Product Retail Media 8 min read

Print and Digital Circulars: Optimizing the Mix

As we obsess over the course of the future, are we tossing out the past? Driven to take a fresh, clear-eyed look at this, we decided to field a major study to understand America’s view of the weekly circular.

Written by

Perion

Published on

29th Mar 2023

Share:

As We Obsess Over the Course of the Future, are We Tossing Out the Past?

Here at Undertone (A Perion Company), we challenge ourselves with that question.

 

Does the classic newspaper supplement – the FSI – continue to play an important role in the lives of millions?

 

Does the all-digital-all-the-time world blind us to the enduring power and utility of the iconic newspaper?

 

Are we digital snobs?

 

Driven to take a fresh, clear-eyed look at this, we decided to field a major study to understand America’s view of the weekly circular.

 

The results demonstrate our cultural complexity – the power of the traditional and the essential value of digital engagement. They also reveal – unsurprisingly – that the power of “omnichannel” extends even to how consumers want to be informed about promotional offers. More to come about that.

 

Overall, it is shaping up to be a confusing year of contradictory opinions for the retail community. Headlines abound regarding store closings, inflation-driven wary consumers, increasing layoffs, general economic headwinds, and retailers’ optimism about 2023. And, of course, burgeoning retail media networks are fattening retailer revenues with high-margin advertising.

 

On the other hand, employment is strong and spending in some categories – like health and beauty – is robust.

 

The result of these mixed signals is general agreement that caution is needed in managing costs, yet the potential for revenue expansion and growth is also something that every marketer must be focused on.. Therefore, retailers are coalescing around increasing promotion- and the strategic management of those dollars – to drive store traffic in consumer-stressed times. The issue, though, is how to offset the margin pressures resulting from aggressive promotion.

 

A further headache for retailers is that investment professionals, in some cases, are shying away from retailers and CPG companies due to concerns about promotion expenses.

 

One answer to both these issues is to make your promotion investment work as hard as possible to drive volume while reducing the overall cost of the programs.

 

The new generation of management solutions offer a platform driven by the simple math that digital circulars have been proven to achieve a 10x to 19x ROAS improvement over the legacy model.

 

This reality demands a strategic reallocation assessment of remarket development funds – to include both printed circulars and digital circulars.

 

In other words: Omnichannel. Let’s explore the basis for our assertion that print + digital far exceeds print alone:

 

Brands have used printed circulars for decades to introduce products and give discounts on beloved brands. The original circulars go back to the 18th century, and newspaper circulars are over 100 years old.

 

But printed circulars are undoubtedly expensive. Mailed circulars cost about $55 per thousand, with product weight driving the cost burden. Adding circulars to a local newspaper costs anywhere from $25 to $120 per thousand, depending largely on page count. Solo mailing options are expensive, costing up to $200 per thousand. Finally, FSI coupon books, predominantly used by CPG manufacturers, cost up to $7 per thousand.

 

Grocers generally run expensive weekly print circulars that focus on deals, and the aim is to distribute approximately 10,000 circulars within a 5-10 mile store radius. The CPGs pay to be featured in the circular. Programs are seldom reimagined, with a “rinse and repeat” approach. Printed circulars are historically the most significant line-item investment.

 

Print circulars have inherent issues that cannot be resolved: (Over the years, they have introduced advanced retargeting, so while coverage is limited, precision can be realized}

 

• Coverage is limited.
• Inflation driving postage and paper cost increases.
• Personalization is highly limited.
• Difficult attribution/ROAS measurement.
• Complex and expensive testing.
• Planning horizons are long, making competitive positioning difficult.
• Many graphics are squeezed into a space, creating a chaotic look.
• Ecological damage/landfills.

 

In addition, the proprietary survey conducted by Undertone further underscores both the solid benefits and the limitations of printed circulars. Undertone found that:

 

Consumers enjoy browsing printed circulars. 68% skim through them, looking for items of interest. Another 21% like that print can be physically saved and put aside to look through later or held for someone else who might be interested. 71% find that at least some of the information in circulars is relevant to them. 2 in 5 consumers like the printed format because it’s easy to review and to bring with them when they shop…and shop they do. 40% visit stores once a week or more frequently, specifically to see or purchase an item they saw in a printed circular.

