Edition 2 Direct marketing

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Introduction

Readers Digest 2 Image 1

Life in Western economies today is often said to take place in ‘a consumer society.’ The beginning of the ‘age of the consumer’ is associated with the period just after the Second World War where for the majority of the population incomes began to increase faster than the cost of basic necessities and the standard of living began to rise.

A feature of all societies is that when people have more income to spend or as their lifestyles change this leads to changing patterns of demand. For example, over recent years many people want to do more with their leisure time and look for greater variety in their past-times. As they become increasingly aware of changes in the market-place, they also become better informed and discerning about the choices they wish to make. Today's consumers don't just want a higher material standard of living, they want a quality of life which includes leisure time, an opportunity to develop hobbies, discuss issues with others and spend time relaxing. This has in turn generated an accompanying demand for information and content from the media to reflect and support an increasing diversity of lifestyles, needs and aspirations.

This case study focuses upon the growth and development of the bestselling consumer magazine title in the world, Reader’s Digest, a magazine which has developed in a unique way to become a publishing phenomenon which has set itself apart from other magazines.
The development of the Reader's Digest began in 1909 with a young man called DeWitt Wallace in Minnesota. He read widely a range of publications and kept a card index of the best articles. Wallace practised condensing articles from general-interest magazines. His first real publication, a booklet called 'Getting the Most Out of Farming,’ was published in 1916 and in 1920 he assembled 31 of his condensations into a sample 'pocket-sized' magazine and had several hundred copies printed. Wallace now had to decide what to do with his 'pocket-sized' magazine. He approached many different publishers but they all turned him down. Instead of giving up, Wallace decided to print it himself and to sell his Reader's Digest by direct mail.

Direct mail

Direct mail involved cutting out other publishers and distributors by communicating and selling directly to the public. Its great benefit in this situation was that it was a personalised approach which created awareness of Wallace's Reader's Digest by communicating directly with potential readers and appealing to their beliefs and lifestyle.

In 1921 Wallace wrote to teachers, nurses and other professional people, soliciting three-dollar subscriptions for 12 issues of the magazine to be refunded if the first issue did not meet with approval. Fifteen hundred trusting members of the public responded by risking subscriptions to a magazine that didn't yet exist. In February 1922 the wrapped and addressed copies of Volume One, Number One, of Readers' Digest were taken to the Post Office. Reader's Digest was launched.

The magazine was well received. Wallace had not only created a magazine, he had also invented a method of selling it. The postal relationship that he established with each of his customers raised a direct-mail operation to the level of a personal service. Within a few years Reader's Digest had become America's leading monthly magazine. A British operation began in 1938 and the first foreign language edition was published in Spanish in 1940. Today the global readership is more than 100 million, a circulation of 27 million, with 48 editors, published in 19 languages available throughout the world and has become the world's best-selling magazine.

The magazine industry

In the magazine industry there is a traditional distinction broadly identifying two types of magazines. This divides magazines into 'consumer titles' which provide readers with leisure-time information and entertainment or 'business and professional titles' providing readers with information relating to their working lives.

Readers Digest 2 Diagram 1

Today more than 80% of adults within the UK regularly read a consumer magazine. Consumers expect communications from around the globe which help them to be aware of and understand opportunity and choice as well as current affairs, which helps them to all be put into perspective.

Over the last decade the whole magazine industry has gone through a period of rapid growth. In fact over this period the total number of magazines published within the UK has increased by 33%, characterising a regenerative process with new titles launched as others close down and since 1991 consumer spending on magazines has increased by 43%. British Rate and Data (BRAD), a marketing and publishing agency which provides comprehensive information about the media, lists more than 6500 titles which take advertising.

Over recent years a characteristic of magazine publishing has been to develop more than one ‘revenue stream.’ Most magazines derive their income not just from the sale of copies but also from the sale of advertising space. To be able to do this, magazine publishers need to know about and understand who reads their publications so that they can provide advertisers with not just the opportunity to build coverage and target specific audiences, but also the advantage of being associated with a unique reader-magazine relationship.

Setting itself apart

The essence of Reader's Digest today is to appeal to the sort of people whom DeWitt Wallace back in the 1920s envisaged as the readers of his new magazine; busy men and women who welcome an easy-to-read collection of articles to keep them well informed about the world around them.

