Insert Media Buying Guide: Help Wanted
The insert media channel rewards those who carve their own path
September 2007 By Hallie Mummert
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The good news: Insert media continues to blossom, with new programs being announced regularly. The could-be-better news: The channel still needs more players, both advertisers and program owners. While this medium has seen significant expansion in recent years, everyone with a stake in its success is clamoring for more. More large programs. More variety in advertisers and offers.
To identify a few of the main challenges and opportunities in the insert media arena, Target Marketing called on two leading experts: Leon Henry, chairman and CEO of Leon Henry Inc., and Lisa Roland, president of Everyday Media. They shared their thoughts on how marketers can leverage this channel to improve their bottom lines.
Target Marketing: What is the current state of the insert media industry?
Leon Henry: Currently, we see the industry in a state of some flux. Basically, you have mergers or roll-ups going on among broker/managers and buyers, e.g., the Millard-Mokrynski consolidation. This has the program owners wondering who is minding their store, so to speak. The second issue is that of heavy competition among managers to get program owners to switch managers. I do not recall any time recently where there are more requests for review. Basically, owners are looking for more revenue. There are two ways to increase owner revenue. One is to increase sales prices, which is very difficult in the current climate of price-driven buyers. The second is adding additional services for sale; for example, catalog blow-ins and Web inserts.
Growth seems to be slowing down after a burst earlier following the postal increase. But there are some well-known names sourcing the industry with the idea of opening their packages to inserts. Historically, each increase in postage has brought new insert programs and new insert advertisers. While I don’t see the future that we all wish we could have, the increase in both sides of the insert equation should follow.
TM: Are specific types of programs growing faster than others?
Lisa Roland: People are flocking to catalog blow-ins because the volume is there for rollout. We’re finding that the responsive, large-volume programs are getting completely booked, sometimes up to a year in advance. So, one of the current challenges in insert media is that the potential rollout for some programs is not large enough [to entice marketers to test], which keeps some companies out of this channel.
But smaller programs are essential to the medium. Niche programs can be very responsive, but the quantity is not enough, and so we need even more programs.
It’s important for new large programs to come on the market. When companies test into insert media for the first time, they test a variety of options in addition to a big program and find responsive sources they might not have considered before.
TM: What currently are the biggest opportunities for success with insert media?
LH: From the buyers’ point of view, I would say just using the media is the opportunity. When you are able to dig into the big buyers and get them to open up, you see that this is a dynamic medium with excellent response rates and ROI. Unfortunately, it takes considerable time and patience to get to this point, i.e., big usage. The upscale gift houses such as Oreck, Bose and Sharper Image are examples of insert advertisers that are new to the marketplace.
TM: Where do you see growth coming from in the near future?
LR: There are relatively few Hispanic insert media programs currently, and with that being the fastest growing market segment we’re likely to see new programs to reach this group. Catalog blow-in programs will continue to grow, as catalogers look for revenue to offset the continual paper and postage increases. And we will see more dot-coms start package insert programs; Amazon.com started its program two years ago, but it just now has become more publicized and is coming into its own. We need more large programs like this.
TM: What strategies are paying good dividends in the insert media space?
LH: You have heavy price negotiation going on by brokers on behalf of their mailers. With increased distribution available, you have typical supply/demand issues in favor of the buyer.
There are some new players in the market such as charitable offers. This is a very large potential that is just opening up.
LR: The direct marketers doing the best in this medium test new offers and mix up their creative, especially when inserting into a statement stuffer. My opinion is we need more advertisers in the mix. It’s better for everyone—consumers, direct marketers, program owners. Right now, consumers see the same companies and the same offers over and over, so response declines as they stop looking. Response would be better if there was a greater mix of advertisers and if more insert media marketers mixed up their creative.
To identify a few of the main challenges and opportunities in the insert media arena, Target Marketing called on two leading experts: Leon Henry, chairman and CEO of Leon Henry Inc., and Lisa Roland, president of Everyday Media. They shared their thoughts on how marketers can leverage this channel to improve their bottom lines.
Target Marketing: What is the current state of the insert media industry?
Leon Henry: Currently, we see the industry in a state of some flux. Basically, you have mergers or roll-ups going on among broker/managers and buyers, e.g., the Millard-Mokrynski consolidation. This has the program owners wondering who is minding their store, so to speak. The second issue is that of heavy competition among managers to get program owners to switch managers. I do not recall any time recently where there are more requests for review. Basically, owners are looking for more revenue. There are two ways to increase owner revenue. One is to increase sales prices, which is very difficult in the current climate of price-driven buyers. The second is adding additional services for sale; for example, catalog blow-ins and Web inserts.
Growth seems to be slowing down after a burst earlier following the postal increase. But there are some well-known names sourcing the industry with the idea of opening their packages to inserts. Historically, each increase in postage has brought new insert programs and new insert advertisers. While I don’t see the future that we all wish we could have, the increase in both sides of the insert equation should follow.
TM: Are specific types of programs growing faster than others?
Lisa Roland: People are flocking to catalog blow-ins because the volume is there for rollout. We’re finding that the responsive, large-volume programs are getting completely booked, sometimes up to a year in advance. So, one of the current challenges in insert media is that the potential rollout for some programs is not large enough [to entice marketers to test], which keeps some companies out of this channel.
But smaller programs are essential to the medium. Niche programs can be very responsive, but the quantity is not enough, and so we need even more programs.
It’s important for new large programs to come on the market. When companies test into insert media for the first time, they test a variety of options in addition to a big program and find responsive sources they might not have considered before.
TM: What currently are the biggest opportunities for success with insert media?
LH: From the buyers’ point of view, I would say just using the media is the opportunity. When you are able to dig into the big buyers and get them to open up, you see that this is a dynamic medium with excellent response rates and ROI. Unfortunately, it takes considerable time and patience to get to this point, i.e., big usage. The upscale gift houses such as Oreck, Bose and Sharper Image are examples of insert advertisers that are new to the marketplace.
TM: Where do you see growth coming from in the near future?
LR: There are relatively few Hispanic insert media programs currently, and with that being the fastest growing market segment we’re likely to see new programs to reach this group. Catalog blow-in programs will continue to grow, as catalogers look for revenue to offset the continual paper and postage increases. And we will see more dot-coms start package insert programs; Amazon.com started its program two years ago, but it just now has become more publicized and is coming into its own. We need more large programs like this.
TM: What strategies are paying good dividends in the insert media space?
LH: You have heavy price negotiation going on by brokers on behalf of their mailers. With increased distribution available, you have typical supply/demand issues in favor of the buyer.
There are some new players in the market such as charitable offers. This is a very large potential that is just opening up.
LR: The direct marketers doing the best in this medium test new offers and mix up their creative, especially when inserting into a statement stuffer. My opinion is we need more advertisers in the mix. It’s better for everyone—consumers, direct marketers, program owners. Right now, consumers see the same companies and the same offers over and over, so response declines as they stop looking. Response would be better if there was a greater mix of advertisers and if more insert media marketers mixed up their creative.
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