Marketing Budget Optimization™ for Publishers
Publishers seeking to find new subscribers will frequently use a variety of sources to identify new prospects. They order prospects from Wiland. They order prospects from various database companies. They rent prospects through a list broker. They establish exchange relationships with other marketers, sometimes directly and sometimes through a list broker. They identify owned audiences, such as subscribers to another owned title, who might be good prospects.
Many publishers are unknowingly wasting 25% of their new subscriber acquisition budget on prospects that are not worth marketing to at all.
Having obtained prospects from a variety of sources, these publishers will engage a service bureau to run merge/purge—a process that compares all the sources, removes duplicates, and allocates duplicates among the various sources. The result is an unduplicated "net file" of prospects, with addresses standardized. Typically, this net file is presorted either by the service bureau or a printer in order to achieve presort postage discounts. Following the merge/purge and presort, the net file goes to print production.
This process works, but it is not optimal from the publisher's viewpoint because the prospects on the net file are not all of equal value. In fact, virtually every net file contains prospects that waste marketing budget. They are not worth contacting. The marketing budget allocated to contact them should be saved, falling to the bottom line, or redeployed more productively.
How large might the wasteful portion of a net file be? If it were 1% or 3% maybe it wouldn't be worth the time and expense to deal with the waste. But it isn't small. It is almost always between 5% and 40% of the net file, and on average 20% to 30% of a merge/purge net file are prospects which will subscribe and pay at such a low rate that the publisher will never make up the loss—ever. Many publishers are unknowingly wasting 25% of their new subscriber acquisition budget on prospects that are not worth any marketing efforts. Yes, they survived the merge/purge process. They would not have been ordered in the first place if there were not some reason to believe they were good prospects. Yet, many are poor prospects, obscured within an otherwise good audience. Only in rare cases has anyone intentionally included poor prospects in an ordered audience, but they are always there.
How does this happen? There are many answers. Some hotline subscribers just subscribed to the one and only publication they will ever subscribe to, and they won't pay for it. Still, they remain hotline subscribers. Some people on a merge/purge net file subscribe to a publication on a trial basis about once every three years, and just subscribed to one on trial, thus using up their quota for the next three years. Some subscribed and paid recently, but only because the sweet little neighborhood girl asked them to subscribe. They won't renew, or subscribe to anything else unless she comes by again. The reasons for poor prospects surviving to a merge/purge net file are many and varied. But that isn't the point. The point is this: The poor prospects are always there, and marketing to them wastes marketing budget.
There is a Better Way
Simply stated, the goal of Marketing Budget Optimization is to: 1) Remove prospects who are highly unlikely to become paid subscribers; and 2) redirect saved budget to audiences or programs that produce the needed quantity of new subscribers at a significantly lower cost.
Publishers deserve a more rigorous approach to this process—one that yields better results. This is precisely what Wiland Marketing Budget Optimization™ delivers. Wiland Marketing Budget Optimization analyzes and optimizes a publisher's net file and evaluates the likely performance of each prospect. Based on our industry-leading prospect modeling science and scoring systems, we provide the publisher with a more accurate view of the likely responsiveness of the prospects that emerge from every net file process.
Simply stated, the goal of Marketing Budget Optimization™ is to: 1) Remove prospects who are highly unlikely to become paid subscribers; and 2) redirect saved budget to audiences or programs that produce the needed quantity of new subscribers at a significantly lower cost. Marketers should carefully consider how to utilize savings from the elimination of poor prospects. Options may include:
- Replacement of poor prospects with high-ranking Wiland modeled names. Consider this example:
- Wiland identifies and drops the bottom 20% of net file, predicted to produce 1.0% response
- Half of dropped prospects are replaced with Wiland modeled names, predicted to produce 2.5% response
- The remaining 10% of net file names are not replaced, directly enhancing the bottom line
- Result: lower marketing expenditure and more new subscribers
- Redirection of some or all of the savings to online marketing efforts or other marketing promotions
- Allowing all saved budget to fall to the bottom line
Regardless of how savings are used, Marketing Budget Optimization™ makes it easier for publishers to achieve new subscriber acquisition targets and meet rate base goals, while measurably improving the ROI of subscriber acquisition campaigns.
A Key Consideration
Stop and think about this: the firm (including Wiland) that can best perform Marketing Budget Optimization™ is one that has massive subscription and other transactional information. There are few such firms. And, these same firms are the ones most likely to be the right place to spend the saved marketing budget. Thus, they have a vested interest in finding lots of poor prospects on a net file so that they can replace them with their own prospects, or other marketing campaigns. Pick a trusted partner who won't take advantage of this situation, one who shares your objectives. Don't be general with the objective, be specific: rather than saying "eliminate the weak prospects", say "eliminate the prospects that good modeling suggests will produce a ROI of -40% or worse on the initial new subscription acquisition campaign"—and then test it to confirm the prospects really are that poor. The optimization has to be real, and the redeployment must be superior. Otherwise, Net File Optimization is not worth the effort. At Wiland we are all about effort. We don't want to just sell a publisher more of what we have available. We want to measure, prove, and actually help the publisher's bottom line.
Fast. Simple. Smart.
Publishers need to think this through, and get everyone motivated properly to produce the best possible result.
Wiland Marketing Budget Optimization™ process is fast and efficient, requiring only one full production day to perform the needed analytics and refinements. Considering the vast improvements that this process can deliver, it is an extra day well spent.
As publishers plan their campaigns, working alongside their cooperative database partners, list brokers and agencies, Wiland Marketing Budget Optimization™ is a seamless process that should be included as a regular part of every campaign. By working together as a team with everyone who is involved—and with the publisher's best interest as the unwavering focus—the team can devise multiple scenarios that test how best to optimize audiences before the marketing budget gets spent. Maybe adjustments need to be made to assure that all on the team are compensated appropriately in order to do what is right: produce the best result for the publisher. All team members need to achieve success. Publishers need to think this through, and get everyone motivated properly to produce the best possible result.
As with all of our proprietary offerings for the publishing industry, Marketing Budget Optimization™ is another example of how Wiland is creating a new and promising future for publishers, reinventing the ways they reach their subscription acquisition goals and achieve their rate base and revenue objectives.