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Publishers Clearing House

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Publishers Clearing House
Company typePrivate
IndustryPublishing
Founded1953
HeadquartersPort Washington, New York, United States
Key people
Robin B. Smith, Chairman
Andrew Goldberg, President and CEO
Deborah Holland, Executive Vice President
H.W. Low, Senior Vice President
Todd Sloane, Senior Vice President/Creative
John Princiotta, Senior Vice President/Marketing
Craig Anderson, Senior Vice President/Operations
Rick Busch, Senior Vice President/CFO
Christopher L. Irving, Assistant Vice President, Consumer & Legal Affairs
RevenueIncreaseUS $700 Million (2010)
IncreaseUS $? Million (2006)
Websitepch.com

Publishers Clearing House (PCH) is an American multi-channel direct-marketing company that offers discounted magazine subscriptions and household merchandise to consumers with the chance to enter one of its many ongoing sweepstakes. As a direct-marketing firm, it has no retail offices; its operations are concentrated in several physical offices, including its world headquarters in Port Washington, New York. It reaches consumers through direct-mail offers and online communications supported by its web site.

A limited-liability company, it is headquartered in the same town where the company founder, Harold Mertz, started the company from his garage. The street adjoining the local post office in Port Washington, LuEsther Mertz Plaza, is named after Mertz's wife.

History

The company was founded in 1953 by Harold and LuEsther Mertz and their daughter, Joyce Mertz-Gilmore. Mertz had worked for Look magazine and believed that magazine subscriptions could be sold in a more efficient manner by bundling them together in a single mass mailing offering the lowest introductory prices. With mailings offering consumers an array of discounted subscription offers, the company soon became the largest magazine-circulation agency in the industry.

Following on the success of the Reader's Digest sweepstakes introduced in 1963, the company launched its own sweepstakes in 1967 as a way to draw attention to the magazine deals in company mailings.

In the late 1980s, the company began awarding sweepstakes prizes in live recorded moments featuring the Prize Patrol with cameras recording the event for commercial use.

While the company's product offerings were broadened with a wide range of merchandise and collectibles in the mid-1980s, magazines sales accounted for the majority of the company's sales until the early 2000s. Merchandise now accounts for the majority of its sales. The company obtains additional sales from renting the names of those who respond to the sweepstakes, or make a purchase, to other mail order companies.[1]

Between 1994 and 2010, the company paid over $52 million to settle charges that its magazine promotions were misleading. It "agreed to change the ways it promotes its sweepstakes" and apologized for the "harm done in the past by its deceptive practices". The first of these settlements was with 14 states, in August 1994.[2] In September 2010 it violated these previous agreements, and paid $3.5 million to settle contempt charges (see "Government Regulation" section below).

By 2000, its magazine and merchandise sales plummeted at least 30 percent "amid bad publicity from lawsuits now numbering 25 in which individuals and attorneys general – including New York's – alleged that it deceived consumers in its frequent mailings." This resulted in a layoff of a quarter of its 800-person work force.[3]

Despite more on-line marketing development in the years 2002 through 2012, the company laid off additional employees in 2011, negatively impacting employee morale. .[4]

Online development

The company launched its first website, PCH.com in 1999, providing an online means to enter the company's sweepstakes and shop for magazine and product offerings.

In 2006, the company acquired Blingo Inc., a search engine website that offered a chance to win prizes with the first 25 searches of the day. Blingo was later re-branded as PCH Search and Win and added entries into its multi-million dollar sweepstakes on the first search of the day . Like other search engines, the site's revenue source is inclusion of paid search results with the organic search listings. [5] [6]

As reported by The New York Times, late in 2008 the company expanded its traditional direct-mail and online offers to more youthful channels including Twitter and iPhone applications. According to a December 22, 2008, Times article, the objective of these new offers was to use the registration information to increase PCH’s mailing lists.[7]

In 2009, it partnered with Arkadium to launch PCHGames.com, an ad-supported site with both display and video ads.[8] This was followed by the acquisition of online casual-gaming sites and other online properties.

In January 2012, the company acquired mobile marketing company Liquid Wireless. Terms of the deal were not released, but it is in line with their recent increase in focus in digital and social platforms.[9]

In 2012, Publishers Clearing House was the recipient of the Online Trust Alliance (OTA) Honor Roll, reflecting its adherence to self-regulatory efforts and adoption of security and privacy best practices. [10] [11]

Government regulation

In September 2010, to settle contempt charges that it had violated one of the 2001 agreements, (“marketing practices of misleading consumers to believe purchasing magazines and other products will increase their chance to win the jackpot)” [12] the company entered into a supplemental judgment with 33 states to extend the consumer protections set forth in its 2000 and 2001 multi-state settlements. A total amount of $3.5 million was paid to cover the total cost of the states' joint investigation. Specific terms of the 2010 settlement include:[13][14]

  • Increased outreach to customers with frequent purchases (High Activity Customers) to ensure that they understand that “no purchase necessary" means that no purchase is necessary to enter or win, a key principle of a legitimate sweepstakes
  • Cease using the tactic of sending a communication from the “Board of Judges” to indicate that the recipient is close to winning
  • Enhanced description of different giveaways offered in the same promotional mailing
  • Additional messaging that sweepstakes winners are selected randomly
  • Hire an ombudsman to review the company's solicitations on a quarterly basis.

