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Lead with every audience data tool in the kit, successful advertising campaigns will follow

20 April 2014 · By Anne Crassweller

Newspapers have a lot to offer advertisers. The valuable content and platforms they provide are the place to start.

The next step is to employ a variety of data sources in the planning process; data is the key to delivering successful media campaigns with advertiser partners.

More than three out of four Canadians read a print edition newspaper each week. True as that is, it does not tell advertisers how and where to reach their audience.

Newspapers still reach a mass audience, but their greatest asset is their unique ability to provide content across many platforms and to engage different audiences via those platforms throughout the day.

Targeting and balancing messages across platforms — at the right moment in time — results in effective communication with customers, enhances the reader experience, and increases sales.

More than one in three Canadians read newspaper content online every week. Technology has played a huge role in enabling newspapers and their readers to better understand each other’s needs.

Newspapers have capitalised on their ability to publish and target their content across a number of platforms, and readers have jumped on the convenience and easier access to the news content they love.

Newspapers readers are not all the same; advertisers want to speak with their customers when and where they are reading. Reach of newspapers across age groups has remained stable, but there is a growing difference in how audiences consume their content.

In the average week, 37% of adults ages 18 to 49 read newspaper content online, compared to boomers and older adults (25%), who continue to prefer their printed editions.


How media companies can manage acquisition budgets on the fly

02 April 2014 · By Jim Fleigner

Although newspapers often create a plan for acquiring new subscribers at the start of each fiscal year, the reality is events happen throughout the year that create unplanned changes in goals and strategies.

As a result, circulation departments often are expected to simply pivot in direction and take off on a new course seamlessly and instantaneously.  

These changes in direction, however, often are made with little understanding of their underlying economic impact.

Consider the following situation: Your publisher rushes into your office and says, “There is a pending shortfall in advertising revenue that must be covered by circulation. I need you to cut your circulation acquisition budget by 20% for the rest of the year, but I need you to do it while minimising the impact on our circulation goals for the year.”

How would you think about implementing this request?

  • Would you simply cut your entire acquisition budget by 20% on a pro rata basis across all channels, programmes, zip codes, frequencies, and subscription terms?

  • Would you focus 100% of the cuts on your worst-performing channel? And if so, how would you define “worst performing?” Is it the channel with the highest average cost per start, or is it the channel with the lowest introductory rate? Or is it the channel with the lowest lifetime retention?

This does not have to be a frantic, knee-jerk exercise. With the right data at their fingertips, circulation managers can answer such requests with little anxiety, and with a high degree of empirical strength.

The first element to this exercise is to quantify a phenomenon that is intuitively understood by many circulation executives, but is rarely used in explicit decision making.  This phenomenon is the law of diminishing circulation returns, which can be seen in the charts below.

For every acquisition dollar that is spent, it is often the case that the productivity of that dollar decreases as the total acquisition dollars increase.

For example, this top 50 newspaper spent roughly US$8 million to acquire new starts. The first, most productive US$1 million generated enough copies to add more than 10,000 in average circulation, which is a very reasonable contribution level.

However, if we look at the next US$1 million spent, the productivity falls to almost one-half of the first US$1 million, and so on.  

By the time we get to the final US$1 million, the copy productivity is more than 90% lower than the first US$1 million, with a contribution to circulation of only about 700 average subscribers – probably not enough to warrant the acquisition investment in the first place.

This phenomenon is true not only at the aggregate level, but it is true within each channel, as well. It is also true at the delivery frequency level, as well as the subscription term level. In fact, for every segment scheme that you might use to manage your subscriber acquisition business, there exists a unique circulation curve for each and every segment.

In the vast majority of the segments, the relationship between acquisition investment and circulation contribution is not linear. Quantifying these relationships allows newspapers to make better decisions about where to invest money and where to avoid investing it.

Going back to our hypothetical example, if we need to trim our acquisition spend by 20%, we should focus on those segments that are at the far right of the curve, as those segments contribute very little to overall circulation relative to the dollars spent.

However, this approach still has one major flaw – it does not account for the fact these copies are also generating a lifetime value of differing amounts, which is another way of saying that “not all copies are created equal.”  

