READER'S DIGEST SETS AGGRESSIVE NEW GAME PLAN;ACQUISITIONS EYED AS FLAGSHIP MAG AND BOOK UNIT BOOST MARKETING

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A newly aggressive Reader's Digest Association is overhauling the way it markets books, introducing new demographic editions of its flagship magazine and hunting for acquisitions for the first time in years.

The moves are the latest in a turnaround effort aimed at boosting RDA's sagging stock price, now trading near $40, from about $55 two years ago.

TURNING AROUND

"Some of you are as upset as I am that it's taking so long, but it is turning," Chairman-CEO James Schadt told analysts in New York last week.

The company put in a bid on a magazine property last week, an insider said, its first such attempt since buying what is now American Health for Women in 1990.

While declining to give details, Mr. Schadt confirmed to Advertising Age the company is looking at "four or five projects" involving launches and acquisitions.

Industry watchers believe RDA might bid on Hachette Filipacchi's crossword puzzle titles, known as Popular Magazines; they generate estimated revenue of $5.5 million a year and cash flow of $850,000.

A Hachette spokesman confirmed the titles are for sale, but said the publisher has received no formal offers.

NEW LOOK FOR BOOKS

Acquisitions are just one sign of RDA's new aggressiveness.

On the book front, Ogilvy & Mather Worldwide, New York, named as the company's first global agency last month, will tackle a major assignment as it looks to refresh RDA's Condensed Books, to be rechristened Select Editions in mid-1997.

Using TV, direct mail and the Internet, the agency hopes to craft a campaign to attract younger buyers.

The book unit is profitable-taking in $120 million a year in the U.S. alone-but has experienced serious erosion of its customer base, from a high of 1.2 million more than a decade ago to about 600,000 today.

Flagship Reader's Digest, meanwhile, will roll out three demographic editions in April targeted to do-it-yourselfers, health-conscious women and the mature market. Each will have a circulation of 1 million.

COMPUTER EDITION COMING

Earlier this year, RDA scrapped a 4.1 million rate base "Power Plus" demographic edition in favor of a more targeted 1.3 million circulation, high-income edition called "RD Gold." A computer edition will be added later.

"The vision is to have at least eight demographic editions by the end of next year," said Gregory Coleman, VP-general manager of the magazine division and publisher of the domestic edition of Reader's Digest. Advertisers "are clamoring for efficiency and targeting. They don't want waste."

In other moves, RDA over the past two years has slashed its worldwide work force more than 20% and radically rolled back the volume of sweepstakes mailings it sends out to promote magazine subscriptions.

"The customer got tired," said Mr. Schadt, in explaining the direct-mail shift, aimed at cutting mailings while increasing response rates worldwide.

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