When Reader's Digest magazine first came to Britain in 1938, a company was formed in London to market the United States edition. It was sold both by direct mail and through retail outlets and circulation soon increased to 250,000 copies a month. This figure warranted printing the magazine in Britain and the first such issue appeared in December 1939, compiled from articles in the United States edition.

Because of a paper shortage during the Second World War, the size and circulation of the British magazine was pegged to pre-war figures, but when controls were lifted in 1950 and with the emergence of a thirst for information at a time of change in society, circulation soon rose, passing the million mark only four years later. As Reader's Digest became more and more part of the national scene, it expanded its coverage of British social trends and controversial issues of the day. On the lighter side, the magazine began to reflect the British way of life and sense of humour in its popular end-of-page "fillers" and amusing anecdotes contributed by readers.

As the readership of Reader’s Digest developed the magazine set itself apart as something that could be read and believed. As the magazine informed, enriched, entertained and inspired, it developed a unique reader relationship reflected through a bond of trust.

Today, a large number of the articles in British Reader’s Digest originate in this country. All the major national concerns – nuclear defence, local government, education, the EU and expanding technology are dealt with, often by leading figures invited to air their views in the magazine. Every article is written in straightforward and lively prose and every fact is meticulously checked by the research department. The standard set by the words is also matched by the quality of the illustrations.

Readership profile

An important part of the process of marketing is to undertake market research in order to build a profile of groups of customers. To do this requires accurate information. By looking at the groups of people who subscribe to Reader’s Digest, it is possible to make the most of the direct mail process and develop a cycle of improvement by feeding this information through planning and decision-making processes.

The circulation of Reader’s Digest in Britain is today more than 1.5 million, with a readership of more than 6 million. It is enjoyed equally by men and women and read by all ages and social groups. 52% of subscribers are women and 48% men. Our median reader age is 49.7 compared with the median for all adults in the UK of 42.6. Marks & Spencer enjoy an average shopper age of 48 (Source TGI). 11.9% of subscribers are aged between 25-34 compared to 33.6% aged over 65. 26.3% of subscribers fall into the AB socio-economic grouping compared to 21.7% in Class DE. 11.4% of subscribers are in Scotland, compared to 9.9% in the North of England, 9.9% in Greater London and 21.8% in the South East. 22% of revenues from Reader’s Digest magazine come from advertising, while 78% comes directly from circulation.

Annual subscription

The Reader’s Digest is bought almost entirely through annual subscriptions which account for 96% of circulation. The magazine inspires lasting loyalty. Every year, very nearly three-quarters of subscriptions are renewed; half a million people have been subscribers for three years or more and 250,000 for more than seven years.

Reader’s Digest magazine is considered to be the ’front door’ of the company. As the most widely read magazine in the world, it is an invaluable brand name with considerable heritage, representing quality and value around the world. Recent research showed that readers have greater confidence in Reader’s Digest than in other mass circulation magazines. They see it as dealing with serious subjects and treating them in depth, while also containing much humour.

The way in which Reader’s Digest magazine is read suggests not just a way of life but also a way of looking at life. Digest readers spend some 80 minutes reading their magazine, nearly four times longer than readers devote to magazines which arrive with some Sunday broadsheets. On average, every single page is looked at twice, at least. 71% of readers give as their most important reason for liking the Digest as "It is well written and easy to read."

So given all of this evidence how did Reader’s Digest become the world’s best-selling magazine and why has it remained at the forefront of an intensely competitive and expanding industry? There are two reasons:

  1. editorial direction
  2. the use of marketing

Marketing

Marketing is a process of planning which involves identifying, anticipating and satisfying consumer needs. The process starts with an understanding of what people want, upon which an ‘idea’ can be developed. Many people have ideas but few make them ‘happen.’ From the idea comes a plan and then a process of production and market research, from which will come the product which consumers want, at a price they are willing to pay. This is not the end of the process. When an organisation develops products, it has to reach its customers not just to inform them about the product and persuade them to buy one, but also to create a way of distributing the product to them. For an organisation to succeed it must be able to do this better than any other competing organisations. But this is not the end of the process.