In other words, in an industry where every copy has its own unique combination of weekly net margin (driven by circulation revenue, pre-print revenue, newsprint and ink expense, and delivery expense), lifetime retention, and upfront acquisition expense, the only way to normalise for these differences in economic terms it to unitise that performance on a “per copy” basis. And then prioritise decisions using that metric.

In the example below, a top 50 newspaper has segmented its new starts by acquisition channel, delivery frequency, and original subscription term.

For each start, it has calculated a lifetime net margin and netted that against the upfront acquisition cost, to arrive at a net margin surplus (or deficit) for each start, which is then bundled with other similar starts to arrive at the net margin surplus for each segment.

Then the newspaper has divided that figure by the total copies that will be generated from that collection of starts. Dividing one by the other yields the two charts below.

By sorting the segments from best to worst performing, while holding circulation constant, this circulation executive can now reply to his boss’ request with an empirically grounded answer about how to best cut 20% from the acquisition budget.

All we have to do is start with the worst performing segment (i.e., the segment on the far right side of the chart) and stop selling into that segment. If we have not yet reached our 20% target level, we move on to the segment to the immediate left. And we continue until the 20% reduction in acquisition expense has been reached.

By focusing on those segments that have the worst combination of lifetime net margin surplus on a circulation-adjusted basis, newspapers can become extremely targeted and can make valuable adjustments to their acquisition budgets throughout the year — even if the total dollar amount is required to change.

7 keys to launching a successful membership programme for your media company

18 March 2014 · By Elisabeth Clark

So, today let’s talk about velvet ropes and turnstiles.

Membership seems to be one of the newspaper industry’s buzzwords for this year. Nearly every audience-focused conference has at least one session on membership. 

Why, all of a sudden, do we have so much focus on membership?

Most newspapers have launched membership programmes in order to add additional value to their core product offers. Newspapers quite frequently launch a membership programme in conjunction with (or shortly after) starting to charge (or meter) their digital content. 

The word “membership” is used in an effort to change the perception of the relationship between the newspaper and its audience to something that goes beyond transactional exchanges (audience paying to receive access to content).

The velvet rope: As Charlie Beckett of the London School of Economics notes in a blog post, the membership model is focused on encouraging readers to see themselves as members of an exclusive club. This club has certain perks or rewards, so it’s a lot more like a velvet rope than a paywall. The outcome is arguably the same as a paywall, but it starts with the benefits instead of the turnstile and a request for money. 


Driving toward newsroom cutbacks? Stop and ask for directions

12 March 2014 · By Lynne Brennen

As media companies look to cut costs in the newsroom, the counter-balancing revenue loss needs to be included in the calculus: the inability to raise prices or charge for new products, including digital subscriptions.  

It’s the illusive “quality” measure. Where do cuts impact quality and where do they not? And have we gone too far?

Each newspaper needs a relevant “quality” measure determined by the readers. These inputs will help identify less important assets and those that are so critical to readers’ experience that they should be protected, if not reinforced.  

We need to talk to our readers on a regular basis to conduct this gap analysis. We need to determine what is quality to the reader and where does the newspaper meet, beat, or fall short of those expectations?  


Which generation is driving creative media disruption? X marks the spot

02 March 2014 · By Dan Johnson

Full disclosure: I am a Gen Xer.

In the United States, Generation X (Gen X) refers to people born roughly between 1965 and 1984, who are now between 30 and 50 years old. It is a relatively small generation compared to and sandwiched between the baby boomers and the millennials.

Despite its size, Gen X is the quiet, driving force behind much of the creative disruption of how media is consumed.

Gen X came along at a wonderful time for media. As kids, they had newspapers in their homes, but they grew up and came of age during the most rapid advance of media technology in history. They watched colour cartoons every Saturday morning. They were the first kids to be able to tape shows and watch later without commercials.

Gen Xers were early adopters of portable music. They moved the video arcade to the living room. They ushered in the beginning of 24-hour news coverage and watched reality television before anyone else. They were early visitors to the very first HTML Web pages.

