November 28, 2005
The Cultivation of Newspaper Readership Using Segmentation Software
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Susan Smith - Managing Editor


by Susan Smith - Managing Editor
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Welcome to GISWeekly! Case studies are a valuable way to showcase what a particular solution or combination of solutions can accomplish. Previously, GISWeekly has
covered details on how to use GIS data to reveal rich story matter. Yet the changing role of newspapers in our society can benefit in many more ways from the application of GIS. Finding out who your customers are proves to be a very critical issue for newspapers today, and something that GIS can help with.


A case in point is The Eagle-Tribune newspaper, published by The Eagle-Tribune Publishing Company. Read about this paper's success in this week's Industry News.


GISCafe and GISWeekly wish all our readers a happy Thanksgiving. Next week I will be at Autodesk University in Orlando, Florida and look forward to seeing many of you there.


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Susan Smith, Managing Editor




Industry News


The Cultivation of Newspaper Readership Using Segmentation Software

By Susan Smith


Case studies are a valuable way to showcase what a particular solution or combination of solutions can accomplish. Previously, GISWeekly has
covered details on how to use GIS data to reveal rich story matter. Yet the changing role of newspapers in our society can benefit in many more ways from the application of GIS. Finding out who your customers are proves to be a very critical issue for newspapers today, and something that GIS can help with.


CLICK TO ENLARGE
A case in point is The Eagle-Tribune newspaper, published by The Eagle-Tribune Publishing Company. How the world has changed in terms of newspaper readership was outlined in an interview with Dan Griffin, vice president of marketing at The Eagle-Tribune Publishing Company (ETPC), and research director Forbes Durey.


“Newspapers are no longer a mass medium,” explained Griffin. “At one point in time, in any community, one could trust that everyone who lived in the community would subscribe to the newspaper. Our home office is actually in my home town, the town I grew up in, North Andover, Mass. When I was growing up here, there were about 6,500 households and 6,300 of them subscribed to The Eagle-Tribune. Since then, the community has grown with a lot of different kinds of housing--a great deal of single-family homes, multi-family apartment housing, condominium housing, etc., and the circulation of the newspaper has not kept pace with that growth. So we can no longer trust that everyone in a community will subscribe to a paper. We have to target which people in each community are most likely to subscribe or basically craft offers that make people likely to subscribe where they live. For example, now we know that the markers for the newspaper readership are generally income, education, professional status, homeownership and marital status. Basically we use MapInfo segmentation software (MapInfo PSYTE segmentation system) to target clusters of households in neighborhoods where likely subscribers live. Working with national figures on a site called readership.org and looking at our own subscriber base, we can tell you which people are more likely to read newspapers
than others.”


How does MapInfo PSYTE software help find people?


“MapInfo with its segmentation software has segmented America in 72 neighborhoods,” explained Griffin. “70-90% of households fall within 19 of those 72 groups in our market. Basically within those 19 groups, there are some clusters or neighborhoods where there's a high propensity for newspaper subscription because of the markers on the scales that we talked about before - income, professional status, etc. By combining a blend of those markers, we are able to determine where best to invest our circulation/marketing dollars to obtain readers.”


According to Durey, the PSYTE segmentation system applies its segments to block group levels, so using neighborhood level geography which has been defined by the U.S. government, you can geocode your subscriber based audience and find out which block groups subscribers live in. Then you are tasked to learn which clusters are most desirable. You can see on a segment by segment basis whether you are underserving or overserving that particular segment. “The goal of a segmentation analysis is to make sure that you're overserving the segments that you find to be the most desirable for newspaper readership and underserving segments that are least likely to read newspapers. And that provides
the best opportunity to allocate resources to grow long term circulation and subscribers,” concluded Durey.


“Last year,” said Griffin, “we mapped our single copy purchase points throughout the market. The single copy purchase points is a long name for a newspaper box. The location of single copy purchase points is generally historic, they were in places where people were likely to pass by 10-40 years ago, but they are not necessarily located in the best places to be in front of likely newspaper readers today. We mapped the single copy purchase points to determine where they are and how likely prospective newspaper readers were to be near them or see them and we found that we could a) increase the density of our single copy purchase points and b) relocate them to be more in field
of travel of likely newspaper readers. When we did that, we saw in the Essex County Capital newspapers, basically the North Shore of Boston, for example, a 25% increase in single copy sales, during the course of less than a year.”


What was the company's initial investment in the software?

“On an annual basis it's about $20,000-$30,000,” commented Durey. “The MapInfo software is priced in various stages. MapInfo's sales team was very flexible in designing a pricing strategy to meet our current needs. Our initial investment was $800-$900. We tested that for about a year, and then we decided to dive in and use all the data and capabilities that MapInfo offers. At this point, we purchased the full set of capabilities from MapInfo's TargetPro software. Newspapers can expect a varying degree of investment from $1,000 up to $30,000 or more.”


CLICK TO ENLARGE
“We've had MapInfo for about 2 1/2 years and I'd had experience with MapInfo and their software before I came to The Eagle Tribune Publishing Company three years ago when Dan hired me,” said Durey. “I recommended we purchase MapInfo Professional to use for basic geocoding and spatial analysis projects such as geocoding, single copy points or subscriber roots or particular advertising groupings. About nine months after our initial purchase, we decided to take a more strategic review of our products and markets through a segmentation analysis. So in the second year, we purchased the full suite of the MapInfo TargetPro software, including StreetPro, PSYTE segmentation
software, their Routing J server and a large chunk of demographic, purchasing and psychographic information from them.”


What is the return on investment - is this something that can be calculated? “This is a strategic investment,” said Griffin. “Our market is not unlimited. Generally once you get out of the greater Boston area, interest in our product is going to decline precipitously. We have to make the most of the people we have right here. MapInfo helps us do that by understanding a) who they are, b) how to reach them and c) how to retain them as long term subscribers.”


“We measure that investment in many ways, such as the single copy sales initiative where we grew single copy sales by 25% in less than a year,” said Griffin.


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