Next wave custom pubs: the new black

In the fall issue of the new magazine Belle, fashion fanatics are told that orange is the new black and vintage accessories are hot.

In the fall issue of the new magazine Belle, fashion fanatics are told that orange is the new black and vintage accessories are hot.

Oh, and they can also get the superbly styled merchandise at The Bay. More specifically, The Bay uses Belle to lure new shoppers to specific stores, routing customers they’ve identified as desirable (loaded) to locations they’ve identified as in need of traffic.

In essence, The Bay, along with RBC and Kraft, are cluing into the fact that custom publishing is no longer just about building brands; it can be tied to specific goals that enhance a company’s bottom line. The best part? It’s measurable.

These marketers are using an editorial approach to deliver on a slew of worthwhile objectives: building closer relationships with existing customers, tracking down new ones, showcasing product intros and teaching folks how to use existing stuff in new ways – all without ramming the info down the consumer’s throat.

‘When it’s done well it enables a rich dialogue between consumer and brand,’ says Jill Nykoliation, partner at Toronto-based agency Grip and until recently, director of CRM for Kraft Canada, which owns what’s cooking magazine. ‘You’re able to customize it to the unique target group. That’s powerful.’

The Bay apparently thinks so, even though custom publishing hasn’t been so powerful for the Toronto-based retailer in the past. About seven years ago it conceived a short-lived mag called B. But Belle is more likely to survive for a couple of reasons, says Gord Sonnenberg, VP marketing. For one thing, the retailer no longer has the same level of competition for national and designer brands (RIP Eatons), but also thanks to a well-developed CRM strategy – honed via HBC’s Rewards program – ‘we have a very fine customer loyalty database that allows us to speak to the customer directly.’

Published by Fuel Advertising, the quarterly glossy dropped 325,000 copies on doorsteps across Canada in September. But not just any doorsteps: only those belonging to high income, style-conscious women aged 45 to 55. The Bay has instituted both a retention and acquisition strategy for Belle: while HBC Rewards members who fit the bill will get a subscription to keep them shopping, certain geographic locations – think perfectly manicured lawns and flashy SUVs in the driveway – have also been targeted.

‘Belle was a natural next step when you consider that after we were able to identify the various consumer segments we had to determine how to talk to those segments. We could have sent a postcard, or a flyer without the editorial, but we feel that this particular customer appreciates the advice and the trend info,’ says Sonnenberg. Right now, Belle isn’t ‘customized’ further, but Sonnenberg says the ability is there for the future.

Affluent women aren’t the only Bay shoppers receiving a free magazine. Living Spree, which launched a year ago, is geared at a more moderate customer who frequents all HBC banners. ‘Spree is more family-oriented and less focused on fashion and style specifically,’ explains Sonnenberg, who adds that 500,000 of Spree are mailed quarterly.

Sonnenberg sees both mags as a more efficient way to communicate to consumers. ‘A mass vehicle would go out to millions of people, but only a small percentage may actually act on it at any given time. These vehicles have a far greater return on a per capita basis.’ Sonnenberg says custom publishing is less than 5% of The Bay’s marketing spend – but adds that it’s a component that’s growing.

The pubs are also easier to track.

For instance, Belle contains a page of offers, and response can be measured through sales transactions; not to mention most recipients of Belle will likely use their loyalty card at P-O-S, making it easy to analyze their behaviour.

The combined customization and accountability advances are triggering a new flood of magalogues. Since 1999, spending on custom publishing in the U.S. has increased by 80%. Eric Schneider, president and CEO of Redwood Custom Communications has seen his client roster grow from one company five years ago to 14 currently. He points to

well-recognized factors as drivers of the trend: media fragmentation, PVRs, and the evolution of privacy legislation.

But, here’s the key: ‘We’re getting more and more sophisticated in our ability to measure the impact of the publications.’ In fact, a year ago, Redwood introduced a new division called Redwood Data. Its functions are to build measurement systems around targeting and deal with the related analytics, such as how behaviour is shifting within segments.

For five years, Redwood has delivered targeted campaigns for Kraft Canada, particularly through what’s cooking. Info on consumers is collected through a survey, which then allows Kraft to personalize the pub. Nykoliation says twice the number of people read an editorial versus a standard ad form, and that readers spend an hour with the book on average.

‘People have given you permission. In some cases, they’re waiting to receive this. At Kraft, we had phone calls asking for it.’

Schneider says the cost of one custom pub issue would be similar to buying a dozen 30-second TV spots. ‘[The commercials] equal about six minutes of audience exposure. The average custom magazine is read for more than 20 minutes…so all ROI and CRM measurements have entirely different cost implications and expectations.’

In summer, Redwood added another client: RBC. The Toronto-based bank launched its own custom pub, called life, etc. specifically targeted at its Visa loyalty members. Beyond getting a leg up on the increased competition in the loyalty credit card market, VP marketing communications Richard McLaughlin cites another purpose for life, etc.

‘When we launched CRM several years ago, the single biggest complaint about financial institutions was that we treated clients like numbers. life, etc. is demonstrating our knowledge of who [our customers] are.’

At this point, the book isn’t customized, ‘but we have a great database that will allow it as we move forward,’ says McLaughlin. For instance, members who prefer a certain type of product, say travel related freebies, will likely receive a magazine focused on such rewards, says McLaughlin.

He adds that Life, etc. is still in test phase, with only a few hundred thousand in the marketplace, but implies those numbers could easily grow into the millions. RBC is measuring spending and redemption patterns of consumers who receive life, etc. versus those who don’t.

Be that as it may, the bank did add a mechanism to its first issue: It asked consumers to give feedback via a short online survey and promised to publish the best results in a future issue. The bank received a 5% response rate, and of those, half of respondents gave it permission to communicate to them via e-mail, two-thirds said they felt valued and preferred and 40% checked their point balance online, a key metric because the suggestion is that they will redeem in the future.

But RBC can only be successful if it approaches its custom publishing gig carefully. Nykoliation says it requires a delicate balance between branding and content. ‘Marketers typically lead with brand, but in a custom publishing world, you lead with content and brand comes in as it’s appropriate. It’s crucial because once a consumer feels you’re pitching to them, they receive the information as more of a traditional sell.’

In other words, she says, some of them may lose interest.

Behind the idea

RBC’s life, etc.

Rachelle Lalonde, the marketing manager for RBC Rewards, was in her senior manager Rosalie McGovern’s office discussing a newsletter. She noticed a slick magazine on the table and at the end of the conversation, she picked it up, flipped through and at that point realized it was no ordinary mag – it was a

marketing vehicle for Volvo.

‘We were commenting on how nice it was and then we talked about Kraft’s [what's cooking] and the LCBO’s [Food & Drink]. It sounded like a neat idea for RBC Rewards because [the brand] is also very lifestyle-oriented.’

Lalonde then wrote an extensive research document – after speaking about business objectives and results to companies who have used custom publishing. ‘We saw how we could use it to affect cardholder behaviour through the power of editorial,’ she says. She then created a business case, which gained approval, and the rest is history.

Richard McLaughlin, VP marketing, says this kind of reaction is a way of life for RBC employees, as they are encouraged to look beyond the Big Five for marketing ideas. ‘We want to get people thinking outside of the comfort zone – it’s too easy to do what the other financial institutions are doing,’ he says.