Boston Globe Media is closing down its direct marketing unit, saying the business is losing money amid rising costs and the ongoing shift by advertisers to digital media.
The shutdown of Globe Direct, which delivers advertising circulars to households, was announced in an e-mail to employees on Thursday, following a Globe Direct staff meeting. The decision was made after efforts to restructure the Taunton-based unit or find a buyer fell short, according to Josh Russell, general manager of Boston Globe Media, the parent company of The Boston Globe.
“Unfortunately, with the industry changes [in direct marketing], business continues to shrink and we are experiencing significant losses that we simply cannot sustain or recover,” Russell said in the e-mail. The pandemic accelerated the decline in the volume of advertising inserts, he said, while costs for raw materials and shipping have soared.
A Boston Globe Media spokesperson declined to say how many employees would lose their jobs as a result of the shutdown, which will be completed by the end of the year.
The Globe entered the direct marketing business in 1991 with the acquisition of a company called Good News. At the time, the Globe’s print circulation was more than 500,000 during the week and nearly 800,000 on Sunday. But as the rise of the Internet sent print circulation into a long decline, advertisers increasingly shifted spending to websites, social media, and e-mail.
The Globe’s daily print circulation averaged about 69,000 for the six months ended in March, while Sunday circulation was about 119,000, according to data from the Alliance for Audited Media. The Globe has steadily expanded its digital-only subscriptions to about 236,000.
Globe Direct “was successful when it could intertwine and thrive around our core Globe enterprise,” Russell said in the e-mail.
Globe Direct also lagged behind bigger competitors such as Vericast/Valassis as they added digital marketing and analytics to their offerings, according to advertising experts.
Russell said Boston Globe Media is focused on the segments of its business that are growing.
“We will continue to increase our investments to enhance and expand the journalism that we provide to our subscribers,” Russell said.