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Vail „06
What We’ll Cover This Afternoon
“State of the Industry”
The Future of Circulation
Power of One: Single Copy Buyer Study „06
Vail „06
Newspapers ’06
FOR IMMEDIATE RELEASE
April 19, 2006
NAA RELEASES ABC FAS-FAX ANALYSIS Online Audience for Newspaper Web Sites Sets
Another New Record in First Quarter 2006
…“Newspapers are implementing circulation marketing strategies that
deliver the most value to advertisers and make economic sense, such as
home delivery and retention programs that result in less subscriber turn-
over,” Sturm said. “The focus also is on total audience, and we are
now starting to see the positive impact that publishers’ innovations and
strategies to broaden their audience online are having on our audiences
and readership.”
According to new data released today by NAA, the online audience for
newspapers hit record levels in the first quarter of 2006, with more
than one in three of all Internet users visiting a newspaper Web site over
the course of a month.
Vail „06
Newspapers ’06
FOR IMMEDIATE RELEASE
June 23, 2005
NEWSPAPERS ARE SUCCESSFULLY
LEVERAGING THE INTERNET TO GROW
OVERALL READERSHIP BASE
Newspapers successfully attracting 18-34 year olds with their websites
New York – Scarborough Research…released an analysis of
“Integrated Newspaper Audience,” a new measurement that
combines the audience of traditional printed newspapers with the
audiences of their websites. The analysis found that newspaper
websites are contributing significant numbers of readers who do
not necessarily read the printed publication, resulting in large
audiences overall. The audiences for newspaper websites tend to be
younger than those of the printed newspaper, demonstrating that young
adults are interested in and engaged with newspaper content.
The Value of Newspaper Media:
Opt-In Advertising
•Where the advertising is a destination, not a distraction.
The Value of Newspaper Media:
Opt-In Advertising
•Where the advertising is a destination, not a distraction.
Contributors & Committee Members
The Process
• Robert Bolone, Vice President/Circulation – The Columbus Dispatch • Chris Blaser, Vice President/Circulation – San Francisco Chronicle • Vince Casanova, Vice President/Circulation – Tribune Publishing Company • Rosie Cassidy, Director/Circulation Operations & Technology, Gannett Company Inc. • Chris Christian, Vice President/Circulation – The Kansas City Star • Ken Cogswell, Circulation Director – Kalamazoo Gazette • Barbara Cohen, President and Founder of Kannon Consulting
• Harry Davis, Vice President/Circulation – Austin-American Statesman • Arden Dickey, Vice President/Circulation – Knight Ridder • Nancy Green, Vice President/Circulation – Lee Enterprises • Mark Henschen, Circulation Director – North County Times (Escondido, California) • Jerry Hill, Circulation Director – St. Petersburg Times • Sandy MacLeod, Vice President/Strategy Implementation & Human Resources – The Toronto Star • Kathy Michalak, Vice President/Circulation – The Press Enterprise • John Murray, Vice President/Circulation Marketing – NAA • John Newby, Circulation Director – The Dispatch (Moline, Illinois) • Gayle Pryor, Vice President/Circulation – Media General, Inc. • Robert Rubrecht, Director/Circulation Marketing – NAA • Daniel Schaub, Senior Vice President/Circulation – The Sacramento Bee • Doug Sumrell, Vice President/Circulation, Morris Communications Corporation • Al Smith, Vice President / Circulation Cox Newspapers • Romy Trahan, Senior Consultant Kannon Consulting
• John Walsh, Senior Vice President/Circulation – The Dallas Morning News • Don Waterman, Vice President/Operations – Ottaway Newspapers, Inc. • Owen Youngman, Vice President/Development – Chicago Tribune
Development of the Project
The Process
1. Collection, Dissemination and Study of Data – Key Resources:
• Demographic and Media Usage Data • NAA’s Horizon Watching • NAA’s Circulation Facts,Figures andLogic
2. Scenario Planning Session w/ Kannon Consulting
3. Consensus Building Session & Review of Deliverable
4. Input From NAA Circulation Federation Board of
Directors
5. Final Draft and Publication; The Future of Circulation:
A Look at the Present and Long Term Outlook of
Newspaper Circulation
•Address specific delivery and leveraging the distribution network
• Distribution Centers ? (>25k)
1996 : 24.2% 2004 : 75% 2010 : ?
• Adult Carriers?
1996 : 51% 2004 : 81.4% 2010 : ?