In December 2007, it agreed to a formal letter of understanding with the Iowa Attorney General that requires the company to implement a program to identify elderly consumers at the point where their spending is just beginning to be excessive – when an Iowan age 65 or over has spent $500 or more in a calendar quarter for its products.[15]

Between 2000 and 2001, the company signed two settlements with 48 state attorneys general, totalling $52 million, and agreed to increased regulation.[16][17][18]

The rules put in place include:

  • Not misrepresenting the chances of winning a prize
  • Not requesting certain information or action from recipients which would lead them to believe they have won. This includes their whereabouts at the time the prize is awarded or their preference for events related to the awarding of the prize
  • Not using a personalized simulated check to mislead a recipient into believing he/she has won or is likely to win
  • Not representing that a recipient has an enhanced chance of winning a prize, is in a select group, has "never been closer" to winning or enjoys a special status in the sweepstakes and
  • Not misrepresenting a sweepstakes mailing as being delivered by special delivery or that any communications are from a federal or state government or other official entity
  • A provision that prohibits PCH from making any false statement, no matter how small or seemingly insignificant. In addition, the settlement puts in place strict prohibitions against misleading or deceptive statements or omissions and, for the first time, prohibits PCH from implying, by any means whatsoever, anything that it is prohibited from stating directly.
  • Prohibiting PCH from discriminating between consumers who order magazine subscriptions and those who do not. From now on, PCH may only use a single entry form for the sweepstakes, to be used by all consumers whether they order products from PCH or not. In the past, customers who did not buy magazines or other products were forced to search for a small, plain entry card among the various colorful mail pieces PCH included with the contest solicitation. This practice, now ended, led consumers inevitably to conclude that those who ordered had a better chance to win than those who did not.
  • Increased safeguards to protect that small minority of vulnerable PCH customers who may continue to be confused about whether buying products has any impact on their chances of winning.

Odds of winning

As posted on the company's website on September 7, 2011, the odds of winning Giveaway #1400 were 1 in 1.75 billion.[19] This is an increase of more than 23 percent from the August 2010 odds for Giveaway #1830 (ending February 28, 2015), of 1 in 1.21 billion.[19]

In 2008, "The estimated odds for the $10 million drawing are 505,000,000 to one. That's equivalent to sending over 1.3 million entries every day for a year (and the sweep doesn't even run for a full year)."[20]

In 2007, for the $10 million drawing, the PCH website said "your odds of winning are 1 in 330 million."[21]

Competitors

The company was a competitor of American Family Publishers (AFP), which ran similar sweepstakes. The two companies were often mistaken for each other, with Ed McMahon and Dick Clark, the spokespersons for AFP, mistaken for representatives of PCH. McMahon was never employed by PCH and never appeared in any commercial for the company. In the sixth episode of NewsRadio, "Luncheon At The Waldorf," Ed McMahon and Publishers Clearing House were discussed as if they represented the same entity.

Prize Patrol

The PCH Prize Patrol The company has come to be known for its Prize Patrol that surprises winners at their homes, work or other locations with prize awards captured on video.[22] Since their introduction in 1989 these reality-TV style winning moments have been prominently featured in the Publishers Clearing House commercials and, more recently, in the company's online acquisition efforts, websites and social media communications.[23][24][25] The PCH Prize Patrol has made in-person appearances and prize awards on such popular TV shows as The Oprah Winfrey Show[26][27] and The Price is Right.[28][29]Their surprise winning moments have been spoofed by Jay Leno,[30] Conan O'Brien[31] and the cast of Saturday Night Live,[32][33] woven into the plots of movies like Let's Go to Prison,[34] [35]The Sentinel[36]and Knight and Day[37][38] and the subject of good-natured cartoons from Cathy to Ziggy.

