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Tuesday, August 01, 2006

How Email & Search Have Made Magazines Cleaner

Sort of. The Wall Street Journal reports on how Philips Electronics is paying Hearst $2 million to eliminate subscription cards from the September issues of four Hearst titles -- Redbook, O At Home, Weekend and House Beautiful.

Each magazine will instead run a two-page Philips ad with the line "Simplicity is not having subscription cards fall out of your magazine." The ads give information about Philips-branded Web sites, created specially for the promotion, where readers can subscribe to the magazines.

Acquiring magazine subs has become too expensive in this new economy and most magazines are still underutilizing email and search marketing to acquire and retain subscribers.

Some other interesting statistics from the piece:

Cards now generate about 12% of the magazine industry's new subscribers, down from about 20% several years ago, according to Washington, D.C., circulation consultant Dan Capell.

The Internet, on the other hand, has grown strongly in recent years and now accounts for about 10% of new sales. Direct mail is even bigger, generating 22% of new subscribers, he estimates.

The net cost of signing a new subscriber through a card runs from $5 to $10, less than the typical cost of many magazines' annual subscriptions, estimates Greg Wolfe, president of Circulation Specialists, a Norwalk, Conn., consulting firm. The cost of signing subscribers through direct mail, on the other hand, is often more than the subscription price, he says.

"We are very confident that any sort of losses from that one month will be made up elsewhere, and that's part of our plans," says John Hartig, senior vice president of consumer marketing and development at Hearst Magazines. Hearst intends to cross-promote the four titles across its various magazine Web sites and other Web venues.

Mr. Hartig predicts that the Internet eventually "will begin outpacing inserts in total subscription new business volume."

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