Calculating your best revenue area for new subscribers

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There was a time when we went after circulation with an attitude of "damn the expense – full subscriptions ahead." The understanding was the cost of delivery was offset by ad revenue. Then, advertisers decided that "all circulation was not equal." As more advertisers came to this conclusion, ads or inserts declined as advertisers sought only the areas they believed worked best for them.

As revenue declined, expenses were cut and – in, some cases, publications pulled out of areas not generating ad revenue.  In other cases, subscribers quit because of a lack of advertising or due to things being dropped from the publication that they liked.

In response to these declines, publications cut more expenses, increased subscription rates, and the circle began again with more cut backs from advertisers. To survive, this is a cycle we must stop.  So, how do we go about it?

My suggestion would be to do an analysis of advertising and subscription revenue by delivery areas offered to advertisers. While in-paper advertising would likely be divided by total subscriptions, insert advertising would be divided by subscribers in areas where delivery of the insert is paid for. We already know subscription revenue and if it's different in certain delivery areas, that rate would be used.

Then you calculate revenue per area and divide by subscribers to see the potential value of a new subscriber in the area. To get a true value, you could just use the insert and subscription revenue, and assume that revenue would increase by that amount for each new subscription. The in-paper advertising might also increase, but it would be a smaller factor and depend on things other than a new subscription.

At this point, the most likely conclusion is to concentrate on growth in these areas, but there is no silver bullet for "bagging" subscribers. We are back to basic subscription methods applied to specific areas, but subscription discounts and sales will not accomplish your goals in the long run.

Your editorial staff needs to step up coverage of events and activities, clubs and school coverage in the sections where you want to increase readership.  You will need to provide new reasons for them to buy and read your newspaper – because, if you were already providing all you could, your penetration rate would be the best in the nation.

I'm not sure how much trouble it would be, but working with a local school newspaper and including some of their articles could be an inexpensive answer for more school coverage. Perhaps you can connect with some newsletters covering local clubs or copy certain church email announcements, using parts of their newsletters or emailed items.

As you apply these techniques and find success, you can look to the next best revenue area, and then the next, etc. Before you know it, the new slogan will be "determine the best area of revenue – and get the subscribers in that area."

Just saying ...

Lewis Floyd is a senior associate with WB Grimes & Company, with responsibility for the Southern states.  He may be reached at (850) 532-9466 or lfloydmedia@gmail.com.

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