See also

References

  1. ^ Staff (January 4, 2012). "Publishers Clearing House List Rentals". List Service Corp.
  2. ^ Evans,David (August 25, 1994). "Contest Offers Mislead Entrants Publishers Clearing House Pays $490,000 and Promises To Change Its Promotions"". Bloomberg Business News (via High Beam). {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  3. ^ http://www.allbusiness.com/human-resources/902436-1.html. Retrieved February 12, 2012.
  4. ^ http://www.glassdoor.com/Reviews/Publishers-Clearing-House-Reviews-E7542.htm. Retrieved September 23, 2012.
  5. ^ Campanelli, Melissa (June 26, 2001). "Publishers Clearing House Acquires Blingo". Direct Marketing News.
  6. ^ Crowell, Grant (December 15, 2003). "How Search Engines Make Money". Search Engine Watch.
  7. ^ Stephanie Clifford (December 22, 2008). "Old-Line Magazine Sweepstakes Company Gets Digital". The New York Times.
  8. ^ "Publishers Clearing House and Arkadium Partner To Launch PCHGames.com 2.0" (Press release). PR Log. December 7, 2009.
  9. ^ Mickey, Bill (January 11, 2012). "Publishers Clearing House Buys Mobile Lead-Gen Provider Liquid Wireless". Foliomag.com.
  10. ^ "OTA 2012 Honor Roll - Segment Data". Online Trust Alliance. 6 June 2012. Retrieved 8 October 2012.
  11. ^ "Social Media and eCommerce Sites Lead in Security and Privacy". Online Trust Alliance. 6 June 2012. Retrieved 8 October 2012.
  12. ^ "http://archive.chicagobreakingbusiness.com/2010/09/publishers-clearing-house-to-pay-3-5m-settlement.html" (Press release). {{cite press release}}: External link in |title= (help)
  13. ^ "http://www.coloradoattorneygeneral.gov/press/news/2010/09/09/attorney_general_announces_multistate_35_million_settlement_publishers_clearin" (Press release). {{cite press release}}: External link in |title= (help)
  14. ^ Publishers Clearing House Sweepstakes Information Center. [1].
  15. ^ Iowa Attorney General (December 1, 2007). "Letter of Understanding" (PDF).
  16. ^ New York Attorney General (August 20, 2000). "Spitzer Announces Landmark Settlement with Publishers Clearing House" (Press release).
  17. ^ Staff (August 23, 2000). "Publishers Clearing House Strikes Deceptive-Practices Accord". The New York Times.
  18. ^ Texas Attorney General (June 26, 2001). "Texas, 25 States Reach Settlement with Sweepstakes Giant" (Press release).
  19. ^ a b Official Rules on PCH Website url=http://prism.pch.com/Rules/Rules.aspx?Cid=MQA1AA
  20. ^ "Publishers Clearing House - $10 Million Giveaway Number 1170 Expired". About.com. Retrieved May 23, 2011.
  21. ^ "Neutral Source Overstated Risk Perception the Publisher's Clearing House Sweepstakes". Neutralsource.org. January 8, 2007. Retrieved May 23, 2011.
  22. ^ "Publishers Clearing House". International Awards Treasury. September 19, 2007. Retrieved July 31, 2012.
  23. ^ Stuart Elliot (July 11, 2011). "Prize Patrol Heads Over to AOL". The New York Times.
  24. ^ PCH Mega Prize Winner (Video Clip). AOL.
  25. ^ "Cover Story: Full Sweep". Target Marketing. November 1. Retrieved July 31, 2012. {{cite web}}: Check date values in: |date= (help)
  26. ^ "Million-Dollar Moments". The Oprah Winfrey Show. October 28, 2009. Retrieved July 31, 2012.
  27. ^ "Million-Dollar Moments 5". The Oprah Winfrey Show. October 28, 2009. Retrieved July 31, 2012.
  28. ^ Upping The Ante On Plinko! The Price Is Right (Video Clip). youtube.com: Price Is Right. April 9, 2012.
  29. ^ Maloni, J (April 9, 2012). "Full week of Plinko, chance to win 100K when PCH Prize Patrol visits The Price is Right". Niagara Frontier Publications. Retrieved July 31, 2012.
  30. ^ PCH On TV Jay Leno Spoofs the PCH Prize Patrol (Video Clip). youtube.com: PCHarchive. January 24, 2011.}
  31. ^ Conan O'Brien Promo with Jane (Video Clip). youtube.com. January 29, 2011.
  32. ^ Saturday Night Live Publishers Clearing House Giveaway (Video Clip). hulu.com.
  33. ^ "What is it called when people bring a big check to your door because you won a contest". ChaCha. Retrieved July 31, 2012.
  34. ^ "Let's Go to Prison". Wikipedia. Retrieved July 31, 2012.
  35. ^ Let's Go To Prison Trailer (Video Clip). youtube.com. October 23, 2006.
  36. ^ "The Sentinel". Retrieved July 31, 2012.
  37. ^ Smith, Joseph (July 1, 2010). "Movie Review Knight and Day". SunGazette.com. Retrieved July 31, 2012.
  38. ^ Ivers, Patrick. "Laramie Movie Scope Knight and Day". Retrieved July 31, 2012.
  • "Official Rules." Publishers Clearing House website. Retrieved August 29, 2010.
  • pch.com, the company's official website
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