Big Box Retailers Shift from FSIs to Digital, But are FSIs Still the Way to Go?
In 2015 major retailers have transferred FSI (Free Standing Inserts in Newspapers, circulars, or preprints) dollars to digital advertising, and are studying results for future advertising commitments. A round-up about how this situation is playing out in the Hispanic newspaper market.
The FSI business, an ad-category that has been relatively shielded from the general decline in newspaper advertising, has lately also seen significant declines. Walmart's decision earlier this year to cut its overall FSI advertising by 50% has definitely played a role. Says, Zulema Tijero, Advertising Manager at El Tiempo Latino, owned by The Washington Post: "Due to Walmart scaling back on their preprint, our preprint business has declined for 2015 about 30%, but our local business has grown specially in the arts/entertainment categories." Tijero adds that the FSI business is declining because it's a huge expense to print the FSI, therefore advertisers are moving dollars to online.
"Big box retailers appear to have made a real strong effort on Cyber Monday offerings and have transferred FSI dollars to digital, and are studying results for future advertising commitments, luckily impreMedia is in a position to capture many of the transferred dollars as a result of our digital offerings," notes George Ayala, VP Advertising Eastern Region at impreMedia, a major Hispanic newspaper publisher.
Printing substantial runs of preprint advertising can cost up to US$ 1 million per run, but FSI's remain a key way for advertisers to obtain reach, which digital media often cannot give them.) Even with the circulation declines at major newspapers inserts still land in about 50 million households, according to Borrell Associates, a market-research firm. impreMedia's Ayala notes that, despite less business from big-box retailers,"FSI’s have been just slightly stronger (than ROP advertising) for the following reasons: They allow customers to have a tangible printed piece they can hold on to until they are ready to purchase. Some companies feel customers are feeling a bit overwhelmed and confused with the many online offerings. Also FSI real estate allows you to show multiple offerings on one page and most newspaper companies including impreMedia allow you to distribute FSI at zip code level providing great cost efficiencies." Ayala notes that the strongest category in FSI's are Grocery &; Telecom.
Some companies feel customers are feeling a bit overwhelmed and confused with the many online offerings. FSI's allow companies to provide customers with a tangible offer, customers can hold on to and use when they are ready to purchase.
Switch Back from Digital to Print in 2016?
"I would say FSI are almost always stronger than ROP and this year is no different. Retail advertisers mostly are to account for FSI revenue. They are also loyal and frequent advertisers. Consumers love shopping from their weekly circulars and the return on investment to the advertiser shows it," says Anita Grace, an advertising sales executive who sells into newspapers including The Brownsville Herald, La Voz de Arizona and Excelsior/La Prensa Riverside says that
Homero Martinez (photo), general manager of the Dallas Morning News Spanish-language publications,"FSIs continue to be a strong and effective way for advertisers to reach consumers. Even with all the different forms of advertising out there, very few are as tried and true as FSIs. Furniture, Grocery, Retail, Home Improvement, and Telecom are strong players." Andres Valdes, National Sales Manager at the Houston Chronicle, claims that within the preprint FSI vehicle big-box retail is the largest category and Quick Services Restaurantes (QSRs) the weakest. The Dallas Morning News Homero Martinez agrees, "Sit-down restaurants and QSRs are a couple that we'd love to see more."
Hispanic newspaper circulation, contrary to the vast majority of general market newspaper circulation, is actually up. It grew by 4 percent last year for 31 weekly Spanish-language newspapers examined by Pew Research Center in a recent report. This trend reflects the great appetite for reliable, local news among Hispanics.