The Case for Space Cheap to Test, Quick to Turn Around (1,285
By Denny Hatch
Whenever someone calls me looking for advice on how to sell a product by mail, I invariably suggest a wee test in space to see if it fogs the mirror. The reasons:
• A great many businesses started with small space ads. Among them: Lillian Vernon, J. Peterman, Banana Republic. At right is the ubiquitous "Indispensable Black Travel Dress" ad that TravelSmith runs everywhere. The purpose is to make a little money and get a customer who will buy additional merchandise from the catalog.
• Use a space ad, and your offer can be in your prospect's hands quickly.
• Your offer is in everyone's hands at the same time. This may also be a disadvantage, unless you're set up to handle a rush of orders.
• With space, you can reach the same audiences for less money than mail. For example, if spending $500/M to reach subscribers of a certain magazine by renting its list does not pay in terms of the allowable cost per order, you can reach those same folks via a space ad in that magazine for $20/M to $30/M—or less if you negotiate. Since they all read the magazine, this may be worth a test.
• With space, you can reach wider audiences. For example, if you have a general interest business or consumer product or service, you can reach likely prospects in out-of-the-way places, such as in-flight magazines.
• Print ads are far easier to create than full-dress direct mail packages.
• Unlike mail, you can negotiate for even lower CPMs. In the immortal words of freelance media consultant Iris Shokoff, "I've never bought an ad at full rate in my life."
• If you have credit, you can run the ad and be billed later, paying for the ad out of revenues. Remember, the U.S. Postal Service demands full postage in advance or you don't mail.
Two disadvantages to space ads:
• Your offer is public knowledge on the day of publication, opening you up to copycat offers from your competition.
• You are severely limited in terms of space; you cannot present a highly complex or difficult-to-explain offer.
At Home and Abroad
Two companies dominate the direct marketing space business in the United States and the United Kingdom, and they operate very, very differently.
Novus Marketing, Minneapolis
Last year, Novus placed 37,000 space ads for clients in 800 newspapers and 400 magazines—90 percent were directed to consumers. According to Novus' Brian Blanchard, while Novus does place some fractional space ads, the lion's share are full pages for which its clients pay an average of 30 percent of rate card. Not only does Novus get very good prices, but is also able to negotiate good positions for its clients.
Most of the ads Novus places do not have coupons, but instead prominently display 800 numbers. Interestingly, more of the ads have bind-in Business Reply Cards than coupons; a BRC can increase response by as much as 600 percent. Tip-on BRCs—a fad in the 1970s and 1980s—are little used now.
Is it a good idea to offer a Web address for responses? Blanchard suggests that if an ad is highly emotional, asking a prospect to interrupt the argument and boot up a computer could break the spell. On the other hand, if the ad is selling on intellect and fact, offering Web access is OK. However, in general, Novus discourages orders going to a Web site because they are very hard to track by source. While it's possible to set up satellite Web sites to take individual orders by source, as Blanchard explains, Priceline.com doesn't want its customers forced to remember, for example, priceline.com/free1.
Lavery Rowe, London, U.K.
Where Novus is strictly in the business of placing space, Lavery Rowe Advertising Ltd. is a full-service agency that billed more direct business last year than Saatchi & Saatchi. In 1998, Lavery Rowe created 10,000 different advertisements which ran in 22 national newspapers in the United Kingdom and a variety of magazines.
Lavery Rowe differs from Novus in that it does it all for the client: picks the products, figures out the arithmetic, creates the offers, produces the ads and places them. Creative is free; Lavery Rowe makes its money on the placement of the ads.
According to its affable, rumpled managing director, Nigel Rowe, clients don't come to him with ad budgets. "If an ad works and the product sells, it will create its own budget," Rowe says. "Our investment is getting your ad to work. Repeat ads are how we make our money." He adds: "A good product is worth more to me than a new client."
Lavery Rowe buys blocks of space in the national newspapers at huge discounts and resells it piecemeal to its clients at massive savings under what they would pay on their own.
British consumers respond to mail-order ads—especially the folks over the age of 50 who spend money on health, vitamins, gardening, leisure products and clothes for £12 and under. Response by e-mail is minimal. Forty percent to 50 percent of the orders come in by phone with credit cards; coupons work well, but they are often not used in fractional ads because they take up so much space.
Lavery Rowe's structure is unique in that it has no media department. Rather, the 10 account executives are, in effect, one-person agencies and do it all—client hand-holding, creative, media placement and analysis. Rowe briefly got into the fulfillment business and got out. "It was the hardest work I ever had to do in my life," he says. "I worked every weekend." Fulfillment is outsourced for clients who don't have their own.
With Lavery Rowe account executives being so attuned to the market and aware of what creative is working (and what isn't), products that are losing their legs can be given a boost by the agency. A case in point: Sales of giant bean bag beds for pets were beginning to sag; Lavery Rowe suggested personalizing them and promptly increased response by 40 percent. Often a client will have products in the warehouse that have simply stopped moving. These products can be tacked on to another product as a premium and given away free, often boosting response dramatically.
At the International Direct Marketing Fair, held in London this past March, the head of direct marketing for one of the major London museums stopped by the Target Marketing stand and moaned that she could not find any new lists for her catalog. I marched her around the corner to the Lavery Rowe stand and suggested they do business together. Nigel thanked me; one of his biggest clients sells rare coins, and the agency is acutely aware of not only what sells but which of the publications will work best. It was a natural mesh.
Rowe's wildest story had to do with an Ears and Nose Clipper. The engraver at the printing plant—as a prank—removed the "E" from ears so the headline read: Ars and Nose Clipper. Sales were 10 times projections!
My own assessment: If Nigel Rowe cared to set up an American version of Lavery Rowe—with its experience, its control, its success in making money for its clients and itself, and its highly-sensitive antennae detecting every nuance of the marketplace—it would be a force to be reckoned with.
Especially in this era of skyrocketing costs for direct mail and broadcast—as well as the privacy legislation sword of Damocles hanging over all our heads by a single horse hair.
DENNY HATCH, consultant and freelance copywriter, founder of Who's Mailing What! (now Inside Direct Mail) and former editor of Target Marketing, is the author of "Method Marketing" and "2,239 Tested Secrets for Direct Marketing Success." He can be reached at (215) 627-9103 www.methodmarketing.com.