- Jennifer Peters
Combing the Sunday papers for flyers and ads is a regular habit of many Americans. It’s how people make their shopping lists for the week, decide on when to make big purchases and plan their meals. And the deals that lure readers to the advertisements within the papers’ pages are good not only for consumers, but for advertisers, too.
A study conducted by Michigan State University for the News Media Alliance about consumers’ engagement with preprint advertisements found that there’s a direct correlation between non-subscribers receiving the newspaper and how much they spend. When non-subscribers get their hands on a physical newspaper — and all its advertising and preprint flyers — they make more purchases and spend more money.
The researchers who conducted the study believe having the newspaper preprints sitting visibly on the counter or coffee table is more likely to jog a non-regular reader’s memory or desire to shop while something is on sale.
“We suggest that it could have been a discovery effect,” says Dr. Anastasia Kononova, one of the researchers on the project. “The speculation is that on top of what non-subscribers usually buy, they tried some items that they may have found in the newspaper…Some non-subscribers said that receiving the Sunday inserts within the newspaper was quite useful.
“We should consider the profile of our non-subscribers. They are younger, shorter-term residents of the community. They might have minors living in the household. They also eat out more,” Kononova explains. “So, we suggest that our subscribers ‘need more stuff,’ and that’s why they are bigger spenders. They also may have less time to save money (e.g., cooking at home vs. eating out). In addition, their younger age may suggest greater engagement with trying new things. Perhaps this is why newspaper inserts stimulated them to buy additional products.”
Why They Shop
While regular subscribers did not shop significantly more with or without the preprints, they did spend more without the preprints, likely because they were missing valuable information about sales and special pricing. The money they save, therefore, is a valuable return on investment for the cost of their newspaper subscription.
Newspaper subscribers are also more likely to engage in comparison shopping than their non-subscribing counterparts — and generally have more tools to do so, since they can regularly use preprint ads to help them find the best deals.
The study authors note that “even when consumers are shopping online, participants indicated the newspaper can be a catalyst for a particular online search. This means that some online shopping might actually be credited to the return on newspaper, and preprint, investment. This could suggest a potential benefit in strategic planning that applies an integrated print-and-online combination of advertising tactics.”
However, both subscribers and non-subscribers were more likely to save coupons on the days they received the newspaper. Even when not receiving the paper, the authors noted, participants were less likely to turn to e-coupons. But having access to a print newspaper made both groups more than twice as likely to save coupons.
When it comes to accessing ads online, participants said they tended to tune them out or were blind to them. “I don’t look at advertisements online at all. [But] I will look through advertisements or coupons or whatever in an actual paper.”
However, print advertisements tended to jump out more for readers. As one study participant told researchers, “Coupons always get my interest. They always draw my eye. And then I decide whether it’s something that’s worth my while or something I’m interested in.”
Having more coupons on hand may be what spurred participants to shop more during the time they received the newspaper — not only did they have a visual and physical reminder that they wanted to purchase an item, but they had the added incentive of receiving a discount if they went to the store sooner and used their coupons.
“I think those Sunday circulars drive sales, they do for me,” one participant told researchers. “I have a very specific list I make up on Sunday. And I go shopping on Sunday, then again on Saturday.”
What They Buy
As for what readers were buying with all those coupons, both subscribers and non-subscribers bought nearly twice as many cleaning products when they had daily newspaper delivery than when they didn’t. Other product categories saw more differences between subscribers and non-subscribers. While subscribers bought more apparel and clothing when they were getting their daily paper versus when they weren’t, non-subscribers’ apparel purchases did not change with receipt of the daily paper.
The authors discuss that even when coupons aren’t collected for a particular product, many advertisements alert shoppers to other discounts and sales that are happening that customers may not otherwise know about.
Return on Investment
There is, however, one kind of ad that makes the ROI difficult to determine, and that’s the store ad. While a certain product may be advertised as on-sale or a coupon may be provided, there’s no guarantee that the manufacturer of the product will see the kind of ROI that this study suggests. While shoppers may save the coupon or ad and go to the store, it’s possible that they won’t buy that particular product and instead will see something else in-store that changes their purchase behavior. The advertiser’s ROI also depends more on consumer spending, so while a half-price sale could increase store traffic by 50 percent, the authors note, income for that period could still go down because of the sale.
“For example, if an advertiser were to compare ad investments during one month and revenues during that month, they will find a ratio,” the authors explain. “If the ratio is less the next month, the natural tendency would be to blame the advertising, when it might be a change in the merchandise, or seasonality, or a major sale, or any number of other factors. The same would be true if the ratio were greater.”
As Kononova points out, however, “The study showed that receiving the newspaper IS effective, whether it is about coupon and ad saving, or about saving money. If consumers save money when they receive the newspaper and preprints, it means they are loyal to the brands advertised in the newspaper.”
However, the authors also note that there is no single ROI number that can be determined from studies such as this. “The reality is that there are different returns and different investments. The assumption…seems to be that it is the return and investment of the advertiser, but this is a relationship of multiple parties and all of them must see value in preprint for it to a viable tool,” they write. “There are many advertisers, many media and many consumers involved in this economic exchange. All are looking for a return on their investment, whether that investment is time, money or something else.”
Alliance members can access the full study here.