Blow-in cards take a holiday at Hearst

Philips Electronics is paying Hearst Magazines $2 million to eliminate blow-in cards from the September issues of four of its titles -- Redbook, O At Home, Weekend and House Beautiful. Read more about it in this Wall Street Journal article. Each magazine will instead run a two-page Philips ad with the line "Simplicity is not having subscription cards fall out of your magazine."

The ads are the latest in an intriguing series aimed at reinforcing Philips's marketing promise to make life easier for people. Last fall, for instance, Philips bought all the national ad time of one episode of "60 Minutes," giving some of the time back so the show could run longer news segments and fewer ad breaks.

Philips and its media buyer, Aegis Group's Carat, were turned down by a number of publishers before Hearst agreed.

The article noted that subscription cards, though unpopular with consumers, are a reliable and effective way of getting new customers. It went on to quote circulation consultant Dan Capell saying that, the Internet now accounts for 10% of new sales, while insert cards now generate 12% (down from 20% several years ago). Direct mail continues to generate 22% of new subscribers, he estimates.

"Nevertheless, publishers like cards because they are a finely targeted way to reach potential new subscribers -- and because they are relatively cheap," said the Journal story. The net cost of signing a new subscriber through a card runs from $5 to $10, less than the typical cost of many magazines' annual subscriptions, estimates Greg Wolfe, president of Circulation Specialists, a Norwalk, Conn., consulting firm. The cost of signing subscribers through direct mail, on the other hand, is often more than the subscription price, he says.

Hearst said it wasn't worried about losing business. "We are very confident that any sort of losses from that one month will be made up elsewhere, and that's part of our plans," said John Hartig, senior vice president of consumer marketing and development at Hearst Magazines. Hearst intends to cross-promote the four titles across its various magazine Web sites and other Web venues.

"Mr. Hartig predicts that the Internet eventually 'will begin outpacing inserts in total subscription new business volume.' But not every publisher agrees. 'The Internet has become a good source of subscriptions, but not as large a source as the hype a few years ago suggested,' says Tom Masterson, senior vice president of consumer marketing for Hachette Filipacchi Media U.S."