Three Days Living In The Digital First World Beyond the Bio Many - - PowerPoint PPT Presentation

Three Days

Living In The Digital First World

Beyond the Bio

• Many different hats in 25 years in newspapers
• Sports Writer
• District Sales Manager
• Zone Manager
• Home Delivery Manager
• Assistant Circulation Director
• Director of Audience Engagement
• Inter-State Circulation Managers’ Association
• Director of Circulation and Audience Development

Who We Are

• The Patriot-News (1854 - Dec. 31, 2012)
• Advance Publications, Newhouse newspaper
• Part of one of the largest privately held newspaper groups in the nation
• Pulitzer Prize winner, 2012, Local News Reporting
• Advance Central Services Pennsylvania (Jan. 1, 2013 - Present)
• Report to Advance Central Services
• Provide distribution, customer service, etc. for PA Media Group
• PA Media Group publishes The Patriot-News, PennLive, Central PA

Magazine, suite of digital solutions

What We Do

• Deliver and market The Patriot-News, all associated

Select products

• Fulfill all Classified, Legal, and Obituary listings
• Deliver third-party publications
• New York Times, Wall Street Journal, USA Today,

Investor’s Business Daily, Financial Times, Lancaster Farming

World Turning

• August 28, 2012
• Change to three-day publication cycle announced
• The Patriot-News and Post Standard announced

same day

• January 1, 2013
• Three-day publication cycle began
• Four months and four days to remake our entire world

What Next?

• How many days of delivery?
• Home delivery days discussed prior to the announcement
• Stuck with three days
• How many days of print?
• Discussed whether to do seven-day single copy and e-

Edition, three-days home delivery

• Decided to go all in on the digital-first model
• Embraced the strategy from the outset

What Next?

• What Days to Print?
• Unlike other Advance markets, when announced three-day frequency, home

delivery days were not established

• Approached question from two directions
• Advertisers: what days do they want?
• Many told us
• Some asked us where did the customers want to be
• Readers: what days do they want?
• Had developed reader email list for audience engagement
• Used it to send 11,500 emails after announcement, 44% opened, 30%

responded to survey

What Next?

• Three days after August 28 announcement:
• Launched reader survey at 3 p.m.
• Readers said Tuesday, Thursday
• Press issues
• No deliveries made until ~8 a.m

Our Partners

• Third-party delivery
• At time of announcement, four years into delivery
• Started in 2008 with Wall Street Journal
• Provided quality delivery
• Comparatively, we offered distribution over a broader

geography

• Reduced mailed copy expense for Dow Jones
• Would we continue?

Our Partners

• No doubt about it
• At time of announcement, only provider of third-

party delivery in our market

• Strategically, made perfect sense to retain that

control

• Others had doubts
• Partners questioned our ability to fulfill

Our Partners

• In August, 2012, delivered seven third-party publications
• Wall Street Journal
• New York Times
• Investor’s Business Daily
• Financial Times
• USA Today
• The Carlisle Sentinel
• Lancaster Farming
• Independent contractor routes all seven-day commitments
• Delivery agent agreements, pay varying per piece rates for all deliveries
• Recovery contractors handle complaint redelivery for all publications

Our Partners

• Conversations took place right away with our

delivery partners

• None believed we could continue delivery

agreements

• Widespread skepticism that we couldn’t execute
• Committed to continuing delivery service for all
• No easy task

Color Outside The Lines

• First Scenario: Seven-day Routes
• One contractor - Same geography - All seven days
• Contractor fulfills core pubs on Tuesday, Thursday, and Sunday
• Also fulfills fewer third-party publications on Monday, Wednesday, Friday, and Saturday
• Engaged Denardo Consulting Group
• Worked with them twice previously
• Completed two rounds of delivery route reorganizations
• Removed more than a million dollars from the operation by geographically realigning

routes and reducing per piece rates

• Provide invaluable costing and routing expertise, helped move from a legacy rate

system designed in 1997 to a much more efficient model

• Did not work

Color Outside The Lines

• Scenario One
• Modeling began at too low of a gross expense
• Factor in everything it takes for a contractor to complete his or her deliveries
• Time (assemble, bag, and deliver), Vehicle Expense, Supplies, etc.
• Price point proved to be too aggressive for our market at the time
• Transportation hub
• Compete for warehouse-type work
• Also, did not include TMC in the initial calculations
• Modeling settled at higher expense, +18%
• Every route is different
• Every situation is different
• Rates are negotiable, and we do negotiate

