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Consumers and grocers prefer food ads in newspapers over direct mail, but mailers are making inroads, two new Newspaper Association of America studies show.

A telephone survey of 1,106 primary food shoppers, conducted by ICR Survey Research Group, Media, Pa., reveals "there is some continuing penetration of direct mail, but newspapers are still the preferred medium by consumers for food advertising and coupons," said Al Gollin, NAA VP-research director. "It's a strong story for newspapers."

The other survey, consisting of phone interviews by Kannon Consulting, Chicago, with 14 major grocery retailers, concludes that newspapers are preferred over direct mail because of the medium's strong reader involvement, said Deborah Hernan, NAA VP-retail marketing director. But the business is newspapers' to lose if they remain inflexible and unimaginative in their offerings and don't give grocery advertisers the market penetration they need.

The NAA will discuss the studies' results at its annual marketing conference this week in San Francisco.

Newspapers had a 44.5% share of the $2.92 billion spent on grocery ads in 1993, down from 48.2% in '87, the Food Marketing Institute estimates. Targeted mail had 31.5% in '93, vs. 26.5% in '87. The NAA estimates that grocery ads in daily newspapers hit $1.1 billion in '91, or 3.9% of the total advertising in those papers.

Newspapers can keep grocery advertising by maintaining a high market penetration and reaching non-subscribers with total market coverage products. Some newspapers are even forming networks to better serve large regional grocery customers.

Grocers "need newspapers to deliver penetration. That is the key issue for them-they have to reach every household," Ms. Hernan said. "The reason they move to direct mail is because they can't get the penetration from newspapers."

Safeway's Eastern division in Lanham, Md., uses both direct mail and newspapers.

"We want to get our ads in customers' hands and [will go with the medium] that can do that best," said John Deckard, public relations manager.

Grocers also want newspapers to become marketing partners.

"Their business has gotten a lot tougher ... ," Ms. Hernan said. "They are looking for the media to help them be better competitors."

That means providing creative ideas and being flexible in their offerings, something newspapers haven't been known for. Versioning-creating and distributing different versions of an ad to consumers in different trading areas around stores-is growing in popularity.

"Newspapers can do better than they do today," Ms. Hernan said. "The question is are they willing to make the investment?"

Loyalty clubs and household targeted marketing, something that's difficult for newspapers to do, seem to be waning in interest among retailers.

"I thought loyalty clubs would be a very big thing [with grocery retailers] and grow in popularity," Ms. Hernan said. "But most chains considered them very, very expensive and do not see them as a big part of the future. They are only experiments."

The NAA hopes to use the data to become more visible at the FMI trade show next May in Chicago. Newspapers will also be encouraged to build consumer and advertiser awareness of their offerings.

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