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Circular Distribution

Circular Distribution. Where do we go from here…?. Alliance Media a division of NSA Media. NTMC Conference New Orleans, LA March 7, 2012. Agenda. The Ultimate Shopper Media Evolving Distribution Landscape Growing Concerns Drive Need for Change Opportunities for Efficiency.

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Circular Distribution

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  1. Circular Distribution • Where do we go from here…? Alliance Media a division of NSA Media • NTMC Conference • New Orleans, LA • March 7, 2012

  2. Agenda • The Ultimate Shopper Media • Evolving Distribution Landscape • Growing Concerns Drive Need for Change • Opportunities for Efficiency

  3. The Ultimate Shopper Media • A Tool that Empowers

  4. Circulars connect Stores and Shoppers Shopper Store

  5. Usage remains widespread 72% of U.S. adults regularly or occasionally read circulars. High propensity users: • Female • 35+ • HHI $50 – 100K •  Shoppers seeking value

  6. Evolving Distribution Landscape • Shoppers Driving Change

  7. Newspaper circulation trending down… Daily and Sunday trending downward

  8. Alternative Distribution Options Expanding Established to address consumer demand for print circular delivery Sunday Opt In –Free packets of advertising delivered to newspaper non-subscribers that request it. Slightly younger, more value conscious reader compared to newspaper subscribers De-duplicated with paid subscribers Over 4 Million Opt-In subscribers since 2008 Walk Programs – Free packets of advertising delivered in areas where a viable newspaper option does not exist Delivered at block group levels with strong demographic composition

  9. Sunday Select is Effective and Efficient • Mainstream acceptance with most advertisers • Consistent YOY growth • High level of consumer acceptance • Capacity to expand long term… • IF properly executed • Opt-In is becoming the new paid

  10. Partially offsetting Newspaper circulation declines… Opt-in programs offsetting Sunday somewhat (4 million+ HHLDs)

  11. Growing Concerns Drive Need for Change • Reaching People Effectively in a Fragmented Environment

  12. Digital Newspaper Opt-in Mail/Carrier Circular Distribution is at a Crossroads

  13. Some Good News… Newspaper Delivery is preferred by most However… <25 demo prefers Digital and USPS delivery

  14. Growing Concerns… Solutions? • Shiny Toy Syndrome • Growing list of concerns requires viable solutions Growing Concerns

  15. Walk Programs Gaining Acceptance Four Factors are Driving Advertiser’s Viewpoint ROI Pressure Postal Concerns Improved Technology Reliability

  16. ROI Pressure • Rising costs (i.e. paper, energy, and postage) adversely impacting shared mail ROI. • Negative perception of “Junk Mail” • “15 years ago mail made its way into the home, now it only makes it to the recycling bin.”

  17. ROI Pressure • Balance of distribution increasingly skewed towards higher cost TMC • The trend has exponentially • negative impact on ROI. Source: NSA database: Newspapers with high usage and opt-in products offered to ensure consistency.

  18. Postal Concerns • Weight based pricing is killing retailers who distribute 12+ page preprints • Service cutbacks • Fewer distribution facilities • Fewer shifts • Fewer workers • Fewer delivery days • More difficult to make delivery timing guarantees

  19. Enhanced Technology  Improved Precision • Geo-tracking • Real-time tracking • Where and when pieces are distributed • Digital alternatives • Mobile, iPad, websites, e-blasts, consolidators • Alternatives for those who Opt-out of a delivered piece

  20. Opportunities to Drive Efficiency • For Advertisers and Newspapers

  21. Adapting to new realities… Empowered Shoppers • “Convenience” is situational rather than absolute, and empowers contemporary shopping habits… • We know… • Print circulars remain wildly effective among shoppers What we’re finding… • Digital has become more of an Additive step, as “Discovery” leads to “Action” Convenience is being redefined by the Shopper…

  22. Adapting to new realities… “Costs Must Be Reined In” • Clients demanding: • Greater accountability • Improved efficiency • Pinpoint accuracy • Reach across demographic targets • Multiple touch-points

  23. Reining in costs in print TMC Product SMC/Select Product • Opt-in preferred, Opt-out may work if… • If opt-out is truly an option • If opt-out option is HIGHLY visible • If waste is aggressively weeded out • Doesn’t have to be all or none • Use carrier where practical • Use shared mail for rural or walk adverse geographies • Transition program over-time starting with the easiest ZIP Codes to convert to carrier • Learn what works • Lower your risk

  24. Reining In Your Costs Digital Products • Suggest a digital alternative to opt-out • Passive, “They are on our website each week.” • Active, “We can e-mail them each week.” • Digital alternatives that are active opt-ins are an asset • These become as valuable as your subscribers • Only you will have a non-duplicated list of consumers, by ZIP Code, who want a digital copy • What is a reasonable CPM for opt-in digital homes? • How should ads be served? e-Mail? Consolidator? Direct Link?

  25. ReCap • Sunday Opt-In is essential to bring the mass audience an advertiser is looking for and eliminate the threat of continued audience erosion • Mid-week saturation delivered products are becoming harder to justify financially, even more so for those which are mailed • Move what you can to carrier delivery, Hybrid model • Aggressively seek opt-outs Alliance Media a division of NSA Media

  26. Thank You! • Dave Gusse • President, Alliance Media • dave.gusse@nsamedia.com • 630-729-2194 Alliance Media a division of NSA Media

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