Color Outside The Lines

• Second, Final Scenario: Three-day and Four-day Routes
• Huge volume variations doomed seven-day model
• Not worth one agent doing all seven days in consistent geography
• Two different carrier groups
• Three-day routes: 340
• Handle Patriot-News and all third-party pubs Tues-Thurs-Sun
• Four-day routes: 42
• Third-party publications only Mon-Wed-Fri-Sat
• Almost all four-day agents also deliver three-day routes
• One agent is four-day only

Color Outside The Lines

• Systems Considerations
• Third-party partners already have different delivery frequencies
• Wall Street Journal - different address Saturday v. Mon-Fri
• USA Today - Mon-Fri only etc.
• Lancaster Farming - Saturday only
• In a three- and four-day route model, subscriptions need to be broken down further
• Wall Street Journal: one subscriber has three different subscriptions in our system
• Monday - Wednesday - Friday
• Tuesday - Thursday
• Saturday
• Servicing all start/stop activity is a manual process
• Takes one employee 90 minutes a day

Color Outside The Lines

• Circ system is a classic Collier Jackson system, Atex World Class

7.09c

• Household addresses can only hold up to 10 subscriptions at a time
• This limitation forced us to be creative
• Created phantom households to hold the overflow 3rd-party subs
• Routing changes
• Each publication has its own routing wheel
• Makes all routing changes take exponentially longer
• Introduces possibility of human error

Digital First Reality

• PA Media Group is a digital-first media organization
• What does that mean?
• How is a digital-first model different from a

traditional newspaper?

Digital First Reality

• Content
• All writing, photography, opinions, etc.
• Publishes online immediately, almost exclusively
• Digital
• Aggregates content and manages digital properties
• Engages readers in comments, IRL, etc.
• Pub Hub
• Curates a print experience three days per week
• Uses materials produced by Content
• Almost no involvement in what is covered, when, how, etc.

Digital First Reality

• Online reader
• Gets all Content info for free all the time
• Lean in experience
• Print reader
• Gets best editorial content in print three days a week
• Gets advertising content, some exclusive
• Lean back experience

Digital First Reality

• Which is better?
• Depends on the reader
• One of Top 25 Fastest Growing Newspaper Audiences in

the country, according to AAM and Scarborough Research

• From September, 2012 to September, 2013
• We followed the readers
• September, 2013: more than one half million readers in

print and online

Circulation Lessons Learned

• Establish cover price as soon as possible
• In our transition, price not set until December
• Needed to contract mid-November
• Likely impacted agent retention, customer

perception of the change

Circulation Lessons Learned

• Routing: Do it yourself
• RouteSmart proved an invaluable partner
• Much of their work, though, needed to be repeated locally
• Geographic boundaries
• Only routed active addresses
• RouteSmart now used by most contractors to fulfill delivery
• Great tool to have

Circulation Lessons Learned

• Routing: build the muscle
• Volumes will shift after the transition
• Develop internal proficiencies in modifying

delivery routes, setting rates

• Route all the streets, all the addresses
• Will need to be part of our operation going

forward

Circulation Lessons Learned

• Service: a journey, not a destination
• Early 2013, delivery less than ideal
• Open routes, Staff turnover, etc.
• By second month, situation improved significantly
• Daily - 4.1 CPT; Sunday - 4.6 CPT
• Service has improved ever since
• Just completed two straight month having met internal service metrics
• Under 2.0 Daily CPT
• Under 3.5 Sunday CPT
• Third-party service continue to improve as well
• Communicate up front to expect some turbulence

Circulation Lessons Learned

• Staffing
• You need more people than you think you will
• Do not change staffing levels until after the

transition concludes

• Push back

Circulation Lessons Learned

• Set targets, and be flexible
• Shelved our internal service review program for contractors for

four months

• Still paid service incentive
• Provided stay incentives for contractors
• Used pop-up service rewards to drive for better results
• When missed service levels in early days with third-party

partners, provided delivery gratis

• Right thing to do

Circulation Lessons Learned

• Over-communicate
• To your staff
• To contractors
• To delivery partners
• To readers
• The more you talk, the more information you share, the clearer the

message becomes

• At the end of the day, this is all about relationships
• Build them before you need them

Thank You!

Dan Christ

• dchrist@acspa.com
• @DanChristSays / linkedin.com/danchrist