The boomers lit the torch, and Gen X ran with it.

The unique nature of this transitional audience presents some wonderful opportunities for newspapers.

Gen X understands the tradition and integrity of the local printed newspaper, but embraces technology of all sorts. In fact, Gen Xers want to get information in multiple ways rather than on just one device or another. Like their millennial children, they have a thirst for information and want it at their fingertips at all times.


What media companies can learn from a family-owned Canadian music store

26 February 2014 · By Anne Crassweller

I joined a band four weeks ago. I have never played a wind instrument before – unless the recorder counts.

The New Horizons Band is sponsored and run by Long & McQuade, a family-owned music store in Canada. The store started out with a single location, near a subway station in a “mixed” neighbourhood in west Toronto. The company now has many locations across Canada. Among other things, they supply most – if not all – of the instruments children rent in Toronto to play in their school bands. That is how I came to know them.

We have been loyal customers since we rented our first trumpet 25 years ago. Since then, my family has rented and bought many instruments, music, and paraphernalia at Long and McQuade. On a quiet weekend, my son, who lives around the corner from the flagship store, will walk over and rent an acoustic guitar and amplifier for about C$15 – sympathies to the neighbours! He still plays a couple of other instruments.

My very new and wonderful band experience got me thinking about how to connect and build your customer base in a competitive marketplace.


Media companies need road map guiding them toward new print subscribers

18 February 2014 · By Jim Fleigner

When it comes to subscriber acquisition, most analysis done by media companies reviews historical performance, but does not offer any concrete insights about how to improve that performance.

It is not enough to simply highlight flaws and mistakes.

Optimisation of subscriber acquisition strategies must provide a blueprint – explicit, quantifiable guidance on starts that can be improved so that each start reaches sufficiency (i.e., a start’s projected lifetime net margin exceeds its expense to acquire the start).  

One tool to accomplish this is a set of break-even curves.  As seen in the chart, every start (or segment of starts) has a historical level of weekly net margin and retention performance, which is represented by the location of the gold star.

In this case, seven-day starts with a three-month term from the Crew channel incurred an acquisition cost of US$97.57. Those starts were retained for 14.4 weeks (on average) and generated a net margin (circulation revenue, preprint revenue, newsprint and ink expense, delivery expense, etc.) per week of US$2.32.

Collectively, these starts generated an average rate of return of -93%, which means the projected lifetime net margin fell substantially short of the acquisition expense incurred to generate the starts.

The location of this gold star is then compared to the black curve, which represents the various combinations of weekly net margin and retention that will allow that start to reach sufficiency (i.e., a rate of return of 0%) at the current cost per start (i.e., US$97.57).

Thus, the goal of a blueprint is to explain exactly how much performance must improve along each of the three drivers of rate of return (cost per start, weekly net margin, and weeks retained) to migrate the gold star to the black curve, and then eventually exceed it (i.e., generate a lifetime surplus in excess of its acquisition expense, which should be the sustainable long-term goal.)


5 reasons Postmedia sells advertisers on the audience it can deliver, not the platform

06 February 2014 · By Jeff Clark and Siobhan Vinish

After realising its high-quality audience spans across all four major platforms of print, desktop, tablet, and mobile, Postmedia adopted an audience-based approach to selling its inventory.

The online audience is swiftly moving to mobile; in fact, one could say the audience already has moved. In order to capitalise on this reality, publishers should extend desktop campaigns onto mobile and follow their consumers, taking a more audience-based approach to selling.

Here are five reasons publishers should move to a platform-agnostic approach to selling inventory. 

  1. Scale/availability of inventory: The sheer volume of mobile inventory available to publishers today makes it an obvious reason to move to an audience-based selling approach. For many top publishers, inventory availability for desktop impressions in such key channels as auto and finance is extremely limited. Extending desktop campaigns to mobile will allow more campaigns to be sold and more revenue generated.

  2. NASCAR effect: A lot of desktop Web sites have the “NASCAR effect,” named for the way National Association for Stock Car Auto Racing vehicles are covered with corporate sponsor logos. These sites attempt to torque the product to get as many advertisements as possible on a page, in order to increase inventory.

