Merchandising '88: The Competitive Edge

Article excerpt

Merchandising '88: The competitive edge

Asked to name one of the most frequent, pressing and challenging advertiser requests, many publishers would unhesitatingly point to merchandising services.

As competitive pressures have intensified, the importance and use of merchandising have mushroomed. Competition comes not only from the vast array of new magazines on the scene, but also from the proliferation of alternative media--radio, TV, video, teleconferencing and even seminars--that are being used to reach specialized audiences. Companies today have more ways than ever to spend their ad dollars--and magazines are only a part of the marketing mix.

Advertisers are also becoming more sophisticated in their approach to advertising and marketing. Aware that publishers can offer a great deal more than simply advertising exposure, more companies are basing ad decisions on what additional services a magazine will offer. Larry Burstein, ad director of New York, says that customers ask for merchandising on almost every call he makes. "They don't always use it, but they want to know we'll offer it."

"Merchandising is becoming more standard," says Les Zeifman, associate publisher of Rolling Stone. "The environment has become more competitive. People are negotiating for rates far more than in the past. For magazines like Rolling Stone that won't go off the rate card, value-added service is critical. It tells advertisers that while no one else is getting a better rate, they're still getting added value for their investment. We think that's a far more constructive approach than negotiating discounts."

Michael Hyman, promotion director, Gralla Publications, agrees. "Rate cutting and giving free ads tarnish the image of a magazine. Once you cut rates, where does it end? The entire industry enters into a bidding war. To compete with discounters, we give meaningful merchandising help. These programs are remembered a lot longer than cheaper prices."

"Added value" is the new term being used to describe what merchandising is all about.

"Merchandising is anything that gives extra impact, exposure and audience reach to an advertiser's product," says Hyman. "It offers added benefits and value for the advertiser," notes Joanna Dales, promotion director for Better Homes and Gardens. Nancy Kadner of Rolling Stone views merchandising as "a second impression, almost. Something that gives advertisers more for their money. Another way to reach customers with an ad image and message." Al Luthy, publisher of Meetings and Conventions, sees it as "something that brings advertisers and their customers--buyers and sellers--together."

While publishers vary widely in the types of merchandising programs they do and the contributions they offer, most agree on merchandising's increasing value to their growth and success. Nevertheless, some are violently opposed to it because they view it as a free service, sponsored and underwritten by the magazine. They fear that if they highlight their additional services, they'll be asked to implement costly programs that will drain their bottom lines. In their eyes, merchandising is an expense--not an investment in their magazines.

In fact, magazines differ significantly regarding the terms of such programs. While some offer these services free of charge, others expect advertisers to incur most or all of the costs. Merchandising programs may be paid for by the magazine, by the advertiser, or by both parties.

Most magazine ad sales people agree that merchandising services should be given to current advertisers only--not prospects. New York's Burstein is adamant about this practice. "We never offer these services to prospects. We wouldn't even start a conversation under those circumstances."

In some instances, however, consideration is given to especially important and promising prospects. Karen Thomas, promotion director for Essence, says that she must occasionally make proposals to prospects in conjunction with a proposed ad schedule. …