Calculating your best revenue area for new subscribers

By Lewis Floyd, Sr. Associate, W.B. Grimes & Company,

There as a time we went after circulation at “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 they were specified for areas the advertiser believed worked best for them.

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

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

My suggestion would be to do an analysis of advertising and subscription revenue by delivery areas offered advertisers. While in paper advertising would likely be divided by total subscriptions, insert advertising would be divided by subscribers in areas paid for delivery of the insert.   We already would know subscription revenue, and if different in 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 truer value you could just use the insert and subscription revenue, then it would be a safe assumption 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 goal in the long run. Your editorial staff needs to step up coverage of events and activities, clubs, and school coverage in the sections you desire to increase readership – you will need to provide new reasons for them to buy and read your newspaper (if you were already providing all you could your penetration rate would be the best in the nation).

Not sure how much trouble it could 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 Church email announcements, using parts of their newsletters or emails.

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

Just saying …

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