Retailers Can’t Shake the Circular Habit - Inserts in newspapers draw more shoppers than digital ads, but cost a lot more

From The Wall Street Journal:

The world may be going digital, but the brightly colored advertising inserts that spill out of newspapers every Sunday somehow missed the memo about the decline of print.

Newspaper circulars are hanging on even though they draw fewer and fewer eyeballs as readership shrinks. And they are expensive to produce, costing up to $1 million for a single run.

Chain stores would love to be free of the expense and have tried dozens of experiments over the years to find an alternative, with little or no luck.

Aware that it can’t go cold turkey on circulars, the department store Kohl’s Inc. this spring plans to scale back. Kohl’s is hoping to save money by using shopper ZIP Code data to better target its circulars.

First, Kohl’s will use purchasing history to divide its shoppers into four groups: loyalist, underengaged, infrequent and new. Then they will be cross-referenced by their ZIP Codes. Only areas with the highest concentration of loyal shoppers will get circulars.

Publishers have a lot on the line in keeping it that way. Circulars account for about a fifth of newspaper advertising revenue, Borrell Associates says, though the amount varies widely by paper.