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If Print is Dying, Why is Circular ROI Increasing?

Download  the below in a 1-page whitepaper on circular ROI.

There’s been a lot of noise in the advertising industry about the impending death of print as an advertising tactic, and it’s certainly hard to argue with ongoing circulation declines from data at ABC and NAA.  However, the ROI on circulars is actually increasing.  Why?

It really boils down to three core reasons:

1) Spend is “Desaturating”
By any name, circulars, inserts, FSI, and flyers, have always commanded an outsize portion of retailer marketing budgets.  There are plenty of reasons for the high spend including justifying vendor funding, the lack of alternatives for price/item messaging, matching last year’s impacts, and others.

And as with any marketing spend, there is a point of diminishing marginal returns which means that any time you increase spend, the new dollars do not work as well as the prior dollars have.  Conversely, when spend is reduced, the average performance actually increases.   In the end, as retailers reduce spend, they’re doing so smartly and cutting the least effective dollars.

2) Costs are Falling Faster than Effectiveness
All else equal, if you’re getting the same impact for lower cost, ROI will increase.  For most of our retail clients effectiveness continues to slowly decline, but costs are falling faster.  The net effect is a moderate tailwind to circular ROI.

3) Retailers continue to optimize
Optimization of the products featured is a journey, not a destination.  We’re seeing retailers applying a lot more rigor in this area, and getting very sharp in their decision making.  We’ve helped them optimize across everything including product allocations, print format, day of week dropped, size, page count, depth of discount, etc.

So regardless of what you believe is the future of print advertising writ large, today there are still high-ROI opportunities for well-executed circular advertising.  Let us help you measure the true effectiveness of your circular- contact us here.

PS:  For an demonstration on how we net out the effects of cost changes, effectiveness impacts, and saturation, see this earlier post.

 

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