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Montreal's No. 2 supermarket chain has learned the value of magazines as an ad medium-not for its own print ads but to boost readershipof the chain's circulars.

The free-circulation Le Magazine Provigo reaches consumers inserted in the fliers of Provigo Supermarkets. A typical issue of the food-related magazine also carries anywhere from two to five color page ads, at about $14,500 each. But to avoid pressuring its suppliers, Provigo doesn't keep any of the ad revenue.

The magazine was launched in February 1993 and this month switches frequency to a monthly of 16 to 20 pages from a 12-page every-other-weekly. Le Magazine Provigo boasts a French-language home circulation of about 2.2 million, penetrating roughly 84% of the households in the province of Quebec. About 40,000 copies of the English-language version are distributed by mail and through point of purchase.

Quebecor Printing proposed the concept of a supermarket-sponsored consumer magazine to Provigo to help the chain stand apart from its competitors, said Pierre Dicaire, publisher of the Le Magazine Provigo. Provigo and Quebecor, which also produces the supermarket's weekly fliers, created a 101/2-by-8-inch magazine on coated recycled stock, bound into Provigo's circular.

The result, according to two surveys commissioned by Quebecor, has been an increase in Provigo flier readership among shoppers of both Provigo and other chains.

By boosting readership for Provigo fliers, the magazine is accomplishing its marketing mission, said Paul Lafortune, Provigo's director of marketing.

"Research has shown that about 75% of customers consult and use fliers to buy," he said. "We can cut TV [spending], we can cut radio, but there's no way we can cut fliers."

Fliers and the magazine represent about half of Provigo's marketing budget, with about half of that devoted to the magazine.

Mr. Lafortune initially feared that selling ad space in a supermarket-sponsored magazine might put Provigo suppliers in an awkward position. They might feel compelled to buy ads, and they might feel pressure to boost budgets with other retailers to match their increased Provigo spending. So Provigo agreed to forgo all ad revenue from the magazine; instead, Quebecor gets it. Provigo, however, has right of refusal on any editorial or advertising.

To date, the magazine's advertisers have included Kraft General Foods, Kellogg Co., the Royal Canadian Mint and the Bank of Montreal.M

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