Catalog companies as ranked by estimated 1993 marketing spending-catalog and media expenditures. Catalog figure includes creative, production and mailing costs (chart) J.C. PENNY TOPS LIST OF CATALOG SPENDERS FIRST- TIME RANKING BY MARKETING INVESTMENT

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The Top 10 catalog marketers, which sold $11.4 billion worth of merchandise last year, spent more than $2.1 billion on marketing, a new Advertising Age ranking reveals.

This compilation of direct-marketing spending by the catalog industry was done with the assistance of Maxwell Sroge Co., an Evanston, Ill.-based consultancy that supplied primary catalog research data.

The marketing tally includes spending on creative, production and mailing costs among the largest consumer-merchandise catalog companies, as well as measured media spending in support of their catalogs.

Telemarketing and fulfillment costs are not included in these totals.

J.C. Penney Co. and Fingerhut Cos. proved the biggest beneficiaries of Sears, Roebuck & Co.'s decision to close its Big Book merchandise catalog, which ceased operations last year and isn't included in the AA rankings. That catalog alone had generated annual revenues of $3.3 billion.

"They rushed in to fill that gap," Mr. Sroge says of Penney's and Fingerhut, noting that both have increased their marketing budgets as well as revenues.

Fingerhut markets merchandise through both its own catalogs and Ward's Direct, a joint venture with Montgomery Ward & Co.

The Top 10 spent between 16% and 22% of sales on marketing expenses, with Penney's and Blair Corp. at the low end and Fingerhut at the top of the scale.

Rankings by marketing spending mostly track similar ranking by revenues, with the exception of No. 7 L.L. Bean, which leads Hanover Direct in revenues but trails it in marketing spending.

Mr. Sroge called Bean an "efficient" and "very conservative" company that's privately held and "not historically oriented toward growth" at any cost.

In contrast, publicly held Hanover has "a very aggressive growth posture, and our experience is that that is very costly" in marketing terms.

But few catalog marketers spend heavily on media advertising, which represents just 2% of combined marketing budgets for the Top 10.

Excluding Penney-whose $265.8 million media advertising budget mainly supports its retail stores and was therefore excluded from this ranking-Spiegel was the top spender in media advertising, and even its $12.2 million in spending also promotes the Eddie Bauer retail stores.

Lands' End was the second biggest spender, at $9.4 million, while The Limited (including the Victoria's Secret and Brylane catalogs) came in third, at $7.9 million.

Unlike the U.K. and other countries, where many catalogs sell merchandise through print ads, the medium here is used primarily to generate requests for the catalogs themselves, enhancing companies' own prospecting databases.

"Very rapidly, you run out of lists in this business," says Katie Muldoon, president of Muldoon & Baer, a New York agency specializing in catalogs. "If you're very targeted, when you start to merge lists together ... you get very high duplication rates, as high as 80%."

So, she says, advertising proves a "major secondary option" for yielding new names of catalog buyers.

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