Closing the Deal -- Knight Kiplinger Revisits Direct Marketing History

by Marilyn Liebrenz-Himes

Knight Kiplinger was the kickoff speaker for this year’s DMAWEF Leadership Circle luncheon briefings. Kiplinger, current editor-in-chief, took over the family’s publishing dynasty from his father, Austin H. Kiplinger. The magazine has been continuously published monthly since W.M. Kiplinger founded it in 1947 by, although its name has changed from the original The Kiplinger Magazine, to Changing Times, and finally, in 1991, to its current name, Kiplinger’s Personal Finance magazine. In 2001, Kiplinger’s acquired the Individual Investor magazine, including its subscription list.

While the Kiplinger magazine has been a staple in the United States for more than half a century, promotions for its subscriptions have been at the forefront of direct marketing communications for the past fifty years.

The 20th century brought in new advertising technology; radio ads were used in the 1920s, telemarketing came right along with the telephone. By the 1950s, television was the hot new medium, although national TV advertising was not seen as a powerful medium. However, the opportunity provided by television became apparent, when W. M. Kiplinger ran one advertisement for his newsletter, Changing Times on the NBC Today show at 7 a.m. The subscription orders poured in, and the power of television advertising was evident. It is likely that the onset of W.M. Kiplinger’s use of national television advertising helped to establish its value. Kiplinger wryly noted however, that as the ad rates rose, Kiplinger’s had to stop advertising on the program.

Kiplinger continued with his direct marketing timeline experiences. During the 1970s and 80s, broadcast’s new medium was cable TV. One- or even two-minute commercial time was cheap, and Kiplinger’s used direct response ads to promote their periodical.

In 1980, Ted Turner brought out the 24/7 news channel on CNN. Many thought that such a format was the worst idea, but Kiplinger decided to try advertising on this channel. In fact, for the first two years, Kiplinger was the largest advertiser on CNN. The channel’s popularity soared, Kiplinger subscriptions again poured in, but also, again, direct marketers who needed a low-cost acquisition advertising channel had to leave as CNN rates rose. In general television, both network and cable advertising rates have risen to the point where manufacturers of moderately priced products without mass appeal are not able to afford such channels.

Kiplinger’s presentation to Leadership Circle members on his company’s experiences with direct marketing activities moved from an historical perspective toward the present day. He noted that, when the 1990s brought in the Internet, the old, traditional media were declared dead. He reminded his audience that, despite the growing use of the web across virtually all industries, most successful marketing ventures continued to use a variety of approaches. For example; the Smile Train charitable cause uses almost every medium.

However, cutbacks in traditional media continue. Kiplinger wryly noted that print magazines, including financial magazines, are not doing well today. Broadcast direct response ads are avoided by TIVO or other methods. Do-Not-Call lists are growing. Catalogs may offer multiple ways to place orders, including online ordering, but the number of catalogs is dropping. Ecological concerns discourage the use of paper as landfill issues are rising. Direct mail postage costs are way up, especially for the 9X12 size that gets opened more often. On the other hand, the ability to track mail through electronic bar codes has encouraged direct mail to remain a vital marketing source. Kiplinger stated, “We’re mailing smarter.”

Subscription sales are a vital part of Kiplinger business activities. As use of the Internet continues to grow, Kiplinger’s operations also have moved to more online activities, with both online and hard copy issues offered. The company utilizes automatic renewals of subscriptions on credit cards.

Kiplinger reminded his audience that, while the Internet did not kill off radio, TV, or most forms of direct marketing, advertising dollars have been flowing away from these traditional channels into this hot new medium. But, the critical issue is that web revenues are not replacing the prior revenues generated by print media. Many people, especially young adults, appear convinced that the Internet should be free. Software is often used to block all online ads. Concerns about online privacy continue, especially as people begin to realize that instant profiles can be created from surveying their web browsing.

As a publisher, Kiplinger mused, is there hope? He pointed out that people continue to seek the same benefits. The Kiplinger franchise has discovered that buying lists from failed publications is less expensive and works well. Direct response continues to be useful and the Internet can be used for direct response. The Kiplinger product of monetary advice in these uncertain economic times is highly desirable. It appears, however, that despite today’s changes, some things stay the same. Kiplinger concluded his presentation by pointing out that all today’s creative endeavors do not work any better than the traditional offer of a six-month free subscription.