With readership down and advertising revenues up throughout much of the newspaper industry, some of the country's biggest metro daily newspapers seek to gain greater market share by driving subscriptions through DRTV initiatives.
From Los Angeles to New York, metro dailies are riding a resurgence in the newspaper industry to increase readership. The Chicago Tribune is preparing to test direct response television later this year while The Los Angeles Times is reviewing the results of a recent DRTV test. The New York Times and The Wall Street Journal continue to expand use of the medium.
“The downturn we saw in the mid-90s was partly due to aggressive pricing by newspapers who were trying to pass along higher costs to readers. Newspapers had been hit with a double whammy with [rising] newsprint prices and decreases in ad revenue,” said John Murray, vice president of circulation and marketing for the Newspaper Association of America.
“That is behind us,” Murray said. “The recent strength of the advertising side of newspapers indicates they are doing well and are more prone to invest money in promoting the core product and to establish a better market share. Market share is first and foremost right now and the papers now have the means to go after it. Now they can focus on building market share and building readership.”
Publishers agree. “Although ad dollars are up, readership is down across most of the newspaper industry,” said Karen O'Neill, manager of marketing programs, for the L.A. Times. “Marketers are trying to find ways to boost subscriptions and are turning to direct marketing to see if it can be a source for generating subscriptions.”
Like the Los Angeles daily, Chicago Tribune is slating a test run of direct response spots, a tactic used briefly by the newspaper in the early 90s. The new iteration, however, will be a kinder, gentler kind of pitch for the Windy City daily.
“DRTV in the past had been focused on a price offer rather than on a value proposition and that cannibalized existing subscriptions,” said Colette Hogan, director of consumer relations, which oversees direct response programs. “What we are looking at by going on television is our acquisition mix for subscribers. We want to find out if direct response television is a viable acquisition source. We have found the more voluntary the offer, the longer [subscribers] retain.”
Like many other major metro newspapers, Chicago Tribune has seen a drop in daily readership, but a rise in Sunday readership in year-to-year comparisons. The Tribune's direct response test is the result of a broader marketing study to address those issues. “With direct response television we are looking to incorporate learnings out of our branding study in which we tried to identify what customers value in the paper,” Hogan said. “You can get fairly insular in a newspaper and so we conducted 41 focus groups to understand what customers value in the paper.”
Tapping Chicago-based DRTV agency A. Eicoff & Co. to handle the creative and the media buy for the test program, the Tribune plans to highlight value and convenience of Sunday delivery. While Hogan would not disclose particulars of the campaign she did say the commercials will forego a discount but will provide an add-on offer, which is currently under test.
“Our Sunday paper is the leader in the market,” Hogan said. “We have a great Sunday product so we plan to sell the utility, the value and the convenience of home delivery in the campaign.”
Hogan would not disclose cost per order goals as part of the program. “Because it is a new source we will tweak our media buy accordingly to meet our goal.” To facilitate new orders the newspaper has upgraded its circulation system to execute more efficient delivery routes, payments and other functions. “We also spent a good deal of time upgrading it in order to accept credit cards.”
Meanwhile, Los Angeles Times has just completed a run of a its first direct response campaign dubbed “Delivery.” Allocating about 30 percent of its entire marketing budget toward direct marketing initiatives, which includes DRTV, the company is currently reviewing the results of the 60-second spot that had tested last August through October. Favorable test results from two spots prompted the company to target Sunday home delivery through the “Delivery” spot which ran during the first quarter.
“We successfully rolled out in January with a larger media buy,” O'Neill said. “We ran throughout all of January on some perimeter spots and in the Olympics and now we are off the air. We are deciding at this point whether to go back on in March or to go back during the third quarter.”
O'Neill said it is unlikely that the spots will run in the second quarter based on rates and available inventory and the poor cost per order that those conditions are likely to create. Although the spots have generated a low cost per order, O'Neill would not specify the actual figure but did say it was 30 percent lower than anticipated.
The spot was created by Williams Worldwide, the company's DRTV media firm that served as the producer for the spot, and featured a series of testimonials from actual Los Angeles Times readers who espoused the benefits of Sunday home delivery. The use of actual readers helped the company eliminate talent fees and to keep production costs down. The commercial offered a 40 percent discount on the rate and a free, weekend escape guide that lists “50 fun, affordable getaways.”
O'Neill said that about 50 percent of the calls to the 888 number translated to subscriptions but that that a number of existing subscribers used the phone number as a general customer service number. “Once you remove the number of those calls and look at the actual number of non-subscribers that translated to orders, the number is more like 75 percent.”
One of the challenges in creating the ad was the varying subscription rates throughout the Los Angeles market and so the spots featured a 40 percent discount rate, rather than an actual price. “I think we lost some people on that.”
Now the daily newspaper is trying to establish just how to use direct response as part of the overall marketing mix. “We are trying to figure out how many orders we can bring in through direct television, direct mail and direct radio. We are trying to figure out what role television will play in the overall marketing mix,” O'Neill said. “That is what we are working on this year. We made direct response television work for Sunday home delivery but can it work for seven day delivery. We are looking at building a test for that.”
On the East Coast, direct response has long been an effective strategy for two high-profile publications with national distribution. The New York Times has expanded its direct response approach as part of an overall branding campaign, dubbed “Expect the World.”
“We dabbled in direct response television for awhile but made a real push for it in September of 1996,” said Kirsten Von Hassel, manager of direct marketing. “Based on the success of two flights in 1997 we have slated two more for 1998 that will run in conjunction with our image advertising.”
“The image and direct campaign are integrated in terms of tone and manner and the direct campaign focuses on supporting the overall marketing effort,” said Von Hassel. “Both are working together to generate awareness and to support our sales efforts. The campaign has high awareness and we are happy to find that.”
The campaign, which is tagged with “Expect the World,” features a series of six, 60-second spots that offer a 50 percent discount on home delivery. Most of the spots target Sunday delivery, but one spot pitches seven-day delivery. None of the spots feature a giveaway.
The newspaper's image campaign is handled by Bozell Worldwide Inc. and its direct efforts by Bozell Direct, which handles the creative and the buy for the newspaper's direct response programs. “We are also now doing direct mail and we are in the process of integrating all of it.”
The newspaper, which has national distribution by piggybacking delivery through metro dailies in other markets, runs its direct response on a national basis against national news programming. “Our testing has directed our budget into news and news-related programming. That has helped us expand our orders and to announce home delivery to new markets.”
Although Von Hassel would not disclose costs per order, she said the direct campaign has yielded strong results that are in line with the newspaper strategy. “Our movement from outbound reflects a strategic shift to focus more on retention and quality rather than volume and quantity,” she said. “Our efforts support a continued movement toward evaluating our business for the long-term value and for its overall profitability.”
“The bottom line is the cost per order and retention number for direct response television are competitive with our more traditional outbound marketing channels and we were surprised by that.
“Direct response television and direct marketing are very targeted,” Von Hassel added. “When you have the benefits of direct you have better retaining customers who help make the home delivery rate base as strong as possible.”
The Wall Street Journal with its national distribution also deploys direct response nationally. “We tend to be more national as opposed to local,” said Joan Wolf Woolley, director of circulation.
The Wall Street Journal has run direct response television for years. “We are pioneers in the media, we have been doing it for decades,” she said. “Direct marketing is an important part of the circulation marketing mix and we are on-going with our work in DRTV.”
The daily business newspaper uses 60-, 30- and 15-second spots with a variety of editorial-related premiums and introductory subscription offers to drive readership, according to Wolf Woolley, who would not disclose response rates.