Consumers have choice and who is to guarantee that they will continue to buy your products? There must be an understanding of changing consumer needs and feedback into this process so that a business can become better and better at satisfying these needs. The beauty of Reader’s Digest, is that it covers a high quality mass market with a broadly-based general appeal, providing something for everybody. To do this involves talking to customers to find out what they want more or less of. A variety of market research techniques are often used.

Feedback

Questionnaires have been developed to elicit information from customers. One-to-one interviews help to discover consumer motives and focus groups and group discussions provide a wealth of qualitative information which often uncover subconscious consumer motives. This type of research enables Reader’s Digest to cater for changes in consumer tastes, while at the same time reflecting a broad spectrum of interests and the ability to develop products with enduring values which inform, enrich, entertain and inspire.

Direct mail involves selling goods or providing services outside the confines of a retail outlet and with no face-to-face contact. Reader’s Digest is a subscription based business. Developing personal relationships with readers through the mail is a hugely important part of Reader’s Digest’s business strategy. The effective use of databases helps Reader’s Digest to develop a good understanding of consumers from whom their mail shots elicit a remarkably high response rate. When customers receive mail from Reader’s Digest they tend to read it and because the products are what customers want and have massive appeal, many respond.

Reader’s Digest’s response rate is an important factor, not just for Reader’s Digest but also for its advertisers. For a recent competition in the magazine, 100,000 envelopes were returned in less than a month. Subscribers react promptly to the Digest’s arrival - 36% will read it the day the post delivers it, 62% within 3 days and 82% by day 8. Reader’s Digest offers advertisers a variety of response options – a range they can not get from television - from cover gatefolds and loose inserts to a bound-in business reply card.

For Reader’s Digest to appeal to the mass market, it has to be priced carefully in a way which provides value for customers and satisfies their expectations so that they continue to subscribe and yet at the same time provides financial returns for the business. Post magazine research carried out on each issue of the magazine, helps Reader’s Digest to build upon its strengths in a way which enables it to touch the lives of its readers, not just through the magazine, but also through families of products such as books, CDs and videos, which help to underpin its success. The essential feature of Reader’s Digest is that, given its many competitors in a fast-growing magazine industry, it has a unique position, with no direct competition in a mass market and with the capability to deliver a high-quality product which no other business can match.

Conclusion

Wherever Reader’s Digest magazine is published, it has the same values and dedication to editorial excellence, providing high standards for readers by condensing articles which appeal to their hearts and minds. The magazine covers every type of scenario in a way which readers can readily understand. Technical issues are dealt with in a simple and clear way. Though the magazine is largely topical and adds value to Reader’s understanding of current issues, its articles have a lasting interest which are worth keeping and reading again at some time in the future.

Though the articles in each magazine differ, there are a number of common ingredients:
FACTS - Digest articles are definitive. They include, somewhere in the text, every fact that readers need to know, and why.
ANECDOTES - Readers are not simply told the facts, they are shown them, through anecdotes and examples. Reader’s Digest authors have an expertise in story-telling and the printed pages are as visual as a television screen.
DETAIL - Articles are pared to the minimum, but retain enough detail to provide the reader with a clear picture.
THRUST - A Digest article sticks to the point. From the start readers know exactly what it is about. Straight away they:

  • meet the character
  • hear the music
  • see the place
  • understand the terminology
  • catch the enthusiasm.

STYLE - Whether articles are explaining a complex industrial process, a knotty political controversy or a rescue at sea, they do it in everyday language with clarity and brevity.
ACCURACY - Reader’s Digest articles obtain their facts from a wide range of the highest and most knowledgeable sources available. The Digest has an enviable reputation to protect - “It must be true. It says so in Reader’s Digest.”

Developing the creative parts of a product which has constant appeal for a mass market, where standards and expectations are high, is not an easy process. It can take three or four months to write and develop an article and even longer to check that the facts are correct. Each Digest provides a mix of articles with no repeats, which help to create positive perceptions and do not leave the reader helpless. The Digest communicates stories that are uplifting and optimistic, but without a political message, with a conversational and informational style in articles of real interest for all groups of people who enjoy reading.

Reader’s Digest is a remarkable story of the development of a magazine to become a world leader. Its success in marketing products has led to many more business opportunities in books, tapes, CDs and videos, special interest magazines and many other areas, becoming a publishing phenomenon delivering products to consumers across the globe.