follow up on.
In my (only) 10 years in the newspaper business, there has been much progress made to make the newspaper insert a smarter tool for advertisers. Mel, papers are already becoming more targeted with their insert methods. Even just 10 years ago, many papers required an advertiser to buy full run (the whole circulation). Now, they are learning that not many advertisers need all of that distribution and are allowing us to focus our buys by zip code and even by sub zip or carrier routes. There are also total market coverage (TMC) products that go to folks who don’t subscribe to the paper (that don’t include any news content). Gannett and McClatchy have taken that further and developed the “Sunday Select” program in specific zip codes around the country where folks like rmyers412 can opt in to get JUST a bag of inserts with no news content.
So, to answer the question, I think that FSIs are here to stay–especially if papers keep refining their targeting techniques and keep coming up with relevant products.
P.S. Liatt, you got a Tday paper from the Tribune BECAUSE you are a Sunday subscriber. Many papers use their Sunday list to deliver holiday editions.
Great discussion.
Some of you may interpret my comments as biased since I work for a newspaper company. Rest assured I am not one who only shares “rah! rah! team” feel-good comments; I am one who routinely discusses the “pros and cons” of newspapers and other advertising mediums with our sales staff, clients and agencies.
NAA and MORI conducted a national study this past spring to find out more about how consumers shop & spend and how they use media in those processes. A few of the findings: Fifty-nine percent of adults report using newspapers for shopping planning and purchase decisions in the past week. 18-34 year-olds are not too different (47% use newspapers for such planning). Even many self-reported “non-readers” then stated that they used a newspaper to check sales information, clip coupons, etc. in the past week. In total, 8 of 10 consumers report taking action on a newspaper ad in the past 30 days. Newspapers are still being read and used by consumers and advertising is an important attraction to the product.
Many of the comments here echo what we are finding in our research and what we hear in discussions with customers. No one single advertising medium works for most advertisers. Diversification of message and vehicle is needed depending on one’s mass or targeted audience.
A large chunk of my Sunday morning this week, visiting family in Anchorage, was spent around the breakfast table, drinking coffee, chatting (oh dear oh dear oh dear) and passing around the inserts. How’s that for social media? Long live social media. And newspapers.
Many of my colleagues at RetailWire are determining the health of newspapers (and their future) from clear hearsay that comes during the busiest time of year for print media. Print media is dying! The indicators are everywhere as the old print empires close their magazines, lay off their staff, close their newspapers and “thin out.” Do not measure their future by the thickness of a T-day weekend snapshot. Instead look at advertising for the entire year, compare the number of newspapers that there were just 5 years ago, to today, and even more importantly, ask how all of these sets of eyes are watching TV, the Internet, texting, Twittering and posting (and shopping) on Facebook and thousands of other websites, without leaving the traditional places which used to occupy so much time (i.e. print media).
In addition to the other comments made about FSIs, I would like to point out that for smaller retail chains, those that cannot afford a heavy broadcast schedule or a 40 week plus FSI schedule, FSIs are the great equalizer. They are one of the only mediums that does mot require frequency to be effective. One drop and a small retailer sees a sales lift. Also, to a great degree, FSIs solve the “share of voice” issue for smaller players. Their circular, if well designed and compelling, puts them on equal footing with their much larger competitors. There is virtually no way they can do with broadcast where they are way overspent by the national chains. For these reasons and many other reasons, I feel FSIs will be around for a while.
This is an old argument about newspaper inserts being dead. The media is sick but until retailers have full faith that other advertising applications can replace the business impact of Sunday inserts, you will continue to see them filling your Sunday newspaper.
The simplest business metric to measure the advertising effectiveness of inserts is to not run one and measure the impact on your business against last year. Retailers do not accept the risk of not comping their advertising.
Testing should be done in markets to put a yardstick to this argument. Any retailer will tell you they do continue to drive business.
Retailers may well accept a diminished ROI on inserts but a strong business case needs to be made on what medium will replace this tool and its impact on the weekend business.