• Deliver Other Newspapers?
1996 : 17.1% 2004 : 40.5% 2010 : ?
Power Ideas From the Past
•Increased role for single copy, retail marketing
Newsracks Sales as a Per Cent of Total Single Copy:
1996 : 43% 2004 : 33% 2010 : ?
Bar Codes
1996: 49% 2004 : 86% 2010 : ?
Scan based trading
2004 : 55% / 3 accounts 2010 : ?
Dedicated merchandisers
Power Ideas From the Past
Single Copy
• Third Party
- College Readership Programs
Customer Service, Distribution and Single Copy
• New Locations Sam’s Club, Costcos, Gyms, Preschools etc.
• Increased Scan Automation
• Additional Foreign Language Products
•Focus on subscriber profitability, smart acquisition and retention
• Telemarketing
1996: 59% 2004: 41% 2010:?
• Accept Recurring Credit Card Payments
1996: 30.2% 2004: 88% 2010:?
• Recurring payment plans well beyond 15%
Power Ideas From the Past
•Focus on subscriber profitability, smart acquisition and retention
• Average Cost of Acquiring a New Subscriber
– 1996: $19.25
– 2000: $28.20
– 2002: $30.42
– 2004: $42.00
– 2010: ?
Power Ideas From the Past
•Focus on subscriber profitability, smart acquisition and retention
• Direct Marketing, New
Forms of Face to Face
Sales
• Retention Programs:
Applied Technology
Power Ideas From the Past
•Focus on subscriber profitability, smart acquisition and retention
• Value added Programs
• Leveraging Online Assets
Power Ideas From the Past
•Focus on subscriber profitability, smart acquisition and retention
• IVR for Incoming Calls
1996: 19% 2004: 35% 2010:?
• Offer Customer Service on Online?
1996: 0% 2004: 78% 2010:?
• Less than 20% Offer Real Time Interactive Service
Power Ideas From the Past
Customer Interaction: Applied Technology
•Focus on subscriber profitability, smart acquisition and retention
• Home Delivery
– 15% are 18-34’s
• Single Copy
– 30%+ are 18-34’s
Power Ideas From the Past
•Emphasis on readership/audience
– NADBASE for total reach of print/online
– Online + paid print + niche
+ non sub products=REACH
– ABC for preprints
– Reader Profile Service
– Readership behavior score (RBS)
Power Ideas From the Past Power Ideas From the Past
“There‟s a war going on...Between
the people who are trying to do
something and the people who are
trying to keep them from doing
something wrong.”
—Bill Creech, Retired Gen.
The Future of Circulation
“If you don‟t like change, you‟re
going to like irrelevance even less.”
—Eric Shinseki, Chief of Staff, US Army
The Future of Circulation
Readers • Older, more diverse
Boomers 4 in 10 by 2010 over 45 - best readers,
control more money, 50 is new 30!
Drivers of Change Impacting Newspapers
• Demographics and lifestyle drive down readership
Growing Hispanic population prefers to read
Spanish newspapers, younger people spend time with other media
Readers
Drivers of Change Impacting Newspapers
•Consumer access to internet – 7 in 10 use in 2005
•Other media steal time/change habits– satellite radio, DVRs, MP3s,
blogs, podcasts, Tivo
Readers
• Readers want specific content targeted to their interests Arizona Republic - 100 products, aggregating audience, use research, doable anywhere
Drivers of Change Impacting Newspapers
• Free content is changing the business model Free content on websites, free pubs, Craig‟s List
• Newspapers respond with suites of new free and niche products Corner News, Metro, Quick, RedEye, Examiner, Express, House to Home, VOW, Bluffton Today
Advertisers
• Traditional advertisers - department stores and auto changing Consolidations moving ads to regional, national buys away from local ads & into other media
• Target marketing challenging newspaper revenue models and streams increased zoning, moves to direct mail, cable TV and internet
• ROI metrics replace mass audience approaches
Drivers of Change Impacting Newspapers
Advertisers
• Classifieds moving to online and paid to free like Craig‟s List
Targeted marketing programs and database intelligence collection
• Audiences with specific interests sought by marketers
Drivers of Change Impacting Newspapers
Competition • Advertiser targeting driving direct mail ,
cable TV, internet use
• Internet spending accelerating
• Craig‟s List and Monster impact classified revenues
• Internet/24 hour cable source for national news
Drivers of Change Impacting Newspapers
Regulation
• State and Federal regulations will continue to change the subscription and distribution models
Drivers of Change Impacting Newspapers
Regulation
Drivers of Change Impacting Newspapers
• Acquisition model shifting to retention/CRM model
• Distribution model increasingly challenged by independent contractors, unions and litigation
Technology
• VoicePort
• Exact Target
• PriceLine.Com Model
• Combined Call Center
• Sliceable/diceable Upgraded audience databases – G2, Astech Maxx, MSG‟s MMS, others
Drivers of Change Impacting Newspapers
Customer Service
Self-service at the website
payments, EZPay, starts/stops,
vacations, NIE contributions,
email transaction confirmation,
added value programs
Customer Service, Distribution and Single Copy
Requested products Unbundling of TV Book
–Orange County, CA
Unbundling of Business/Stocks
– Austin American Statesman
Distribution
• Additional Niche Products
Neighborhood, Home, Health, Lifestyle, B2B, Real Estate
Customer Service, Distribution and Single Copy
• Print Product Delivery
40% of newspapers deliver other newspapers
• Household Specific Delivery
• Competitors Combining Resources
Single Copy
•3rd – Party
- College Readership Programs
Customer Service, Distribution and Single Copy
• New Locations Sams Club, Costcos, Gyms, Preschools etc.
