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
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