In Chicago-a hotbed of competition for doorstep-delivered advertising-discount retailer Venture Stores has parted ways with Advo after two years and returned its preprinted circular business to the Chicago Tribune. The Trib is promising total market coverage by distributing ad circulars and inserts to all homes in the area, including non-newspaper subscribers.
The skirmish comes as companies are putting increasing emphasis on "neighborhood marketing." It's still called junk mail by many, but marketers, especially supermarkets, mass merchandisers and fast-food operators, consider circulars delivered at doorsteps and mailboxes to be an increasingly important marketing tool.
As newspaper circulation has declined, marketers have sought better alternatives to get their circulars into consumers' hands. Hence the opportunity for companies like Windsor, Conn.-based Advo, the nation's largest provider of mailbox-delivered preprinted circulars. But in highly competitive markets, local newspapers are going head to head with national preprint providers.
Both the Tribune's home-delivered "Weekend Local Values" circulars and Advo's "Mailbox Values" contain price-based advertising showcasing short-term sales and special offers on products and services.
Terms of Venture's deal with the Tribune weren't disclosed. Advo retains Venture's advertising circular business in Texas and other markets; Venture operates 119 stores in nine states, mostly in the Midwest.
A spokesman for Advo said the Tribune cut its prices sharply to win back Venture and increase its market share in the area.
Losing Venture also caused Advo to cut the frequency of its mailings from twice a week to once a week. The latter is the norm for its schedule in most markets.
But Venture Senior VP-Marketing Cliff Campeau said it was "research, targeting information and the ability to identify promotional opportunities" rather than price that lured Venture back to the Tribune.
"We look for a combination of tools allowing us to deliver our message as broadly or as tightly as we choose," Mr. Campeau said. The deal with the Tribune allows Venture to run regular inserts inside the newspaper with circulars also delivered directly to households that don't subscribe to the paper, achieving total market coverage. Venture also recently bought an ad on the polybags in which the Trib is delivered to homes, trumpeting an insert inside the paper.
The Tribune's stepped-up offerings for total market coverage are a response to marketers' demands for "a better return on marketing investments in the face of rising printing and paper costs," said David Murphy, director of advertising sales at the paper.
"Everyone wants saturation of their message without duplication," he said, "and it's become very important for retailers to get the best possible combination of weapons for effectiveness while trying to hold down costs."
Despite losing its battle with the Tribune over Venture, Advo said it's winning the war elsewhere with its own highly targeted mailbox-delivered advertising circulars reaching 58 million U.S. households each week.
"If you want saturation and coverage in a market, there is probably a company that can do it cheaper. But Advo is the largest provider of circulars, and therefore, we have the best systems to target and measure results," said company President Joe Durrett.M
Kate Fitzgerald coordinates Events & Promotion. Reach us by fax at (312) 649-5331 or e-mail address [email protected]