In Italy, a surefire way to newspaper or magazine readers’ hearts is to make them an offer they can’t refuse. Free perfume, pasta, English or computer lessons, encyclopedias and video cassettes are just some of the consumer sales incentives offered by the Italian press to attract and keep readers.
From the most respectable dailies, such as the market-leading Corriere della Sera, to weekly news magazines, including Panorama and L’Espresso, to specialized publications such as the pugilist review Boxe, all major Italian titles, as well as many lesser ones, are locked in an ongoing consumer promotions battle.
The goal? To boost circulation numbers and steal or maintain market share against leading competitors.
“Italians read fewer magazines and newspapers than the European average, in large part because distribution is so poor,” says Alberto Rolla, an analyst with Pasfin Securities Sim. Believe it. There are 125 dailies in Italy, 880 in France and 1,900 in Germany, according to the European Advertising and Media Yearbook. A key reason for Italy’s lag?
Newsstand owners have successfully lobbied to keep publications out of other venues, including supermarkets, bars and gas stations.
And since newspapers and magazines are nearly impossible to find, except at street kiosks, “there is virtually no impulse buying. Publishers had to invent something to push circulation,” Rolla explains. There are home subscriptions, but a significant circulation boost is the hard-won prize for newsstand promotions.
Though publishing executives and media analysts in Italy note that promotion wars are a decade old, the battles intensified markedly in 1992, after a recession hit and circulation plummeted. Moreover, since ’95, the promotional skirmishes have grown even more frequent for Italian publishers.
And they don’t come cheap.
For instance, Corriere della Sera has a variety of promotions running for one-third of the year. It costs “from $15-20 million annually,” says Claudio Calabi, chief executive officer of parent company Rizzoli Corriere della Sera Group. Despite the cost, the newspaper has begun promoting itself seven days a week.
But neither industry executives nor local media analysts see these near-ubiquitous consumer incentive programs disappearing. The reason is simple: They work.
“The most successful promotions for the two leading newspapers, Corriere della Sera and La Repubblica, can increase daily circulation by 300,000, up to a total of 1 million copies sold per day,” says Eugenio Bona, president of Media Italia, a subsidiary of the Armando Testa advertising agency, which is based in Milan and Turin. “For the magazines L’Espresso or Panorama [which are akin to Time and Newsweek], weekly sales can grow by 150,000 copies above an average circulation of between 400,000-500,000 copies,” he says.
Of course, print publications around the world regularly use promotions to court readers. Time Warner’s Sports Illustrated, to name just one, has frequently offered the promise of free gifts to entice new subscribers. But few publishers would dare to match the Italian press’ largesse of rewarding not just subscribers but off-the-street buyers–day in and day out–with a huge assortment of giveaways.
For readers, visiting any Italian newsstand is a shopping bonanza. A newspaper and magazine junkie could stock up on promotional prizes, including perfume, courtesy of Italian Glamour, and a video of the film The Rock, starring Nicolas Cage and Sean Connery, shrink-wrapped with Panorama.
By contrast, an erotic movie accompanies the purchase of L’Espresso, while travel information produced by the Italian Touring Club is inserted inside the day’s edition of La Repubblica. Most of the items secured from day-to-day purchases are free, though some publications do charge a minor premium above the newspaper or magazine cover price.
The trick is creating the right promotion for the right reader. Calabi explains that the different incentives offered by Corriere della Sera are neatly effective at keeping its competitors at bay.
The paper’s promotions are designed to attract new readers and induce current ones to purchase the newspaper more frequently than usual. In Italy, those aged 18-54 comprise the largest daily readership. Dailies favor the male reader, while periodicals enjoy a 50/50 gender split.
“La Repubblica [which once was the market leader] wants to catch us, so we need to maintain or increase our market share,” Calabi says. “We have to be very cautious that operations are not linked to editorial,” he adds cryptically.
Most publishing executives interviewed acknowledge that consumer promotions have spiraled out of control.
“It would be best if we were judged strictly on our editorial content,” said one newspaper executive, a view widely shared by competitors. “We’ve had long discussions with the competition to reduce the number of promotions,” admits Calabi. The problem is: When a publication takes such a radical step, bravery has its price.
Panorama was rebuked by consumers last spring when it made the crucial decision to stop putting cassettes in with the magazine. “Circulation dropped by about 6 percent. They tried to redress the problem from a journalistic point of view,” says Rolla. “It was a very bold approach.” After a second attempt at giving readers straight journalism, sans giveaways, the cassettes are back.
Not everyone, however, believes the industry is averse to a permanent state of promotional giveaways. “The debate in Italy against promotions is not conducted so much by the media owners as by politicians and intellectuals,” says Domenico Ioppollo, executive director of A.C. Nielsen Italy. “Intellectuals charge that the quality press image has been cheapened, but the media owners apparently can afford it,” he says.
Ioppollo, in turn, argues that the constant sales incentives have actually helped popularize the quality press rather than tarnish its image.
“Maybe their reputation was too intellectual once. It discouraged reading within the blue-collar community,” he says.
He also maintains that promotions give advertisers the opportunity to experiment with different consumer sampling programs. “They can reach a very targeted audience in this way,”
Ioppollo points out.
Indeed, apart from conducting sampling studies, press promotions typically exist separately from advertisers and their agencies. Marco Testa, president and chief executive officer of Armando Testa, explains that the press generally doesn’t ask agencies to get involved, outside of “the occasional idea which could prove interesting. Of course, we create ads to tell people what promotion is coming up next.”
Despite mixed feelings within the media industry toward Italy’s sales incentive phenomenon, the Italian government has been active. It has been mulling possible legislation that would broaden magazine distribution to stores and bars. Past legislation has failed, largely due to the substantial political influence wielded by kiosk vendors and newsstand owners.
In addition, various business concerns have filed their own economic objections with government officials. For example, video store owners claim that video giveaways undermine their business.
Although he hopes to break the vicious cycle of promotions, Calabi says his position on government intervention is decidedly neutral. “I doubt legislation will happen anytime soon,” he notes skeptically.
Ioppollo argues strongly against government involvement, saying Rome is usually too eager to try and regulate media and advertising-related issues. “It’s a marketing tool of media owners,” he observes, referring to the incentives. “It’s up to [publishers] to decide if they want to use them. It’s not to be decided by some law.
Daniel Tilles can be reached at 100442.1706 compuserve.com
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