Nieman Foundation at Harvard
HOME
          
LATEST STORY
Newsonomics: On end games and end times
ABOUT                    SUBSCRIBE
Jan. 10, 2011, 1 p.m.

Applying analytics to magazine sales at Hearst

It’s safe to say that analytics are no longer online news’ equivalent of fantasy baseball circa 1998: relegated only to the geekiest corners of the operation. News editors and executives not only know what kind of hourly, daily, and monthly traffic their sites get, but they can tell you who’s their best referrer and what stories will predictably provide a pageview explosion. (Of course there’s still a debate on what role those metrics should play for news organizations.)

But what about on the print side? Specifically magazines: When it comes to newsstand distribution, the numbers are largely a guessing game. And when you’re spending millions on printing and delivering magazines, that’s an expensive guessing game.

“There’s a lot of waste, in a sense,” said Charlie Swift, vice president of database strategy and marketing for Hearst Magazines. “You may put out 10 copies, sell 4 and 6 get tossed.” The flip side, of course, being when you don’t stock enough magazines at locations where they sell out. Distribution has largely been based off previous sales at given locations, but variables can come into play, such as where magazines are placed (near the checkout vs. on a newsstand) and demographics in an area (or as Swift told me: “If you’re selling Cosmopolitan in a retirement community, that’s probably not a good idea.”).

“We believe there’s a way to make [distribution] more efficient by putting analytics behind it,” Swift told me.

All of this is why Hearst held a competition to see who could build a better analytics model to predict newsstand sales for magazines. It’s a Netflix Prize-like approach to figuring out how well a magazine will sell at a given location, based off historical sales data. There were more than 700 participants in the competition, and last month Hearst and the Direct Marketing Association awarded a team $25,000 for their formula, which generated magazine sales estimates that were nearest to actual newsstand figures. Swift said they’re looking at how they can adapt the model to distributing different titles.

They’re hoping analytics can be a way of becoming more efficient and saving money — starting by wasting less paper. According to figures provided for the competition by the National Center for Database Marketing, less than 40 percent of all copies are sold, and the magazine industry saw close to a six percent drop in newsstand sales between 2009 and 2010. Swift said using analytics benefits readers “if we can be more efficient as an industry and take costs out that are not adding to the customer.”

What’s almost ironic about magazines getting turned on to analytics is that they’re historically known for holding on to information about readers from home subscriptions, direct mail, and surveys. Swift knows this better than most; his job is a relatively new position created at Hearst specifically to look at metrics. Like many organizations, Hearst’s magazine division is in the process of building a unified customer database that ties together information like bill payments, web visits, and promotions received.

Aside from the economic benefits of getting better data, Swift said he thinks magazine publishers realize the cost of storing and managing information has gone down. They’re also taking notice of how analytics are used in making decision for news sites. “The web changes the culture too,” he said. “There’s too much information to absorb — you have to process it, have to let analytics drive it in ways.”

Photo by YoungDoo Moon used under a Creative Commons license.

POSTED     Jan. 10, 2011, 1 p.m.
SHARE THIS STORY
   
Show comments  
Show tags
 
Join the 15,000 who get the freshest future-of-journalism news in our daily email.
Newsonomics: On end games and end times
Can publishers find a sustainable business model this new age of Facebook/Apple/Snapchat/Twitter/Google distributed content? And is local news destined to be left behind?
What Scribd’s growing pains mean for the future of digital content subscription models
It turns out that ebook subscription models don’t work very well when people read too much. So what happens next?
How research (and PowerPoints) became the backbone of National Journal’s membership program
“We no longer look at National Journal simply as a news source, but as a collection of resources, as well as a collection of experts we can turn to on occasion.”
What to read next
2843
tweets
A blow for mobile advertising: The next version of Safari will let users block ads on iPhones and iPads
Think making money on mobile advertising is hard now? Think how much more difficult it will be with a significant share of your audience is blocking all your ads — all with a simple download from the App Store.
1763For news organizations, this was the most important set of Apple announcements in years
A new Flipboard-clone with massive potential reach, R.I.P. Newsstand, and news stories embedded deeper inside iOS — it was a big day for news on iPhones and iPads.
762Newsonomics: 10 numbers that define the news business today
From video to social, from mobile to paywalls — these data points help define where we are in the “future of news” today, like it or not.
These stories are our most popular on Twitter over the past 30 days.
See all our most recent pieces ➚
Fuego is our heat-seeking Twitter bot, tracking the links the future-of-journalism crowd is talking about most on Twitter.
Here are a few of the top links Fuego’s currently watching.   Get the full Fuego ➚
Encyclo is our encyclopedia of the future of news, chronicling the key players in journalism’s evolution.
Here are a few of the entries you’ll find in Encyclo.   Get the full Encyclo ➚
PBS
The Ann Arbor Chronicle
Examiner.com
West Seattle Blog
FiveThirtyEight
Current TV
O Globo
WikiLeaks
The Daily Show
Financial Times
The Economist
Hacks/Hackers