• Increased Scan Automation
• Additional FREE & Foreign Language Products
= PURSUIT OF THE OCCASIONAL READER
Single-Copy Buyer
Study 2006 Comparing 2001 and 2006:Overview & Implications
Demographic Information: The Purchaser
Profile By Purchasing Patterns
The Decision to Buy
Promotional & content factors influencing purchasing
Motivation, Preference and The role of Convenience
Pricing and perceptions of value
Spending by single copy buyers at grocery & c- stores
Single Copy Buyer Study „06
The Seven Sites: • The Hartford Courant
• Dayton Daily News
• The Oklahoman
• The Sacramento Bee
• The Florida Times-Union, Jacksonville
• The Frederick News-Post
• The Reno Gazette-Journal
Total sample: 5152 Adult Purchasers
Single Copy Sales Channels
• Convenience Stores
• Grocery Stores
• Drug Stores
• Restaurants
• Mass Merchandisers
• Others
Single Copy Purchasers
Weekdays Sundays
Men 61% 38%
Women 39% 62%
18-34 31% 37%
35-54 46% 44%
55+ 23% 19%
Rarely 0-2
Occasional 3-4
Frequent 5-6
50% of weekday single copy buyers
purchase 5 or 6 issues per week
NAA Single Copy Buyer Study „06
NAA Single Copy Buyer Study „06
Almost half: 48% of Occasional Buyers were
influenced to buy the weekday newspaper by
Front Page, Price or Promotion
Decision to purchase made before or after
seeing the newspaper – by frequency
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Rarely
1-2
Occasional
3-4
Frequent
5-6
In Advance
Upon Seeing
Promotional Influence on Purchasing
Decision– Today (Weekday)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Rarely
1-2
OCC.
3-4
Frequently
5-6
Front Page
POP Displays
Discounts
Do point-of-purchase promotional displays
influence the decision to buy the
newspaper?
Daily
18 to 34 - 32%
35 to 54 - 21%
55+ - 13%
NAA Single Copy Buyer Study „06
Usual Influence of the Front Page
by Frequency
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Rarely
1-2
Occasional
3-4
Frequent
5-6
Freq/Occ.
Rarely
Never
NAA Single Copy Buyer Study „06
More than half: 58% of Occasional Buyers
Pick the Check-out Line as the Best Location
• Focus on the Occasional Reader
• Casual Readers Acquire Newspapers in a manner that fits their lifestyle
• Single Copy Purchasers are influenced by:
– Front Pages
– POP Displays
– Convenient Locations
• The Newspaper must be Compelling & Relevant
• Promotion is critical
NAA Single Copy Buyer Study „06
Summary:
A Few Considerations
Audience Development and Consumer Marketing
•Keep an open mind
•Remember this is about the future
•Accept brutal realities
•Challenge the Status Quo
• Focus primarily on print
• Bullish not Bearish on the industry
• Ignore current ABC limitations
What will be our Currency?
•Counting copies will not be enough.
•Tracking readership may not be enough
•Measuring total reach is where we are headed!
What’s driving the change?
