How to Buy FSIs
By Alicia Orr Suman
Open the Sunday paper and out pour pages of coupons and sales circulars—including offers from traditional direct marketers: collectibles, personalized products and credit cards, to name a few. But just how do direct marketers get their offers into this wide-reaching and relatively affordable medium?
What to Buy
More than 60 million free-standing inserts, or FSIs, circulate in newspapers every week. Because of their huge circulation, this medium reaches a significant percentage of the population, at home, with the Sunday newspaper.
"The vehicle is well used by many marketers," confirms Lois Attisani, senior account executive at the brokerage and management firm Leon Henry Inc. For catalogers, FSIs can be a great lead generator, while selling a product at the same time, thereby offsetting the cost of the program. Attisani adds that FSIs also can be a learning tool for newer direct marketers. "Say you have a product and aren't sure how to sell it; testing the FSI is a good proving ground," she explains.
When placing your ads, it's important to realize that the type of product plays a role in what type of circulation (USA Today vs. Christian Science Monitor) works for each direct marketer. "Each product may have a different market response pattern," explains Al Stanton, president of Stanton Direct Marketing.
Regional differences also can affect results. While your product may not appeal to city dwellers in the metro New York area, it may do well in central Ohio.
There's such a vast array of FSI media that this is one area of buying where a broker or consultant may be especially useful in determining what newspapers and regions to target.
"A broker could suggest that [a] new client, first time out, might be able to position their product in as many newspapers in C & D areas [as possible], giving them a good range." To test a broad range of markets, use the less densely populated C & D locales, not the more urban A & B counties where you'll have to buy more inserts and therefore won't be able to afford the range.
Finally, consider any other geographically based sales patterns you've experienced in other media. Stanton suggests this information can be helpful in picking test markets.
Making the Buys
Experts recommend beginning by testing remnant space, available at a lower cost per thousand (CPM) than guaranteed space. "You can buy [remnant space] for in the single digits, often at $4/M or under," Attisani says.
For a half-page advertisement, Stanton says to expect to pay in the $2/M to $3/M range for remnant space, depending on the circulation level being placed, frequency of the buys, time of the year, and the requirements of specific markets. Publications usually charge production handling and key code charges in addition to the CPM, he notes.
Later, when you have a clear idea of where your product and offer does well, you can consider buying guaranteed space.
Analyzing Your Buys
FSIs admittedly don't provide great response rates when compared to other direct response media. The results measurement will be in tenths of a percent, says Stanton. But the low CPM charge enables a wide range of marketers to use FSIs successfully.
To determine whether this medium makes sense for you, calculate your breakeven. Look at your cost of goods sold. Compare that to the total price of the insert program.
Says Stanton, "If the cost of goods (COG) is 50 percent or more, it will be very difficult to be successful in [using] FSIs. Chances of success increase dramatically when the COG is in the 25-percent to 30-percent range."
As with all direct response placements, you need a large enough sample to produce reliable test results. Plan to test a minimum of a million inserts. "With more than 60 million available on a weekly basis, you'll need at least that to get any sense of what's going on," notes Attisani.
Stanton concurs, adding that he generally advises marketers to pick small- to medium-sized markets to have a better chance of reading the results for the next step.