 

However, 49% of consumers would opt out of receiving printed circulars if they could. Additionally, 64% stated that their ideal way to learn about weekly deals is an alternative to the printed circular (email, online, video, TV, or in-store).

 

These results show that the winner in the weekly deals space will combine print and digital strengths by offering a highly engaging, personalized experience that provides relevant information to the consumer while driving store sales. (Survey conducted by Lucid for Undertone, March 2023. 1,500 respondents Ages 18-70).

 

While printed circulars suffer from some shortcomings in addition to their benefits, digital circulars are a perfect fit for retailers.

 

• Items are selected through heavy data-driven decisions, including critical signals from first-party data, third-party data, weather, stock levels, and others that select the offer dynamically.

 

• They are elegantly designed with an advanced, personalized structure.

 

• Offers run across multiple media formats (display and video) and all screens, including CTV/OTT.

 

• This solution provides a 50-75% cost reduction, demonstrably driving ROAS typically 10x to 19x.

 

• Digital creates no landfill issues.

 

• Personalization creates more brand relevance.

 

• “Awareness to performance” embedded in the ads allows for every step, from simple awareness to instant e-commerce solutions.

 

• Advanced attribution modeling confirms foot traffic to stores.

 

A single quote from Giant Eagle demonstrates digital’s rising importance: “At Giant Eagle, we are actively evolving alongside our guests to meet their unique interests with personalized savings opportunities. An important part of this journey is our continued shift to an enhanced digital shopping experience where personalization can be more easily achieved.

 

“Beginning on March 2, 2023, Giant Eagle will transition away from the direct household delivery of its weekly print ad in Pittsburgh. Instead, Giant Eagle guests can access the weekly ad by downloading the Giant Eagle mobile app, which also lets guests place grocery orders for curbside pickup or delivery, clip digital coupons, build shopping lists, and manage their available perks. Printed weekly ads will continue to be available in all Giant Eagle and Market District locations for any guest who may prefer a paper copy.“

 

Printed circulars can and should still play a role in the marketing mix. In fact, there is likely a promotional multiplier factor from combining the two; it is well known that exposure to different media drives better results. Therefore, we advocate a mix change. Specifically, Undertone believes the best way to test the thesis of this argument is to reapportion printed circular spending as follows, solely for example: if an organization is spending $100MM on printed circulars, the new approach should be to reduce print to $50MM, spend $25MM on digital circulars, and pocket $25MM as savings. Digital circulars cost less than 50% of their printed cousins. This distribution will have higher ROAS, drive more foot traffic and achieve revenue targets –while also increasing brand value with consumers.

 

About the Authors

Jillian Harris, Sales Director at Undertone, combines over a decade of digital and print media experience with a consultative and strategic approach to client partnerships. With extensive background in the grocery and retail space, Jillian has seen firsthand how successful campaigns are ones that are data driven, relevant, dynamic and able to be optimized regularly. Prior to joining Undertone, Jillian held positions at Vericast and Cordial with a focus on strategic client relationships. Jillian graduated from Michigan State University with a Bachelor of Arts degree in Advertising.

 

Daniel Aks is the President of Undertone, leveraging his broad operating experience in C-level roles for the information, education, & consumer media industries. For the two years before joining Undertone, Daniel was the CEO of Antenna International, where he led their successful turnaround by introducing new products, lowering costs, & building an innovative culture. He also served as COO of the Educational Records Bureau for the prior three years, where he increased revenue by 20%, introduced new assessment products, & reduced costs. Previously, Daniel served as COO/CoS of McGraw-Hill Education, where he led its reorganization & developed formative testing & data-driven instruction products. He also served as COO for Primedia Consumer Magazines & as President of its Internet Business, where he launched & led the pioneering digital business.

 

This article was originally published in RetailToday, authored by Daniel E. Aks, President, Undertone and Jillian Harris, Sales Director (Retail), Undertone

Keep Reading

Let’s unlock the possibilities of digital advertising

Connect With Us