As some news organizations prepare to kick off their much-anticipated experiments with paid content, others are focused on ways of hanging onto revenue they’re already collecting.
A new report sponsored by the World Association of Newspapers (WAN-IFRA) tracks a range of initiatives in the areas of advertising, subscription marketing, outsourcing and cost-cutting.
Satisfying advertisers, the report points out, will require a shift from simply selling them products to providing them the help they need with such challenges as figuring out search engine marketing/optimization and navigating their way into ad networks well beyond the boundaries of the local paper.
WAN says that serving readers will demand delivering a lot more value for their subscription dollars, noting by way of example Journal Register Co.’s expansion from “nine products on two platforms” in 2006 to “97 products on 7 platforms.” It also highlights the folly of twinning price hikes with cutbacks that gut the news report and fail to stir real innovation.
The full report, titled “Million Dollar Strategies for Newspaper Companies,” is available only to members of WAN-IFRA and is part of the “Shaping the Future of the Newspaper” project. An executive summary can be downloaded here without charge (PDF).
What I find most striking in the 70-page report are some new wrinkles on old tricks, especially ways that subscriber loyalty programs may be gaining ground as a preferred means of retaining customers. Done right, such programs may eventually morph into membership plans that could bundle a variety of a news organization’s products and help justify circulation price hikes that more and more papers are implementing.
Making it “harder to say good-bye to the newspaper”
Take, for example, the street-level bookshop at Politiken, the leading newspaper in Denmark. I stopped in there one drizzly Saturday morning last Fall after teaching in Poynter’s Scandinavian Summer School. I picked up a couple of travel guides and an English language version of a popular Danish novel. But I paid my bill and left the shop oblivious to the range of products and services available to Politiken subscribers via its Politiken Plus loyalty program.
“We can say 70 percent of (our subscribers) use Politiken Plus during the year,” the paper’s sales and marketing director, Poul Skott, told the authors of the WAN report. “The more products we have the better … the harder it is to say good-bye to the newspaper. It’s going to hurt a bit, because you can only get a Plus card as a newspaper subscriber.”
This Google translate page will give you a sense of what the program offers, including special offers on travel, restaurants and theater, and how the activities and deals of Politiken Plus are integrated into the newspaper.
In a follow-up e-mail, Skott told me that Politiken has eliminated discounts for new subscriptions, the first time, he said, that any Danish morning paper has been so bold in 35 years.
Discounting is still a way of life for most American papers, of course, but the incentive programs appear to be coming on strong.
The Los Angeles Times introduced a new reader loyalty program earlier this month, and the WAN report highlighted incentives offered by another Tribune Co. paper, The (Baltimore) Sun.
Canceling your subscription a money-losing move?
Coupons are an important part of Sun Rewards, with a wide array of them delivered in special quarterly sections provided to all home delivery customers. Coupons are enjoying a strong resurgence in these recessionary times, an industry trend highlighted by my Poynter colleague, Rick Edmonds, in a post last year.
Coupon use has been growing among upper income consumers, and the growth of such geographically-targeted services as Groupon show that newspapers certainly don’t have the coupon business to themselves.
In a phone conversation earlier this week, the Sun’s director of circulation marketing, Gary Olszewski, told me he tells Sun readers who are thinking about dropping their subscriptions that walking away from all those coupons means “they’ll be losing money by not subscribing.”
Like Politiken, though, the Sun also enables its subscribers to take part in a wide range of activities that go well beyond saving money at the grocery store.
Giving Readers Something to Talk About
Denisa Protani, manager of the paper’s Sun Rewards and Partnership programs, said the Sun is “bumping up the jam” on its loyalty initiatives by giving readers something to talk about. Rewards members can enter lotteries for movie premieres, dinners and other events. Last May, the Sun invited more than 100 families to spend all night camped out at the Maryland Science Center before a screening of “Night at the Museum: Battle of the Smithsonian.”
Tracking the impact of such initiatives on circulation is difficult, but the recent subscriber numbers indicate that the Sun lost fewer readers than other papers its size.
Acknowledging that the paper has gotten “a little bit thinner” during the hard times of Tribune’s bankruptcy, Protani said: “A lot of people hung in there with us because of the Sun Rewards program.”
She said she has hundreds of e-mails from thankful readers, many of them suggesting a link between the Rewards program and subscriber retention.
“Things have been tight but we will never drop our paper,” reads one such e-mail sent by Sun reader Michelle Smith and forwarded by Protani. “The discounts and contests are something we all enjoy as a family and the value far outweighs what we pay for the paper. Thanks so much!”
Among the more specific goals of the Sun Rewards program is to shift more of the paper’s home delivery customers into the ranks of EZ Pay auto-payment. Readers who subscribe via EZ Pay qualify for the additional benefits as “Sun Insiders,” benefits the paper gladly provides to the 20,000 readers who, as a group, are about 40 percent more likely to keep subscribing.
The principle at the heart of subscriber retention is customer value, of course. Midway through the WAN report I encountered a chart that frames the value challenge as well as any I’ve seen.
The focus on value as a function of benefits minus cost is hardly revolutionary. But the chart, produced by a Salt Lake City market research company called The Modellers, also serves up a useful mantra for media struggling to understand exactly what their content, advertising and other services are really worth to customers.
Framing a subscription as a membership with real value
Reading the report’s take on loyalty programs prompted me to call John Murray, who heads the audience development area for the Newspaper Association of America. Murray said he says he sees a new vision for such programs beginning to take shape: “Loyalty programs in the past have been seen as a retention tool, but I’m hearing more and more talk about the role they can play in bundling (the various products offered by a news organization). Loyalty programs should help retention, but they can also help in the justification of price increases that we’ve been seeing lately.”
By way of example, he pointed to price hikes scheduled to take effect Thursday at two Gannett papers, the Tallahassee Democrat and The Greenville (S.C.) News, both of which will begin charging for online content. (The common ownership comes through loud and clear in the similarity of the papers’ announcements, here and here.)
Despite the predictable fracas kicked off in the comments attached to both announcements, I think Murray may be on to something. Over time, I’m guessing that a membership that gets me the news and information I need across a variety of platforms — along with a lot of stuff and savings quite unrelated to news — will be something worth paying for.
