As tough as it was for the media to pick the winners of the local elections, it seems all too easy for the U.S. Postal Service (USPS) to pick the best way for millions of Americans to receive coupons, pre-prints, and flyers.
Considering the number of advertisers that rely on preprint advertising to drive traffic to their stores, more research and consideration should have been given to the preferred delivery method.
Let’s make a deal
In August 2012, the USPS announced the approval of the Negotiated Service Agreement with Valassis Communication, which will drastically change the competitive landscape of pre-print advertising.
The Newspaper Association of America, representing 2,000 newspapers, filed an emergency injunction seeking to block the deal. But, due to the financial state of the USPS, the injunction was overruled.
In the three-year deal, Valassis would receive an additional discount after the weekly “Red Plum” package reaches 4 ounces and an additional million pieces are distributed annually. These discounts are payable as a year-end rebate.
This gives Valassis an unfair advantage over newspapers and other direct mail companies, based on the steep discounts compared to both TMC and the high-saturation programmes that newspapers pay.
What readers want
A few months ago, I was discussing this issue with a few folks from Civic Science, a data partner to many news media companies.
John Dick, CEO of Civic Science, pushed out a question through the company’s national network of news and blog sites. Between October 17 to 29, 2012, Civic Science surveyed 4,781 print newspaper subscribers in the United States about their preferences for receiving physical coupons and other offers, either by direct mail or via newspaper insert.
As you can see from the graphic below, those print readers who are interested in physical coupons prefer to receive them “in a newspaper insert” versus direct mail by a margin of 2 to 1. The margin of error in a sample of this size is less than 1%.
Participating respondents were also analysed based on a number of demographic, geographic, socio-economic, and consumer profile characteristics, revealing some clear correlations among the population.
When divided into one of four U.S. regions, we found significant differences.
Print subscribers in the U.S. northeast (at 61.7%) are most likely to prefer coupons by newspaper insert, with those in the midwest a close second (at 60.1%).
Residents of the U.S. west were least likely to prefer coupons by newspaper insert but still came in at more than 50% of the total respondent sample in that region.
The primary differences in the U.S. west and U.S. south stem from a greater likelihood that print subscribers have no interest in any form of physical coupon or deal in those regions. Among those with an interest in physical coupons, the greatest disparity was found in the U.S. west, where 22.8% of respondents prefer coupons by direct mail.
When looking at the key demographic traits of print readers, we found subtle but statistically significant differences across a few categories.
Overall, women are 8% more likely to prefer coupons via newspaper insert, while men are 19% more likely to have no interest in physical coupons of any kind.
The biggest correlations can be seen across age categories.
Overall, interest in receiving coupons by newspaper insert peaks at 62% among print readers between the ages of 45 and 64 and bottoms out at 52% among respondents aged 25 to 29. Interest in receiving coupons by direct mail peaks significantly at 39% among respondents between the ages of 30 and 34 and bottoms out at 20% among respondents over the age of 64.
Lack of interest in any kind of physical coupons is highest among print readers aged 25 to 29 (at 21%) and those over age 64 (at 23%).
Another determinant of respondent choice emerged based on the household income of print readers.
Respondents making between US$50,000 and US$100,000 annually show the highest level of interest in coupons via newspaper insert at 62%, while those making more than US$125,000 annually show the lowest level of interest at 45%. Interest in direct mail coupons is highest among readers who make between US$35,000 and US$50,000 per year, at 33%, and those making more than US$125,000, at 29%.
One additional observation found that respondents who identified themselves as married were 7% more likely to prefer coupons via newspaper insert and 14% less likely to prefer direct mail than non-married respondents.
Perhaps most telling is the coupon usage data at the bottom of the graphic above. Here we crossed the physical coupon question with an additional question, where respondents were asked about their current overall usage of coupons to save money while shopping.
More than 40% of those who say they are using coupons now “more than usual” preferred receiving coupons via newspaper insert, a full 25% more likely than any other group.
Your move, newspapers
First, educate your advertisers on the value of newspaper inserts. Use the infographic below, or e-mail me if you want a version with higher resolution.
I normally do not recommend a specific vendor, but when I called and explained what was happening to the team at Civic Science, they responded. They will be a good partner for many media companies, especially if you have specific questions on this type of data for your market.
Don’t stop fighting the USPS. There is no reason the rules and rates cannot change, especially if there is an outcry from the public.
Dig into the data on your audience and how they are shopping, and communicate via e-mail and in person the benefits of advertising in the newspaper instead of the trash can.