–Single Copy reductions
–Free distribution publications
–Free content
–Advertiser demands
Audience Development and Consumer Marketing
Toronto might be your future
Free Online Paid
craigslist
Audience Development and Consumer Marketing
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005S
Free Dailies Exclusive
Duplication
Paid Dailies Exclusive
Total Reach 2,098,700 1,967,700 2,006,800 2,060,700 1,972,300
Weekday Readership - Paid versus Free Dailies NADbank 2001-2005 – Toronto CMA Adults 18+
Readership is Here to Stay
Why it is more important to measure Readership than count Circulation.
• Readership provides a truer picture of a newspapers‟ total audience.
Circulation represents a smaller portion of the reach of a newspaper (Toronto Star – 3 readers per copy)
• Readership provides complete audience profiles. Key data required for strategic planning as well as media planning and buying.
• Readership levels the playing field versus other media. Audience is where the game is – viewers, listeners and readers.
• Readership estimates are available for content readership across media vehicles.
Combined reach of newspaper content can be measured for print and the Internet.
• Readership acknowledges pass-along and free distribution. In an era of putting the content wherever the readers are, readership captures the now
valued non-paid audience.
Audience Development and Consumer Marketing
Challenge the Status Quo
Are we even measuring the right thing?
Good Reader? Bad Reader?
Audience Development and Consumer Marketing
A Future Measurement Model Perhaps
TORONTO STAR
Total Market Reach
For 12 months ended September 30, 2005
Print Variance % Variance
Toronto CMA 2004 2005 Vs 2004 Vs 2004 2004 2005 Vs 2004
Home Delivery paid 296,000 296,000 0 0.0% 406,000 406,000 0
Single Copy paid 70,000 70,000 0 0.0% 144,000 144,000 0
Home Delivery samples 35,000 35,000 0 0.0% 35,000 35,000 0
Other samples 20,000 20,000 0 0.0% 60,000 60,000 0
NIE 9,000 9,000 0 0.0% 0 0 0
Campus 20,000 20,000 0 0.0% 5,000 5,000 0
TOTAL CMA AVERAGE CIRCULATION 450,000 450,000 0 0.0% 650,000 650,000 0
TORONTO CMA PRINT ONLY READERSHIP (SOURCE: NADBANK) 1,054,100 1,035,000 (19,100) -1.8% 1,456,200 1,425,000 (31,200)
PRINT READERS PER COPY - 0.0% 2.24 2.19 (0.05)
OnlineONLINE ONLY READERSHIP (NADBANK CMA) 500,000 500,000 - 0.0% 100,000 100,000 -
TOTAL CMA PRINT AND ONLINE REACH - 0.0% 1,556,200 1,525,000 (31,200)
TOTAL CMA HOUSEHOLDS
TOTAL PENETRATION
Monday-Friday Saturday
2.34 2.30
1,554,200 1,535,000
2,250,000 2,275,000
69.1% 67.5%
1. Begin Hiring & Training Skill Sets
• Experts in Sophisticated Marketing
7 Recommendations
-- Analysts for understanding data, script writing and ROIs on circulation projects.
• Technology & Customer Insight
--Hire People who can make us more effective and efficient.
2. Upgrade Database Technology, Content and Applications
• Circulation will have to be successful in adapting to new database marketing technologies and initiatives
7 Recommendations
3. Improve Metrics
Three New Major Types of Metrics
1.Audience Measurements
2. Resource Allocation
3. Advertiser ROI
7 Recommendations
4. Share Accountability
• Must Share Accountability for Readership and Circulation throughout the Organization
7 Recommendations
• Must Revamp Systems
• Reengineer Processes
• Broaden Distribution Efforts
5. Re-Build Infrastructures
7 Recommendations
6. Focus on Marketing & Promotion
• Promote the Value of the Newspaper
7 Recommendations
• Must Promote the Total Newspaper‟s Portfolio
7. Build Multi-Platform Readership
• Grow Audience and Readership Both Online and Print – Cross Promotion
7 Recommendations
1. Begin Hiring & Training Skill Sets
7 Recommendations
2. Upgrade Database Technology, Content and Applications
3. Improve Metrics
4. Share Accountability
5. Re-Build Infrastructures
6. Focus on Marketing & Promotion
7. Build Multi-Platform Readership
A Final Thought
“Somebody has to do something,
and it‟s just incredibly pathetic
that it has to be us.”
—Jerry Garcia of the Grateful Dead
Audience Development and Consumer Marketing