Few Put a Premium on Giveaways in U.S

Article excerpt

In Europe and Latin America, the promotional products that Mediasat Group offers newspapers practically sell themselves. Every couple of weeks, the Madrid-based company announces another newspaper premium campaign, from encyclopedias offered by Le Figaro in Paris to a collection of DVDs on world history by El Universal in Mexico City. Competing newspaper premium marketers like Spain's Grupo Planeta and Belgium's Paperview are just as busy.

Then there's the explosion of music CDs and movie DVDs given away in the tabloids and "quality" papers of Great Britain and Ireland. The Economist magazine reported earlier this year that U.K. newspapers are spending as much as $1.5 million each to give away DVDs in weekend papers -- and reaping a single-copy sales spike of as much as 20% of normal circulation.

Yet when sales manager Juan Carlos Huertas returns to Mediasat's Miami office, he's as lonely as the Maytag repair man in the classic TV commercial. When he talked with E&P in February, he said the company had just placed premium campaigns in 15 Brazilian papers: "But North America, not yet. This is a new model for them."

Mediasat's Miami office is intended to be the company's beachhead to conquer North America's newspaper market. Paperview has established a similar outpost in New York City. It's safe to say neither has set the world, or at least North America's part of the world, on fire. So far, Mediasat's only success is a 2004 campaign in the Vancouver Sun that the paper's marketing director says was probably too much of a good thing.

If a U.S. paper does a single-copy premium promotion these days, it's usually a special price for a newspaper and cup of coffee down at the 7-Eleven. How is it that the elaborate premium campaigns to build circulation numbers and revenue that are so popular abroad are such non-starters here?

One obvious answer is that single-copy sales are far more important in Europe and, especially, in Latin America, where home delivery is virtually unheard of. North American publishers simply don't feel the need to one-up competitors with premiums, says Mike Smith, executive director of the Media Management Center at Northwestern University.

"If you remember the Bingo/Wingo craze of the late 1970s and '80s, most of that was done because of competition," Smith says. "And you can be sure that in Britain, several of the papers wouldn't be giving away DVDs and CDs of Christmas carols if the other guy wasn't doing it."

Even apart from the competition factor, says John Murray, vice president/circulation marketing for the Newspaper Association of America (NAA), "There are a lot of reasons to believe that when it comes to adding incremental growth to circulation, the investment that Latin America and European publishers are willing to make is greater than in the United States. …