TV Fanfare Publications : Making Big Business From Small Ads

After complaining about the glare from the artificial lights in his office, Phil Rosenthal, president of Chatsworth-based TV Fanfare Publications Inc., donned his prescription sunglasses and told his guests: “These are for my eyes; I haven’t gone Hollywood yet.”

Maybe not. But the glare of success is certainly on Rosenthal, 53, and his band of sales executives. They have carved out a lucrative niche selling $10-a-week ads to mom-and-pop businesses that most experts had considered too small to afford such a marketing luxury.

The beauty salons, dentists, banks and other local merchants solicited by Rosenthal and his crew seem to think highly of TV Fanfare’s two unassuming TV program guides, which are distributed free at supermarkets, drugstores and other retail outlets. The mushrooming number of ads they place in the publications has helped TV Fanfare grow from a $2-million-a-year business with 75 workers 12 years ago to a $40-million enterprise with 715 employees.

Founded in 1951, TV Fanfare was purchased in 1960 for $25,000 by California entrepreneur Ben Cooper, who was intrigued by the concept of publishing a television guide in Southern California. But it remained a relatively small enterprise until 1973, when Cooper hired Rosenthal, a down-on-his-luck promoter who said he lost his shirt trying to market broadcasts of videotaped sports events to bars.

Doubled Client Base

The brush with insolvency, however, apparently inspired Rosenthal to hone his sales acumen. After joining TV Fanfare as a salesman, Rosenthal rose quickly through the ranks and more than doubled TV Fanfare’s client base to 100,000 advertisers. Cooper sold the company to Rosenthal last year for about $7 million.

The two guides published by TV Fanfare are distributed free at about 95% of the major supermarkets across the country. Advertisers currently pay about $520 a year for 12 appearances of their business-card-size ads in TV Fanfare’s full-color, eight-page Sports & Soaps TV guide, which is distributed in California, or its companion TV Movie News guide, distributed nationwide.

The guides contain photographs and brief descriptions of coming movies, soap operas and sporting events on cable and network TV, plus a crossword puzzle and monthly recipe. The local supermarket, which has its address and name printed on the front of the guides, is paid about $1,500 a year to distribute the publications, Rosenthal said.

Although all 3.5 million copies of TV Movie News are printed and mailed from TV Fanfare’s Chatsworth plant to stores in the 48 contiguous United States, and another 750,000 copies of Sports & Soaps are mailed to stores in California, the 10 individual advertisers in each issue are published in only 500 copies of each guide because TV Fanfare prints different editions for each of the 10,000 locations where the guides are distributed.

Military precision is necessary to keep from botching the complex job because the company’s seven offset presses run virtually non-stop.

First, information appearing in all the guides--the cover, TV highlights and crossword puzzle--are printed on long sheets of paper, two weeks in advance of actual distribution. Then, after the advertising is sold, the presses are started again to print ads for each edition. Finally, the guides are put through the presses a third time just hours before they are mailed to update movie listings, said Vic Parker, director of publications. The guides are then boxed and sent to retail outlets by express mail service.

Company officials declined to estimate how large the advertising market of small local businesses might be. But many experts believe that the potential market is vast.

The nation’s Yellow Pages phone directories, for example, which serve much the same kind of advertisers, collected about $4.5 billion in revenue in 1984, making them the fifth-largest advertising medium behind television, newspapers, radio and magazines, said Fred E. Smykla, executive director of the Troy, Mich.-based National Yellow Pages Service Assn.

Yet, despite its modern 30,000-square-foot plant, which is crammed with computers and printing presses, and its network of 28 sales offices nationwide, TV Fanfare is something of a relic in an increasingly sophisticated advertising world.

No Reader Survey

While television, magazines and daily newspapers constantly survey consumers to get a more precise fix on their audience (such as household income and buying habits) in order to woo advertisers, Rosenthal says he doesn’t really know who TV Fanfare’s readers are. His supermarket distributors tell him most of the readers are women. But he said his company has never commissioned a reader study to find out if that’s true.

But Rosenthal defends the selling power of his publications.

“We are not in a position to give them (advertisers) the type of demographic data that national advertisers require,” Rosenthal said. “But our track record speaks for itself--50% of our advertisers are renewals.”

Rosenthal added that, unlike unsolicited promotional mail and free neighborhood shopping guides, “we are invited guests in the homes of our readers. People pick it up of their own volition and keep it in their house for a month. It’s not junk mail coming in uninvited.”

But small businesses are becoming more sophisticated about spending their advertising dollars as more media compete for their advertising business, experts say.

For example, San Antonio, Tex.-based Harte-Hanks Communications Co.’s 23-year-old Pennysaver publications--which rival TV Fanfare Publications in circulation and annual revenue--routinely conduct demographic surveys in order to persuade small businesses to advertise in their publications.

“The lower end of the market is an enormous market that is not well served by traditional print media,” said Harry Buckel, president of Harte-Hanks Direct Marketing Co. of Southern California. “Increasingly, these small advertisers are becoming more demanding and want to know the characteristics of the reader they are reaching.”

Compares Favorably

TV Fanfare advertiser Ralph Langley, who sells carpet, tiles and draperies in his store in Upland, said TV Fanfare compares favorably with other advertising media.

“I’m in 16 markets with TV Fanfare, and I’ve been amazed that we are selling so well in all of those areas,” Langley said. “A lot of advertising I don’t feel good about. I tried direct mail and I didn’t get any response. . . . I know these customers are coming from the people who pick up (TV Fanfare’s) guides in the supermarket.”

Some other advertisers aren’t convinced.

“I have not had much response in the first six weeks,” said Alfonso Bautista, owner of a Video Biz videotape rental franchise in Pasadena. “This is our first time with them (TV Fanfare), but so far the Yellow Pages seem to have been more effective.”

Still, Rosenthal plans to forge ahead with the toehold he’s gained in the nation’s supermarkets. He plans to expand the Sports & Soaps guide nationwide this year. He also will inaugurate community bulletin boards in grocery stores that display shoppers’ classified ads as well as advertising from local retailers.

The advertising blitz on the nation’s supermarket shoppers prompted one observer to dub Rosenthal the “king of the shopping cart set.”

But Rosenthal is typically unnerved by the moniker: “I would not call us ‘king of the shopping cart set,’ ” he said, laughing. “King of the supermarket in-house advertising market, maybe. I like that better.”