Small companies obviously don't have the ad budgets of giants like Procter & Gamble (PG) or Ford (F), but they still need to get the word out about their products and services. BusinessWeek's Kimberly Weisul spoke recently with Jeff Jacobs, an advertising-industry veteran and executive vice-president of marketing and planning for ad agency Meridian, about how smaller companies can best use newspaper circulars to attract business.
Q: Which types of companies should consider advertising in circulars?
A: Circulars work really well to build traffic for retailers. It's probably the best traffic-builder that exists. Some traditional consumer-goods companies use it for coupons, but they're still using those coupons to build traffic.
Q: How do circulars compare to other forms of advertising?
A: In terms of building traffic and sales, circulars are superior to both. That's proven. Newspaper ads are second. Then radio, television, direct mail, and outdoor advertising. Radio is probably the next-closest competitor to circulars. The advantage to radio is that if you need something on the air tomorrow, you can get radio done.
Radio can be really appealing because someone will say they can get you 30 spots for $1,000, and a newspaper ad might cost $2,000 for a full page. But radio just doesn't get the same amount of attention and inspection that newspapers do. The Newspaper Association of America would tell you that two-thirds of the population gets a weekend paper, and half read a daily paper. To get that reach in radio takes a lot longer and a lot of spots. Just because you get 30 spots on the radio doesn't mean everybody hears it 30 times. You have to do reach-and-frequency analysis and figure out how many spots you have to run to get a certain percentage of the population a certain number of times. Radio does give you the ability to skew a little younger.
A: What should a circular look like to succeed?
Q: The cover should engage the customer emotionally. This could be done with a great appealing picture, a great, appealing headline, or, if you're a dollar store, it could be a great deal. You need to understand what it is your customers want from you. If you're an upscale outdoor sporting-goods store -- if you're selling climbing equipment to go to Nepal -- you might have a cover of someone on Everest with all those flags flapping. If you're a clearance place, you might have a cover with a pair of snowshoes for $29.99.
Q: How often do you need to run circulars to get your message across?
A: You do need some frequency, although you may not need one a week. People generally need to see a message three times before they respond to it. If you have a comprehensive advertising program already going, you may benefit from fewer circular insertions. If circulars are your whole effort, you'll have to be there a few weeks before it registers.
You're more likely to see your returns marginalize if you run too many pages at once, rather than running too often. And understand that you'll get bored with the advertisement before the customer will. You started seeing it three weeks ago, when you started putting it together, so you're tired of that message. Your customer saw it once. If your message is about price, you're showing best value in the store for the week. The highline sporting-goods guys might have ice picks with Everest one week and parkas with the Matterhorn the next.
Q: What mistakes to people make in designing their circular?
A: The most frequent mistake is to fill the pages with everything you've got on sale. There is a limit to how much information people can digest.... If you've got a 24-page circular, after the first few pages, if you get five to six seconds [of the reader's attention] per spread, you're doing really well. If you want to send out a catalog, call the Postal Service. If you're looking for a traffic-builder for a store, don't overwhelm people. Give them a great reason to come in.
Paper stock makes a difference. Cheap paper means a cheap business. Better paper, a better business. If you're running a one-sheeter, it should be a little heavier than if you're doing multiple pages. Don't use less than 35- or 38-pound paper.
Q: How do I produce my ad?
A: Producing an insert for a circular takes a little more planning than many other kinds of advertising. First get the requirements from the newspaper, then start from date you want your ad inserted and start backing up. You should count on at least a week for design and approval, a week for printing, and then it'll need to be at the paper a week before it runs.
Q: How much is this going to cost?
A: The cost has three pieces. First is whatever it costs to develop the ad from a creative standpoint: layout services, writing copy, photography. Second is printing costs. They're all over the map. Third is insertion costs. Those costs should be very competitive, compared to what it costs to advertise in the newspaper itself.
Q: How do I know if my insert actually worked?
A: You can put an offer in the ad to measure how many people come in as a result of that offer. To understand what return we're getting, we also measure sales the week before the ad, the week of the ad, and the week after the ad.