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Postcards to the max
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July 8, 1998: 6:55 p.m. ET
Maxracks' postcard ads are making a splash with single twentysomethings
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NEW YORK (CNNfn) - You may not have heard of the company Maxracks, but you've probably seen its postcards in restaurants, clubs and movie theaters in major cities across the country.
Sylvie Anapol, president and co-founder of Maxracks, told CNNfn's "Business Unusual" the idea for postcards as advertising was based on a concept she first saw in Europe.
The idea has been very successful in the U.S., where the postcard ads are particularly popular with single twentysomethings. Maxracks is pulling in revenues of $5 million to $10 million a year.
Here is what Anapol had to say.
BEVERLY SCHUCH, CNNfn ANCHOR, BUSINESS UNUSUAL: Now people may not know Maxracks, but everybody's seen one of these somewhere. How did you get this idea to go back to postcards?
SYLVIE ANAPOL, PRESIDENT AND CO-FOUNDER, MAXRACKS: We actually saw the concept in Europe. It's been in Europe for about nine years, and about four years ago, we decided that it could be translated to the States beautifully, which it has proven to be.
SCHUCH: And how widespread are you right now?
ANAPOL: Right now, we're in 12 cities. We are in movie theaters and we are also in Tower Records.
SCHUCH: Now, how do you get the advertisers -- like Chanel and Calvin Klein and Volkswagen?
ANAPOL: Basically, we go after them exactly the way any other advertising medium would. A lot of the advertisers have embraced this because they see them when they're out and about themselves. So they're already familiar with it. They're familiar with its strengths because they use them. They mail them. They hang them up on their walls. So it's been a very good sell for us.
SCHUCH: And it's a relatively cheaper form of advertising for these companies to get a lot of exposure?
ANAPOL: It is a less expensive out-of-pocket, and in addition to that, they also get a great interaction that most advertising doesn't give them. Whether it's outdoor in a magazine, these cards are actually used.
SCHUCH: Now these are regular postcards? You can put a stamp on them and mail them?
ANAPOL: Exactly.
SCHUCH: Who picks them up?
ANAPOL: Well, we have done some research. We have found out that our target audience tends to be someone in their 20s, single. They tend to have a high discretionary income and they tend to be out and about, not surprisingly, since that's where you have to get them. And they tend to be very brand conscious, brand aware consumers.
SCHUCH: And they mail them then to people?
ANAPOL: About 56 percent of our people mail them.
SCHUCH: What's the most successful card?
ANAPOL: Recently, the most successful has been the Volkswagen campaign that nobody can see over there. Also, right now, we're going to start running the Levi's campaign, which I think will be very successful, and the Chanel campaign is one of the all-time best. And of course -- Absolut.
SCHUCH: Is this protected somehow, this idea? Do you have competition now?
ANAPOL: Well really, we consider our competition more of the national magazines that are out there. And, it -- the rack itself -- is patented.
SCHUCH: Oh, it is, OK. How do you get revenues from this idea then?
ANAPOL: We bill our advertisers for them. It's an advertising-based medium.
SCHUCH: Is it a good business, so far?
ANAPOL: It's been a very good business so far.
SCHUCH: I know you're privately held. It's four years in operation now. How have the revenues been?
ANAPOL: Our revenues are between $5 and $10 million a year.
SCHUCH: And growing, how?
ANAPOL: Growing.
SCHUCH: What is the growth rate?
ANAPOL: We have been growing at about 25 percent.
SCHUCH: What are you going to do after this? Do you have growth plans for this?
ANAPOL: We have a very strong distribution system set up and we're starting to look into other types of programs that use our distribution. One of the programs that we're launching right now is called Maxpacks. And what will happen is when you get your food delivered from your local delivery service, inside will be samples. And we're calling it Maxpacks.
SCHUCH: What are some of the more unusual places these postcards have turned up?
ANAPOL: They have turned up everywhere. I can't walk into an office or into a home where I don't see them. One of the funniest we got was that a Pepperdine University student sent us a letter saying that they've decorated their entire room just with postcards.
SCHUCH: Entire room -- I'm sure they're popular in dormitories, in fact.
ANAPOL: Very popular.
SCHUCH: Are these kind of an economic alternative for advertisers then?
ANAPOL: I think that it offers advertisers a way to get into advertising, into consumer hands in a very positive way. The advertiser, the consumer realize that there's value to the cards. It's a very positive rub off. There's an interaction with the card. Someone has to pick it. They mail it to somebody else. They spend time with it. And unlike a magazine which after the month it's gone, these cards can stay around for months and months.
SCHUCH: Tell me about the cult following with these cards being traded.
ANAPOL: Well, we have an Internet site, maxracks.com. And we get e-mails every single day from people asking for specific cards. Will they trade this card for that card? Do we have a copy of a card that was six months old? Can they use these cards to send invitations out? So, people have really started sort of using these cards in their everyday life.
SCHUCH: And it's the idea, the concept is that they're free -- it's something for nothing?
ANAPOL: Exactly.
SCHUCH: How do you choose the locations where you want to set up the sites?
ANAPOL: Well, as I mentioned, we have a certain target that we're looking to reach. And very often, our venues act as the editorial. They're what draw the people into the location. So we look for places that have a high traffic area, that attract a certain type of individuals, that allow us to put the rack in a high visibility location because that's important.
SCHUCH: Are these places receptive to the idea of having a Maxrack?
ANAPOL: Very receptive.
SCHUCH: Do they get a profit, part of the profit from this?
ANAPOL: They don't receive the profit, but what they do get is a free postcard for themselves to use at their location. Which they very often do. They either display them at the restaurant or they mail them out to tell their people about upcoming events. So they use them themselves.
SCHUCH: What have Tower Records and movie theaters done for your business?
ANAPOL: Well, it's provided us with a whole new sector. I mean, we can reach people that are more family-oriented at the movie theaters. At Tower Records, while a strong component is our urban buy, another part is the teenage market. So it allows us to reach new people with our postcards.
SCHUCH: Who decides what the artwork will be? Is it the advertisers or do you guide them with this?
ANAPOL: The advertiser makes the decision. But if they ask us, we give them certain suggestions. Try to keep them very visual as a plus.
SCHUCH: And then you print them up?
ANAPOL: We print and distribute them for them.
SCHUCH: And how often do they change?
ANAPOL: They change actually every two weeks. But someone, an advertiser, has a month.
SCHUCH: So you have how many advertisers now in circulation?
ANAPOL: In New York, right now there's 22 advertisers on a rack.
SCHUCH: And do you have plans for that growing?
ANAPOL: Well, yes. We're probably going to have to add a couple of slots.
SCHUCH: I mean, what is the growth though per month of advertisers coming onboard? I would think they would pretty much want to jump on the bandwagon.
ANAPOL: They have, and sometimes we've been sold out. We haven't been able to accommodate advertisers. 
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