Magazine article Editor & Publisher

Aggressive Newspapers Can Combat ADVO

Magazine article Editor & Publisher

Aggressive Newspapers Can Combat ADVO

Article excerpt

Direct mailer makes inroads into traditional newspaper ad markets, but some papers are reclaiming the business

GROCERY STORES AND newspapers have had a long-standing marketing relationship, but direct mail companies, particularly Connecticut-based ADVO, have been making inroads in markets such as Chicago and Southern California.

In some instances, when newspapers have fought back aggressively, they have won back some of the retail business initially lost to ADVO.

Dominick's, Chicago's second largest grocery chain with 86 stores, has switched its nearly $8 billion media budget out of newspapers and into direct mail preprinted circulars, delivered by ADVO every Thursday.

"We feel that direct mail is doing the job," said Rich Simpson, Dominick's spokesman. "We see that in increased activity in our stores."

In St. Louis, Mo., Schnuck's, the area's largest grocery chain with an approximately 34% market share, has been recruited by ADVO. Prior to that, the store had run most of its ROP ads with the St. Louis Post-Dispatch.

"ADVO is |successful' in St. Louis, but there are weeks when they are not," said Richard Sims, Post-Dispatch advertising director. The other leading three grocery chains will use ADVO occasionally, Sims said, but they have not been won over completely.

Southern and central California newspapers have borne the pain from Von's new partnering with ADVO. Von's spent $42.2 million on newspaper advertising in 1991, according to LNA/Arbitron Multimedia estimates. This year the 342-store supermarket chain has switched a good part of that money to direct mail.

In some markets, Von stores still use newspaper ROP ads to support the direct mail efforts, but in other markets all advertising is through direct mail.

Newspapers have managed to woo some defectors to direct mail back, however.

In California, Gene Grant, the, advertising director at the Sacramento Bee kept close contact with Safeway grocery stores during their three-month test period with direct mail.

However, what ultimately kept the store with the newspaper was an in-store customer poll the Bee conducted with the chain's permission.

Significantly, the exit survey found that customers came from a much larger area than the three-mile radius that the store believed made up its customer base.

"The classic direct mail pitch is that with newspaper ads you're wasting delivery by going to too large an area," Grant said.

What the survey discovered is, partly because of work-travel patterns, frequent customers came from all over the Sacramento area.

Sixty-eight percent of Safeway shoppers surveyed had read the Bee in the week prior to the survey. Only 9% had read the ADVO direct mail piece.

The survey also found that people liked to see the ads in the newspaper. Most said they liked being able to comparison-shop before they left the house. When the grocery store ads were all in the Wednesday paper, for example, it was very easy to plan the week's grocery list.

Of those who use grocery store ads, 74% said they preferred to see the ad in the newspaper.

Through analysis, Grant said the paper also proved to the store that, with preprinted inserts in the paper and TMC products, getting their message out was no more expensive than direct mail.

Safeway bought advertising in the Bee along with some suburban weeklies. …

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