2009 B-to-B Circulation Benchmarking Study

Source mix innovation is occurring in the new business efforts, while retention marketing relies on a more traditional mix.

By Bill Mickey
Tuesday, March 31, 2009

AD conducted an informal survey in early March designed to measure how b-to-b circulators and audience developers are using various media to acquire and renew subscriptions. Here, we present the results.

A lot has changed since our last benchmarking survey years ago—b-to-b circulators in increasing numbers are switching their focus to audience development. And they’re now dealing with a growing number of media in which to acquire those audiences.

This survey was created by AD to gauge the structure of b-to-b circulators’ campaigns, including the number of efforts by medium; the percentage of promotion budget costs associated with new business and retention efforts; and response rate by media and by campaign.

Our goal is to present the benchmarks we establish to help you, your subordinates and thousands of audience developers become more efficient and effective. The information is comparative between 2007 and 2008—with some forward-looking expectations for 2009. All results are specifically associated with controlled circ b-to-b publications. Keep in mind the results are based on an informal survey conducted by AD in-house through our own source list. While not as exhaustive as a formal survey, it is certainly representative of what some of the leading companies in the industry are doing.

About the Survey Respondents

The respondents to the benchmarking survey were primarily circulation manager level (62 percent) with just over a third at director level or above (38 percent). From there, respondent metrics were nicely spread out, representing a wide range of publisher sizes, circulation and frequencies. For example, 23 percent of respondents publish one magazine, 35 percent publish two to five magazines, and just over a quarter of respondents publish more than 20 publications.

Correspondingly, gross annual revenues are across the board: 11 percent of respondents reported revenues below $1 million; 41 percent have $1 million to $9.9 million; 15 percent reported $25 million to $49.9 million; and 26 percent logged $50 million or more in revenues.

We asked respondents to base their numbers on their single largest controlled publication. Those ranged from under 10,000 circ (13 percent) to between 10,000 and 49,999 (29 percent); and 50,000 and 99,000 (32 percent) to 100,000 and 249,000 (19 percent). Six percent of respondents reported circ of 500,000 and up.

About New Subscriber Acquisition

In both 2007 and 2008, sources for new business maintained a fairly traditional mix. However, in both years, Web site-based subscriptions and even social media were represented in the mix. Search engine marketing made an impressive entry in 2007, representing an average slice of 34 percent of the source mix pie. (In this question, we asked respondents to list their top five sources and estimate the portion of the mix for each. Respondents could choose from 15 sources, which aside from the top five shown at right, included Web site, trade shows, e-newsletter, agent, bind-ins, inbound telemarketing, fax, partnerships, package inserts, and social media.)

SEM Plays a Big Role

The SEM bug caught on, because in 2008, its share of the mix went up to an average of 45 percent, even eclipsing direct mail (43 percent). Email, outbound telemarketing and cover wraps all maintained their levels in the mix across the two years.

The success of SEM corresponds with the next chart, which lists sources according to response rates. SEM is second behind outbound telemarketing with direct mail tied with cover wraps and trade shows representing the next slot. Not far behind, however, are Web site-based subscriptions (11 percent), third-party partnerships (12 percent) and email newsletters (13 percent).

New business costs continue to go up. In 2007, respondents said the average cost per name over all sources to acquire a new controlled subscriber was $4.96. In 2008, that went up $0.64 to $5.60. For this year, it appears costs will go up for some, but not others. Forty-nine percent of respondents said they expect costs to go up while 42 percent predict costs will level out and stay the same.

In 2008, the three highest sources by cost per name were direct mail, outbound telemarketing and, curiously, trade shows. Cover wraps were close behind in fourth place. SEM, perhaps reflecting its success in the mix, was reported by a correspondingly few respondents as a high-cost source, with only 12 percent of respondents considering it one of their three highest-cost sources.

The volume of direct mail sent in 2008, according to the respondents, was seemingly light. An overwhelming number (60 percent) of respondents said they sent 25,000 or fewer direct mail pieces to acquire new subscribers. The rest of the survey participants were spread fairly evenly between 25,000 to 499,000 pieces.

Direct Mail Dialed Down

This year, however, direct mail will get dialed down significantly. Not surprising given the state of this year’s economy and the source’s perch near the top of the list in terms of cost per name. The majority (58 percent) still expect to mail fewer than 25,000 pieces, but this year 21 percent expect to mail between 25,000 and 49,999.

Interestingly, email names were used in similar volumes as direct mail. In 2008, 49 percent of respondents indicated they sent email to less than 25,000 names. The rest were comparably spread between the range of 25,000 and 499,999 names. This is likely a result of the respondents having an email address appended to an average of 49 percent of their circ file—yet respondents indicated that, on average, only 68 percent of their email addresses are usable.