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Oct. 13, 2011, 10:30 a.m.

The newsonomics of 100% reach

In Connecticut, The Day is pushing a membership model for readers that’s built around harnessing customer data.

Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.

You won’t find a “Subscribe” top-level link on The Day’s home page. Rather a top right link offers “Join” and takes you to a membership page offering four prices from $9.99 a month (digital access only) to $22.99 (7-day home delivery plus two digital memberships), with authentication done by Clickshare. There’s also the increasingly common in-between alternative of a Sunday print paper plus digital the rest of the week.

The Day’s new membership-centered program aims to extend the paper’s touch and reach. It can already report modest gains in that reach, but I think the real story here is in its potential and its worldview. Let’s call this the newsonomics of 100% reach.

The 100% is my notion — the idea that newspaper companies, with wide-ranging news, information, and commercial utilities — could have, literally, something for everyone. If in the course of a year, you buy something or want to know something, a smart local company should have something for you that makes that process easier, better, or cheaper. (And those three attributes sum up much of our daily aims.)

If we hang a 100% vision out there, though, The Day’s strategy comes more sharply into focus.

“The metered model is simply a tactic,” says Gary Farrugia, publisher of The Day. “The database is the strategy.” That database was built by Daniel Williams, whom Farrugia hired a year ago from the New York Times Regional News Group, and it’s indeed the next step in the evolution of print-based, throw-it-on-the-driveway local newspaper company.

The Day is uncommon by history. It is owned by a local trust, which plows profits back into the community. It is an above-average paper, having just won the New England Press Association’s best paper (20,000-35,000 circulation) for the second year in a row (and the third time in the past five years). The Day is typical, though, of most newspapers in having seen a single-digit decline in circulation year after year, as its customers have gone increasingly digital.

Pre-membership program, The Day could claim a reach into about 20,000 households of 108,000 in its total market area, says Farrugia, who came to The Day 10 years ago after 15 years in various management jobs at the Philadelphia Inquirer.

It is now targeting 40,000 of those non-subscribing households. It uses Nielsen’s Prizm product for segmentation, as do many other publishers. In targeting, though, it is now drawing on an increasingly richer database of information about those targets.

“All data sources are brought together,” says Williams. “Address, subscription, web registration, contests, alternative pub fulfillment, rewards site usage, etc. — they are all now tied to the individual user.” The goal: “That we are aware of every contact.”

On top of that new foundation, though, The Day is going to town with contest and deals. Forget just deal of the day. The Day offers a raft of deals, offers, and contests, six live on the site now. All totaled, the company has done more than 50 contests and turned them into a growing revenue source, gaining $150,000 in content sponsorship money over the last year. (Its biggest, “Summer Family Fun”, earned $40,000 in sponsorship and gave out $200,000 in prizes.)

The contests and the offers, and all other touches, build the database. That second digital membership now offered with full access? It has helped build The Day’s individual database to 30,000, from 20,000 (households) already, says Farrugia. So, even without buying a membership, community members move into the database. Who is most likely to play the contests and take up the offers? Twenty-five to 44-year-old females, a key merchant-targeted group.

Build that database and it becomes doubly valuable.

The Day can further engage with its customers, in everything from contests to offers to commenting to civic connection. Second, it becomes gold in better serving local advertisers.

“We still connect buyers and sellers,” says Farrugia, “but now on an individual basis”. While the Best Buys and Targets already have such targeted abilities themselves, most Day advertisers don’t, and therein lies an opportunity to more deeply serve them before others come into the market and insert themselves between The Day and merchants.

Anyone can get into the local database marketing game. Newspapers, though, have an impressive customer head start — the business they build supports journalists, 62 in the case of The Day.

Further, The Day, part of the Newspaper Consortium working with Yahoo on ad targeting, can offer reach beyond The Day, using the combined power of its own and Yahoo’s technologies. The accompanying graphic shows how The Day sums up its customer knowledge and targeting in pitching advertisers.

In an era of shrinkage and less seeming like less, The Day’s vision and tying together of technologies and subscription and advertising strategies is impressive. I don’t know that it would get to my aspirational something-for-everyone 100% reach, but it is already moving well beyond the norms of the trade. Many papers reach a small percentage of their markets (“The newsonomics of eight-percent reach“), having relied on high pricing for too long.

We can see the thinking extending from a small Connecticut daily to the global-reaching Financial Times, which, too, focuses on reader and ad analytics to drive its business (“The newsonomics of the FT as an Internet retailer“).

This new model has legs. Now let’s see The Day, and others, fill out the body.

POSTED     Oct. 13, 2011, 10:30 a.m.
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