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Brands still look to print

News, 13 March 2015

NEW YORK: Major brands may be devoting increasing attention to digital but print advertising, whether in the form of circulars, catalogues or magazine spreads, remains a stalwart beloved of consumers.

Last year, for example, circulars generated $5.84bn in revenue for US newspapers and accounted for around 20% of their advertising revenue according to figures from market research firm Borrell Associates.

"Retailers are constantly testing alternatives to circulars," Gerry Storch, the chief executive of the Hudson's Bay Co, told the Wall Street Journal. "The difficulty is finding something as effective,"

A single run of a newspaper circular can cost as much as $1m and digital, the most obvious alternative, hasn't grabbed consumers in the way retailers would have hoped.

Figures from Wanderful Media, a business dedicated to helping retailers connect with local shoppers, suggest that 80% of people who read a print newspaper also look at the circulars inside, but less than 1% of online readers click through to digital circulars.

So even though local newspapers may be in difficulty, digital advertising is unlikely to replace what retailers lose from print when one shuts down.

Some leading retail names, including Kohl's and Macy's, have reintroduced circulars or increased the number they distribute, with the former taking care to greatly improve its targeting.

In a related development, J.C. Penney recently decided, after a five year gap, that it would once again print a catalogue, although the new version, at 120 pages, will be focused on home furnishings.

"Mailing to customer homes still has a powerful effect connecting the customer to J. C. Penney," noted Forbes contributor Walter Loeb, who expected the combination of print catalogue and online shopping would generate increased sales.

He also noted that that big Christmas circulars from retailers like Toys 'R' Us had acted as catalogues and driven more traffic into stores.

The power of print was further highlighted by Apple, which took out a 12-page spread in Vogue, the fashion magazine, ahead of the launch of its Apple Watch. It also appears on the March cover of SELF, the women's lifestyle magazine.

Warc's International Ad Forecast estimates adspend on newspapers of US$48.7bn worldwide in 2014, some 34% of which can be accredited to the US alone. Magazines are thought to have amassed a further US$23.4bn in ad revenues at that time.

Data sourced from Wall Street Journal, Forbes, Apple Insider; additional content by Warc staff