Magalogs and Print Advertising Sales
What's a Magalog did I hear you say?A magalog is what you get when you marry a magazine's editorial content to a catalog's product content, and it's the newest buzz among retailers. According to the NY Times, companies like Bloomingdales, Bergdorfs, Saks, Hermès and Holt Renfrew are now producing their own magalogs. The reason is simple. Retailers are looking for additional ways to get through to their customers. With magalogs they have the freedom to control editorial content and the flexibility to feature various store products in the place of advertisements. In some cases, retailers have even been successful at pitching advertising space directly to their vendors. In addition, since magalogs are distributed primarily to current store customers, they provide an added means of initiating customer contact while simultaneously building a marketing list. From a store's vantage point, magalogs are a good deal. But what will they do to traditional print advertising?
Our opinion in short is... very little.
Magalogs, are an inventive means of promoting in-store products. They inherently identify with the salesman's mantra that it's easier and more cost effective to sell to repeat customers than to new. Therefore a magalog's core strength will be in upselling -- getting more out of an existing base. But they will do little toward drawing in new customers, and they have slim chance of replacing leading magazines in terms of shelf-life and a reader's commitment level.
Magalogs that are successful enough to sell advertising space to vendors may in fact draw some marketing dollars away from traditional print venues. However, in order for this to have any significant impact two things will have to increase:
1. The number of magalogs being produced -- a strong possibility.
2. The volume of ads dollars being sold therein -- an iffy proposition.
Magalogs provide a richer, more sophisticated level of customer interaction. In contrast to a traditional catalog, they are made to appeal to readers both visually and contextually. If successful, it only stands to reason that more retailers will look to duplicate such efforts. However, selling advertising is another matter. It requires a dedicated staff, some level of circulation verification, some means of proving readership and often some method of analyzing ROI. These are difficult matters for full-time publishers to handle and will certainly be a weighty burden for stores. Consequently, it is far more likely that "advertising space" will be filled with a simpler proposition, free in-store product placements.
All-in-all, while we believe magalogs are and will become an increasingly important marketing mechanism, their overall benefit will be in growing the ROI levels of current customers. Meanwhile, their impact on traditional print advertising platforms should remain immaterial.
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