Tip of the Week

Business SMART:	How Do I Reach More Customers?
	By: Dennis A. Conforto Chairman & CEO of A-Z Media Group, Inc.

Over the next few issues I want to address some of the marketing and advertising questions that manufacturers ask me about. Manufacturers want to know how they can reach a larger audience; how they can advertise more frequently; how they can grow the mind share of their brand, and how they can end up with more dollars of the consumer’s market share. Let’s start off today’s discussion with reach, and how does one reach more consumers for their scrapbook manufacturing business? This is an issue that faces not only manufacturers, but retailers as well. For the most part, manufacturers have done a good job of getting their brand name out to the trade, but not as good of a job of getting their name out to the consumers. Because of this, over 99% of the scrapbooking manufacturers are trade brands and not consumer brands at all. What can a manufacturer do to dramatically increase the number of consumers they reach? Right now the scrapbooking manufacturers spend a combined total of about $8 million in advertising dollars on print magazines that are geared toward the industry consumer and retailer. There is a catch to that level of spending: the largest consumer trade magazine has less than 225,000 subscribers. About 20% of those subscribers are people in the industry - retail store owners, manufacturers and distributors. These are neither the real consumer nor market place. That reduces the number of real subscribers to about 180,000. There are newsstand sales that bring the number of consumers reached to about 250,000. What you may not know is that there are another 80,000 magazines that are printed and then destroyed at the newsstands because they did not sell. This destruction process is a common event within the printed magazine industry but little known to the everyday consumer and advertisers. What is interesting is that these facts are ignored because what magazines love to talk about is readership and readership numbers are pure baloney. Readership numbers are pulled out of the air and can’t be proven. The relevant numbers to a manufacturer are the subscriber base and quantity of newsstand sales. The dilemma for manufacturers is simple. Is spending $8 million in collective advertising for 250,000 consumers worth it? We now know the scrapbooking community is 4.5 million women strong. So let’s ask the question a different way: Is spending the majority of the manufacturer’s advertising dollars on less that 5% of the total community SMART? I think not. If a manufacturer pays $6,000 for a full page ad in a trade publication it works out to be about to be about a $24 cost per thousand or CPM, ”M” being the Roman numeral for thousand. If you think of what the CPM number value is for the all the manufactures combined for 250,000 consumers it’s a staggering $34,000 CPM. Just to give you an idea how far off this is if the industry were to spend $8.5 million on TV the CPM would be on average about a $6 CPM and would reach nearly 1.5 million consumers or nearly 6 times the number of people we reach today. The problem is simple: the trade magazines shouldn’t be at a subscription rate of less than 5% of the known market; they should be at 50% of the consumers or about 2.25 million subscribers. The question everyone needs to ask is, “Why aren’t the trade magazines getting above the 250,000 subscription level?” And what about the most important part of the market place, the new scrapbookers, who really don’t know about the consumer magazines? The goal for manufacturers is to capture the new scrapbookers and convert them to your brand before another brand does. If a manufacturer waits until the consumer becomes an expert, the window of opportunity to be a leading consumer brand might already lost. So why would a manufacturer knowingly spend so much money on the same few 250,000 subscribers? The answer is they would never knowingly do that. So why don’t they know or see it? Well that answer varies, but the most frequent reason is that most manufacturers don’t know of a better way to more effectively spend their money. And while it may not be a not a good buy for a full page ad at $6,000; it’s a good buy at a half or quarter page ad if you measure advertising by CPM which, in the end, is cost vs. reach. Now this all begs the question of where a manufacturer can best spend their marketing dollars. And the answer is any place where they can get a lot of reach and frequency of their message to a large targeted audience of beginners to scrapbooking. Why are the beginners so important? Because every study shows that 50% of them never make it to become intermediates and 40% of the intermediates never make it to become experts. This means that most of the crafters today never make it to the expert level where they spend the most money. Capturing that beginner market is the key to any manufacturer’s success. No other publication does a better job of reaching a larger audience than Scrapbooking.com Magazine. Consider the following six facts: 1. They own the industry name “Scrapbooking.com” 2. They are the number one scrapbooking website in the world according to Google with over 1 billion hits in a single year 3. They are free to their readers wherever they may be 4. Their readers are in over 100 countries world-wide 5. They write articles that appeal to all levels of scrapbooking experience 6. They update the monthly magazine with new content weekly The nice thing for manufacturers is that the opportunities on Scrapbooking.com Magazine are so versatile. You can have an ad that shows a 60 second demo. You can’t do that in a traditional paper magazine. You can change your ad several times during the month without talking to anyone because they can pull the ad from your website, giving you complete control. All of the ads are placed next to the content that fits that manufacturer; nothing is more powerful than ads placed next to matching content. Best of all, one can measure performance and not wonder how effective their ad is. Media buying is all about media mix, matching the cost to the reach and calculating its value, measured by CPM. What is great about CPM is that it levels the playing field to making business decisions based on fact not feeling. And that is what being Business SMART is all about.