Publishers Clearing House, the mail-order giant famous for handing out giant checks to sweepstakes winners, is becoming a sophisticated digital publisher

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Publishers Clearing House has been known for decades as a subscription magazine seller and sweepstakes powerhouse.
Today it's closing in on becoming a billion-dollar merchandise business and a significant digital ad seller.
PCH can tap into data from its registered user base of 15 million customers that can be used for precision ad targeting.

A company famous for cutting big checks is pulling in plenty of its own.

Publishers Clearing House is perhaps best known (at least among people of a certain age) for selling cheap magazine subscriptions and compact-disc collections — and for delivering oversize checks to sweepstakes winners.

Turns out, PCH is now a cutting edge, data-driven digital media powerhouse.

The 65-year-old company pulled in a whopping $1 billion last year — $900 million of which came from selling merchandise, such as its own lines of cookware, beauty products, and collectibles.

But PCH also boasts of a fast-growing $100 million digital advertising business. It sells ads on its website, app, and other gaming sites to brands such as Hershey's and Procter & Gamble.

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PCH has its own 30-for-30 club

Fueling the sweepstakes company's growth is its budding VIP club. At a time when most publishers and marketers are pining for direct-to-consumer relationships and as much data as they can get their hands on, PCH has 15 million registered users — people who share their name, address, age, and email address.

Seven percent of its web visitors become VIPs, who get exclusive content, customized games, and chances at bigger prize hauls (like $1 million and up). These VIPs spend an average of 34 minutes a day on PCH.com.

There's even a group the company calls its "30 for 30" club. A full 19% of the VIPs (more than 150,000 members) log in for 30 straight days, PCH says.

What are these people doing every day? Whereas in the old days, PCH fans would participate in sweepstakes via the mail or by calling 1-800 numbers, now millions log onto PCH.com and sign up for a chance at loads of different prizes — winning $7,000 a week for life, for example — along with a rotating collection of digital "scratch offs," power prize jackpots, and so on.

Mark Cullinane, the senior vice president and general manager of digital at Publishers Clearing House, says the company uses data and analytics to keep people coming back.

"This is really shopping as entertainment, and gaming as entertainment," he said. "We are about inspiring our users to dream."

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PCH pivoted from print — roughly 30 years ago

Publishers Clearing House was started as a discount magazine seller in 1953 by a New York family: Harold and LuEsther Mertz and their daughter, Joyce Mertz-Gilmore. The company launched its first sweepstakes in the late 1960s, and by 1985 it started selling merchandise.

The Mertzes eventually brought in outside management to run PCH. Today, magazine sales account for roughly 3% of its revenue.

Yes, PCH still does live commercials in which it shows up at a contestant's house with a giant check. (Note: If you remember commercials with Ed McMahon doing something similar, that was a different company.) And it still does plenty of direct mail orders for pet products and the like.

But increasingly it sees itself as a digital publisher with a unique advantage.

"Because we have this chance to win, people typically register up front, and we instantly know a lot about our users," Cullinane said. "We build a profile as we go, and eventually deeply personalize that experience."

PCH's fan base is in the heartland

PCH CEO Andy Goldberg notes that the company's reach is national but correlates very highly with Walmart's customer base. The sweet spot is women in their 40s and 50s.

Over the years, PCH has developed several of its own product lines to cater to this audience, such as the home-furnishing line Woodland Creek as well as Smart Home. "As Seen on TV products are huge seller," Goldberg said.

PCH has also evolved into something of a media company. Its website features a broad array of general news content, not unlike the old-fashioned Yahoo or AOL.

And while other media companies have pulled back on Facebook Live, PCH still does a weekly live show that sometimes generates 600,000 viewers.

Cullinane said the next step for PCH was to ratchet up its digital advertising business. He believes that PCH's direct relationship is an asset in an era when consumers are suddenly very conscious of how their information is being used online.

"Our value exchange with users is very open," he said. "We are able to activate that data. We can go where most publishers can't go."

"So many brands are dying to have direct-to-consumer relationship, and that's where we shine."