A Fresh Approach to Boosting Circulation   

Newspapers should make more creative use of the demographic data they have on hand.

In the early days of newspapering, the circulation department was the poor relation of the business side, peopled by semiskilled order-takers and even, during the 20th-century circulation wars, outright thugs adept at wielding clubs and throwing rocks against the competition.

Those rough-and-tumble days are gone, but I fear that some of the seat-of-the-pants management style of the old circulation departments lingers, most notably in a failure to take full advantage of market information almost every newspaper has at hand.

Thirty years ago, many newspapers did not even know who their subscribers were. That information was often held by independent distributors who considered it their property. It took years of lawsuits and negotiations to remedy this, and today most newspapers do possess their subscribers' addresses.

Moreover, newspapers now know a lot more about their readers than ever before, thanks to Census data and readership studies. In addition to readers' addresses, most newspapers have information about their income levels, their educational achievements, how they spend their time--and a host of other demographic data. The problem is, the new wealth of knowledge about readers has not helped newspapers stem a long-term circulation decline.

Total weekday circulation for daily newspapers is down to about 56 million--roughly where it was in the mid-1950s, even though the national population has increased by 64 percent since then. Circulation peaked at 62.8 million in 1987.

There are many causes for the drop-off, chief among them the closing of weaker papers in two-paper markets, the allure of television, and the increasing demands on readers' leisure time. Newspapers' response to the decline has been fairly traditional--increased promotions, bigger and more frequent discount packages to lure new subscribers and, most recently, greater emphasis on "readership"--a larger and somewhat squishier number than audited circulation.

In effect, newspapers have been doing what they've always done while hoping for the best. One consequence is "churn," the constant rotation of subscribers in and out of discount packages. Many newspapers now find that they have to replace 50 percent or more of their circulation every year just to stay even, which greatly increases the complexity and cost of running a circulation department.

But there are ways to combat the negative trend other than through traditional responses. The key is to connect all the information that newspapers have on readers to specific circulation practices. For example, it would be useful for a newspaper to know how effective a promotional campaign was in attracting and retaining long-term subscribers in various socioeconomic and geographic segments.

Similarly, the effectiveness can be tracked over time, neighborhood by neighborhood, which can point up not only how well a particular promotion works but also weaknesses in quality of delivery. If circulation retention is good in one neighborhood and bad in another with nearly identical demographic characteristics, management has a clue as to where to focus attention.

These techniques also can be adapted to analyzing rack sales. I recall a conversation with Dean Singleton, chief executive of MediaNews Group, soon after his company took over the Denver Post. He couldn't understand why the Post's rack sales were so low on a major commuting route into Denver. A visit provided the answer: The racks were on the outbound side of the street, which made sense when the Post was an afternoon paper, but not after the Post switched to morning. The racks were switched, and sales rose.

This was an easily checked anomaly, but analyzing the hundreds of racks a large newspaper might have is harder. What if a newspaper could quickly monitor rack sales at every 7-Eleven store in its market? Problem sites would be revealed, and the cause of poor sales might turn out to be something as simple as a rack that's been buried in a corner behind the ice machine.

A newspaper already has all the information on demographics, market segments, rack location and so forth that it needs to manage circulation more efficiently. The problem is the information is buried in circulation departments whose main and sometimes overwhelming mission is processing orders and customer complaints.

But there is software available from such suppliers as The Barry Group that can pull the information together and integrate it into a format that enables managers to ask questions about circulation variables and get quick answers. Using this would finally help to transform circulation departments into effective marketing forces in these increasingly competitive times, no clubs or rocks needed.