Ogden Publications' Cherilyn Olmsted on Cutting Marketing Costs but Not ROMI
Companies in all industry verticals have tightened their marketing belts to ride out a rough economy, but few as aggressively as publishers. With the need to push performance to new heights, Ogden Publications—which puts out Mother Earth News, Utne Reader and Grit among other magazines and books on self-sufficiency, sustainability, rural lifestyles and farm memorabilia—has been testing and refining its direct marketing strategies to not only make its budget stretch a little farther but also to better serve customers.
This week, Target Marketing Tipline talks to Ogden's director of circulation and marketing, Cherilyn Olmsted, to learn some of the tests it's been trying and what affect their performance is having on the company's future marketing plans.
Target Marketing: Which direct response media drive the most orders for Ogden Publications?
Cherilyn Olmsted: I would say probably direct mail [is first] ... probably e-mail promotions and just online orders in general are probably our next-to-largest source. Five or 10 years ago, insert cards would have been much higher than e-mail and online, but that's increased to where we have a much larger percentage of our orders online. And then obviously renewals ...
TM: What is helping to increase your online orders?
CO: We do a lot of cross-promoting. So if someone gets a promotion for Grit magazine and they go online and subscribe ... then on their confirmation page we typically have offers for at least a couple of other titles that might relate to that magazine. Motorcycle Classics is a little bit more difficult; we can't cross-promote that as easily because we don't have another motorcycle magazine or anything that's somewhat close audience-wise.
And we're just getting into doing some combo offers where on the same order page for Mother Earth News, [prospects] can just check a box and say "I'd like to order Grit magazine for another $5" or whatever ... we haven't determined what the rates on those are going to be yet, but just trying to get that combo offer in place on our Web site.
Sometimes [the publication price for individual titles in the combo offers is] the same [as the price on the single-title order page], and sometimes it isn't. It depends on the title. Some of them we can't discount as heavily as others. For example, for Gas Engine magazine we have a pretty high cost of delivery, so we want to make sure we recover all of our costs at acquisition. And so we try not to discount that one too much. But we can discount, say, a Grit subscription a little bit more.
TM: What direct mail formats have you been testing to trim expenses?
CO: With probably three or four of our titles, we use a 6" x 10-1/2" with a pretty large envelope with a die-cut window for the free issue sticker and then the address window. So, it's a pretty expensive package. And because it's a larger size, it does get noticed in the mail but it's also very expensive. We tested the 6" x 10-1/2" against a plain old #10 envelope package. For some of the magazines, it didn't work. For Motorcycle Classics, it did work. So it just depends on the audience and probably the components we have in the package.
For most of the 6" x 10-1/2" packages, we have the four-color brochure, a letter or lift note, Business Reply envelope, and the order card. If we reduce the size and we don't impact P&L and the response, then we go ahead [with the smaller format].
We also have a smaller package for Gas Engine magazine; it's a little #7-3/4 [package], smaller than a #10. And that seems to work for that audience. It's a pretty niche title; if you see Gas Engine magazine on the outer envelope and you're not interested in gas engines, you're probably not going to open it [regardless of format size].
What seems to work for Mother Earth News is just the plain brown Kraft outer envelope.
So it's just interesting to see the different sizes and different colors and different things that attract potential customers. The organization of [Ogden's direct mail program] is pretty massive. We mail anywhere from 3 million to 5 million pieces a year—5 million probably on the top end, as we've cut back quite a bit. And so coordination of all the various test panels [is challenging]; we try to typically test about 20 percent of our mailing with each campaign that we do.
TM: How are you getting more efficient with your e-mail efforts?
CO: ... We just started doing this—we don't have a whole lot of data to go on for years and years—but we're breaking our e-mail lists down by source, so we can tell how [customers] came to us originally. Whether they came through as an active print subscriber and provided their e-mail address on a printed piece, or if they subscribed online, or if they came through an e-mail newsletter, or if they came through a sweepstakes. And so ... we can tell that typically our active print subscribers are our most engaged ... they're our customers who are buying the most and who are most open to receiving e-mails. We look at our clickthrough rates. We look at our open rates and obviously our response rates. ... Sweepstakes names tend to be our less engaged [subscribers], but they are still a good source for us so we don't want to discount them.
We're also working on, and this is still new to us, but we're testing this month different offers to our sweeps addresses than our active print subscribers, knowing that they respond differently. Originally, we just kind of grouped them together, and we realized, "Hey, hold on here. We need to evaluate how these people are responding differently and what kinds of offers we need to provide to them where they'll respond in a better manner." So we're trying to get them in that group that we call our highly engaged group, through our e-mail service provider.
… So what we've done with our e-mail service provider is set up [an automated targeting functionality], and it allows us to take our list and segment by what we call the highly engaged ... So we can segment them by engagement based on as far as what they've responded to previously or by source ... We want to eliminate any unnecessary e-mailing if we can, and only e-mail to those people where it makes the most sense.