    When dealing with mobile devices, there is a lot less real estate than a desktop Web site and, therefore, you are limited in the amount of ads you can display. Although this could be a bad thing, in terms of the amount of available inventory in the future, for now it is a good thing for publishers and advertisers alike.

    Typically, on mobile pages there is only one ad and, in many instances, it is in a fixed position at the bottom of the screen. When only one ad is showing, advertisers don’t need to worry about the so-called “NASCAR effect.” The result should be better campaign performance for advertisers and repeat business for publishers.


Media companies must prepare for the “Internet of Things” with Big Data

26 January 2014 · By Elisabeth Clark

So, I’m still humming “Chim Chim Cher-ee.”

A month later, the song is still stuck in my head. As it happens, over the holidays, we went to see the film, Saving Mr. Banks. This is the story about how Walt Disney convinced the author of Mary Poppins to sell him the rights to the story so he could create the classic 1964 film.

The Disney movie reminded me of one of my first trips to Walt Disney World. I remember my parents taking me to the Carousel of Progress and telling me it debuted at the 1964 World’s Fair. Hmmm. There’s 1964 again!

The Carousel showcased family life in several different eras, ending with the “World of Tomorrow” or what the vision of home life would be in the future.

Fast forward to 2014, and we are about to be living in a world of tomorrow that maybe even Disney couldn’t quite imagine. We have the video phones that Disney showcased, and many new and improved ways of communication between people across the planet.

But Disney never predicted our things would be communicating, too.

The viral video, “What does the fox say?” offers a clue.  

This tongue-in-cheek video, which literally questions the sound a fox makes, went viral last September. But instead of imagining what the fox says, how about we imagine what your things could say about you.

In the not-so-distant future, devices like your coffee pot will begin communicating through the “Internet of things.” What would your coffee pot say about you? Google certainly wants to know what your coffee pot says. 


Toronto Star creates sustainable Newspapers in Education revenue model

19 January 2014 · By Nadine Chevolleau

For more than 30 years, the Toronto Star, through our Newspaper in Education (NIE) programme and with donations from our subscribers, has subsidised the cost of newspaper subscriptions to schools in our delivery area.

In fact, even with vacation donations from subscribers, our annual expenses to operate our NIE programme have exceeded revenue from school subscriptions.

No one would argue against making newspaper subscriptions more affordable to schools. However, in a time when most newspapers are experiencing declines in revenue and readership, we had to take a serious look at how we ran our NIE programme and ask a tough question: Is this sustainable?

The answer was easy; taking a financial loss in NIE year over year was definitely not sustainable.


About this blog

The Satisfying Audiences Blog aims to reflect print and digital content not just across platforms but extending into consumer events, non-news-related subscriptions and other audience vehicles for newsmedia companies. This blog written by INMA members is dedicated to identifying the emerging linkages between content, audiences, and platforms. The blog is an initiative by the INMA North America Division Board of Directors.

Meet the bloggers

Lynne Brennen
New Leaf Media Consulting
Montclair, New Jersey, USA
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Nadine Chevolleau
Consumer Marketing
The Toronto Star
Toronto, Ontario, Canada
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Elisabeth Clark
Vice President
Audience & Engagement
South Bend Tribune
Indiana, USA
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Kathleen Coleman
Sales & Marketing
S-R Media
Spokane, Washington, USA
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Cynthia Collins
Social Media Marketing
The New York Times
New York, New York, USA
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Anne Crassweller
Toronto, Ontario, Canada
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Jim Fleigner
Managing Partner
Impact Consultancy
Santa Monica, California, United States
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Claire Hawley
Audience Acquisition
Los Angeles Times
Los Angeles, California, USA
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Dan Johnson
Vice President,
Business Development
Spokane, Washington, USA
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Sandy MacLeod
Vice President
Consumer Marketing and Strategy
The Toronto Star
Toronto, Ontario, Canada
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John Newby
The Times
Ottawa, Illinois, USA
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Siobhan Vinish
Senior Vice President
Marketing & Audience Development
Calgary, Alberta, Canada
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