Our Database Says You’ll Read This Column
If you need a stiff drink before reading this column, go pour one. Of course, the folks at Seagram Co. already have a pretty good idea who you are. And they’ll prove that in this month’s issues of Newsweek, Atlantic and U.S. News & World Report.
If the marketing gurus at Seagram suspect that you’re a drinker--or are a likely candidate to buy one of their distilled spirits--you’ll be seeing Seagram’s ads in your February issues. But if their research tells them that you’re a teetotaling subscriber, don’t expect to see their ads.
Can this be possible? You bet it is. Beginning this month, for the first time on a large scale, a major advertiser--Seagram--will test the ability of a handful of national magazines to selectively place its ads only in those issues subscribed to by likely buyers of its liquor.
For marketers, this means more efficient and less expensive advertising. For magazine publishers, it means a new way of doing business that will likely translate into smaller ad revenue in the short run, but broader interest by a larger number of advertisers in the long run.
And for consumers, this means marketers are watching more closely than ever whether they eat Wheaties, collect colorized movies or take frequent trips to Toledo. The results will increasingly show up in the sort of advertising that appears in home-delivered publications.
“It’s a little like going to the track and placing a bet on a horse you know something about,” said Joe Plummer, executive vice president at the New York ad agency D’Arcy Masius Benton & Bowles. “You improve the odds.”
How does Seagram get this kind of personal information? Officials there declined to return phone calls. But typically, this kind of information is gleaned from elaborate databases on consumers who order from catalogues, telephone toll-free phone numbers, send for special premiums, or even fill out questionnaires when renewing magazine subscriptions.
The nagging question is: Are magazine advertisers and publishers getting too nosy--or are they just doing what they have to do to compete? “No one wants to get involved in an invasion of privacy,” said James R. Guthrie, executive vice president of marketing at the New York-based Magazine Publishers of America. “But there is no doubt in my mind this is the direction that magazine publishing is going.”
This is just the beginning. Before the end of the decade, marketing experts say, many of the advertisers in major national magazines will do individualized advertising regularly. And within 20 years, they say, most of the advertising placed in each issue of every major magazine will be targeted specifically to narrow groups of subscribers.
“The object is to reach the most likely buyers at the least cost,” said Manuel Plotkin, a Chicago marketing consultant and former director of the U.S. Census Bureau. “You can reach everyone by sending material to 250 million Americans, but you’ll go broke doing it.”
For Seagram--whose brands include Chivas Regal and Martell cognac--the move is an attempt to better focus the $30 million it spends annually on magazine advertising. Magazines have been increasingly losing business to marketers who mail information to consumers directly. But now, if magazines can get that same information into the hands of the same target audience--for less money--that may help boost magazine ad revenue, which declined 3% in 1991 compared to 1990.
“It’s a question of mass versus class,” said John Hirschboeck, president of Team One Advertising, which creates ads for Lexus cars. “The mass markets are not as attractive any more. With all the technology available, class has become far more important to marketing.”
Marketing executives in all industries are watching Seagram’s efforts with a keen eye. Sneaker maker Reebok, for example, advertises heavily in specialty magazines aimed at runners. But its largest market is avid walkers--few of whom subscribe to the enthusiast publications.
“Seagram may well be on to something,” said Ford Ennals, senior vice president of worldwide marketing at Reebok. “We miss a lot of people with our current advertising.”
Spokeswomen for the tobacco giants Philip Morris and RJR Nabisco said their firms are now looking into such specialized advertising.
Some specialized magazines have previously attempted the kind of individualized ads that Seagram will test this month. The results have generally been successful--and a majority of national magazines have at least tested the targeted ad format. “It’s out in the marketplace now,” said Fred Drasner, president of U.S. News & World Report. “We have to be flexible.”
The magazine industry’s first test came 1984, when the trade publication Farm Journal sent 8,896 versions of the same magazine to its nearly 1 million subscribers. Subscribers who were hog farmers received different advertisements than dairy farmers. And several years ago, American Baby started to give advertisers the opportunity to advertise to subscribers who were expectant mothers--or those who had recently given birth.
More recently, Time, Sports Illustrated and People have offered advertisers the opportunity to reach readers who have recently moved--or who frequently respond to mail-order requests. Advertiser interest in these niches has been keen.
But not everyone is enamored with the concept. “We’re not going to do it,” said Richard McEvoy, senior vice president at Carillon Importers, which imports Absolut vodka. “It sounds like a good idea, but you won’t bring in new customers if you only advertise to old ones.”
Briefly . . .
CBS is holding a “fire sale” for unsold Olympic ad slots, with prime-time 30-second spots that were originally priced at $250,000 now selling for $150,000, reports Advertising Age. . . . One key question remains unanswered in Pepsi’s third multimillion-dollar linkup with singer Michael Jackson: Will the Gloved One ever take a swig of the soda? Pepsi won’t say. . . . Layoffs may be on tap at DDB Needham Retail/Los Angeles, which has merged with DDB Needham Worldwide’s L.A. office to form a single operation. . . . The Los Angeles office of McCann-Erickson has won the Beverly Hilton’s advertising business and the domestic ad account of the Agfa Motion Picture division of Miles Inc. . . . Team One Advertising of El Segundo has won the $5-million Beech Aircraft account for its Starship aircraft and the $750,000 tennis division ad account of Japan-based Yonex Corp. . . . Mexico has opened a review for an ad agency and a direct marketing agency. . . . Vogel Communications Group of Los Angeles will handle marketing for Cal State Long Beach and Golf University, San Diego. . . . Gemstar Development of Pasadena, marketer of VCR Plus, has narrowed its $5-million account review to four Los Angeles agencies and expects to select one in March.
