Insert page counts affect advertiser ROI
Among the loudest and most frequent objections heard from advertisers and their agencies are: 1) the ROI on their advertising circulars is declining, 2) the decline is entirely due to the insertion cost of their circular, and 3) the only remedy is to lower their insert CPM. Obviously, if they are in fact measuring the true ROI of their circular – (and the CMO Survey suggests that they are not¹) – and it is in fact declining, then there are many factors that are influencing that outcome. Among the more obvious are changes in the competitive retail landscape, changes in shopper habits, and changes in the consumption and influence of media. But there is another subtle, objective factor that has a clear and measurable factor on the ROI of an insert program, and that is change in average program page count.
First, it’s important to recognize that newspaper insert pricing, unlike mail, is fairly flat across product sizes. This creates an extremely large difference in the effective page CPM for different size programs (figure 1), based on national average newspaper pricing by product size. Add to this a similar printing premium from smaller page counts, and it’s evident that smaller inserts potentially have a much steeper ROI hurdle. Clearly, additional insert pages generate more sales, but the effect is not linear and likely doesn’t offset the effective pricing premium.
So, if an advertiser’s average page counts are trending down, it stands to reason that fact alone could have an outsized influence on program ROI. With that in mind, we looked at the page count trends of 20 key national advertisers to determine the year-over-year percentage change in their programs for the four quarters ending Q3 2018. The results (figure 2) reveal that 13 of the 20 showed a decline – ranging as high as 33%.
Fewer promotional pages, coupled with declining distribution footprints, has to have a negative impact on the sales tied to insert programs – and on ROI.
Publishers have a responsibility to keep an eye on their value proposition, and to validate it through an honest dialogue with their advertising partners. But the unilateral default to pricing as the root cause and only remedy to the ROI question is demonstrably inaccurate, and we should push back vigorously with data.
¹CMO Survey, Duke University School of Business, 2018.
New features included in app update
As part of our commitment to delivering best-in-class products we have updated Market AI Planner and Quick Plan.
Key updates include:
- Location label showing the address of your advertiser is now on the map. Simply choose “YES” under the label option.
- New distribution reports, such as Site Allocation in Columns plus Full Distance, Reference and Distribution.
- Download-friendly reference reports formatted for Excel
- SPEED – Planner runs faster!
We listen to our clients. In response to the frequently requested improvements, we have updated Market AI Planner and Quick Plan, allowing you access to the newest versions of our apps.
Looking for location labels on your map? You can now add location labels to your maps in Precision Planner and Quick Plan. Just choose “Yes” under the Label option, found on the Plan page in Precision Plan and on the Quick Plan page in Quick Plan.
A label showing the address of your advertiser will now be shown on the map.
Looking for site allocation in an easy to read format? Within Precision Planner, go to Distribution Reports. Using View dropdown, select Site Allocation (Columns). Full detail is now available in columns.
Within the same tab, using View dropdown, select Full Distance, Reference and Distribution.
Full detail is now available in columns: Zip; Distance from Store; Primary Reference and Value; Secondary Reference and Value
Looking for Reference Reports in an Excel format?
Within Precision Planner, select Reference Reports. Previously, the selection provided bar graph information only. Now you will see and can download an Excel format using View dropdown, Zone Reference; Zip Reference and Zip SubZip Reference (For Download).
This easy to read version can also be downloaded via Download – Crosstab. Don’t forget to click on the information before you select Download – By doing this, you will have the Crosstab option for output.
SPEED! In this world of online technology, faster is better. We think so too!
Uncovering The Top 5 Insights In Your Market Insight Report
Each quarter you receive a Market Insight Report (MIR) in your online portal, which provides analytic dashboards that give you a top line view of your advertising data. The goal of these reports is to help uncover opportunities for performance improvement and growth. As our consulting group works with clients to provide analysis that improves results, we’ve developed a viewpoint on the best places to look for actionable insights. Here are our Top 5.
Mspark expansion raises competitive pressure for newspapers
This week, Mspark announced the acquisition of Preferred Mail Advertising, a West Virginia-based shared mail business. In less than 10 months, Mspark has now acquired four regional mailers, increasing their national footprint of owned distribution by nearly 10%.
|Company||Date Acquired||Coverage Area||Households|
|Market Select||November 2016||Reading PA area||500,000|
|Stone Creek Media||December 2016||Waco, Temple, Bryan TX||244,000|
|Valu-Direct||May 2017||Albany NY/Burlington VT||460,000|
|Preferred Mail Advertising||August 2017||WV, OH, KY||565,000|
They’ve conveyed this expansion as part of their strategic growth plan, so it’s likely they’ll continue to identify opportunities to build out their national footprint of rural distribution.
What does this this rapid expansion mean for newspapers?
While each of these companies had previously affiliation with Mspark as part of their extended network, becoming owned distribution activates several important advantages:
- Full integration of Mspark’s marketing and analytical capabilities
- Operational efficiencies that will improve the client experience
- Post-program analysis to reinforce advertiser ROI
- More leverage – relationship and pricing – with regional and national advertisers
- The ability to standardize zoning, expand footprint, and increase frequency.
The final point was illustrated just a few months ago, when the Reading, PA, market was increased to weekly distribution, opening competition for a much wider group of key advertisers.
How should newspapers respond to the competitive threat?
Applying data-driven analysis to understanding your value proposition, your pricing competitiveness, and specific client opportunities and vulnerabilities will help you proactively defend your existing business, and develop aggressive strategies to win new business. Our business intelligence tools deliver the actionable insights that empower successful competitive strategy, and the distribution planning and analytical tools that translate those insights into winning campaigns.
Maintaining your product as a robust shopping marketplace is a key element of your value to readers. Let us help you develop strategies that protect and grow your insert business.
To help newspapers increase volume and revenue from their current advertisers, we’ve created a new tool called Precision Optimize. An add-on to our MarketAI software, Optimize allows a newspaper to easily upsell an advertiser by showing highly targeted zones and publications in which they are not currently distributing.
All you need to get started is a current insertion order or buying profile for an advertiser. With just a few clicks, our software will exclude those zones from the total available distribution (all publications from a newspaper including paid, TMC, Sunday Select, digital, etc.) and will recommend additional zones to purchase based on relevant demographic data.
Click through the slideshow below to see how easy it is to Optimize a campaign for an advertiser. Call 636-534-4496 or email email@example.com to learn more.