WINDSOR, Conn. -- Advo here, a major distributor of retailer advertising circulars, is developing a direct mail vehicle which will deliver a cost-effective degree of targeting for branded product promotions.
Dubbed STARS, for Shoppers Targeted Around Retail Stores, the program will split Advo's existing 57 million-consumer database into groups as small as 400 households -- corresponding to postal delivery routes. It will begin testing early next year.
"STARS will provide demographic targeting at about one-third the cost of name-specific vehicles," said Joe Durrett, Advo president and chief operating officer. "It will be priced at a premium relative to FSIs, but at a discount relative to popular envelope programs. And, it offers a degree of trade alignment that is unavailable to either of them."
The STARS circulars will resemble free-standing inserts in print quality and format. They will contain manufacturer advertising and offers, juxtaposed with non-competing retailer advertising. Up to three versions of each ad or coupon offer are possible within each market.
In exchange for the free advertising, participating supermarkets agree to consider supporting items featured in the STARS publication. Retailers also must agree not to advertise anything competitive to those brands, he said.
In contrast to newspaper FSI or envelope programs, whose distribution patters Durrett described as "shotgun," STARS will focus its coverage to match the trading areas of major supermarkets.
"We divide zip codes into postal carrier routes with high propensities of households with seniors, with children and 'other high volume' households. These are the three target groups most requested by brand marketers," he said.
While STARS is hardly "one-to-one" database marketing, Durrett insists that this level of focus best balances cost with targeting effectiveness.
"We will go to packaged goods companies and sell entire markets. We can then change the value of item or offer among these demographic groups," he said.
Durrett said Advo has scheduled tests of STARS in three markets beginning next January. "We will be giving each participant a turn-key results package, showing sales volume moved, level of trade support and redemption rates, all with comparisons versus past history."
Advo will purchase syndicated scanner data to do this, he added.
Asked whether carrier routes, demographically speaking, are the optimal unit for direct mail targeting, Durrett said, "It may be for the amount of money being spent."