Category: Research

February 8, 2002

Overview
 
The world’s first countrywide survey shows that local newspapers with websites have healthier print circulations than papers without sites.
 
While conventional wisdom suggests that newspaper web sites cannibalize print circulation, the analysis of circulation at 236 French newspapers shows no such effect. In fact, the typical French newspaper with a web site outperformed its siteless peers between 1999 and 2001, a period in which French Internet usage soared.
 
The French figures validate previous US newspaper readership surveys that have suggested that newspaper web sites generate significant marketing benefits. The market-wide analysis means that publishers with weak circulation can cross the Internet off their list of suspected culprits.
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Table of Contents 
 
Overview
Summary numbers
Analysis: how does a web site help print circulation?
Daily newspaper circulation performance 1999-2001
Weekly newspaper circulation performance 1999-2001
Context: French Internet usage
Conventional wisdom
Online features and circulation
Methodology
Conclusion
About Pressflex
 
Summary numbers
 
The 236 newspapers, all members of the French circulation audit association Diffusion Contrôle (www.ojd.com) recently released their circulation results for the first half of 2001.
 
Between 1999 and 2001, the average French regional daily newspaper without a web site lost 0.88% of its circulation. Newspapers with web sites did better than that, losing just 0.27% of their circulation over the same period.
 
The average weekly newspapers in France with a web site increased its circulation by 1.2% in the 1999-2001 period, versus an increase of 0.96% for the average weekly without a web site.
 
 
Table 1: Average newspaper circulation changes (=median) 
 

 
 
Analysis: how does a web site help print circulation?
 
1. Web sites provide substantial marketing benefits that overwhelm any print defections.
 
A newspaper’s web site, filled with content, can become a magnet for new visitors, effectively doubling the paper’s reach. A fully indexed web site of a small newspaper with a circulation of 10,000 copies can bring the paper an additional 10,000 web visitors a month. Traffic sources include:
 

 
 
• Search engines: A weekly with only 10,000 in print circulation can win 3,500 referrals from search engines each month.

 
 

• Links from other sites: Links to articles on a news site can provide free marketing, with small weeklies gaining up to 1,000 such visitors a month.

 
 

• Web address publicity: A newspaper’s web address (www.papername.com) is easily promoted on billboards, bumper stickers, posters, and provides an easy point of access for newcomers to the community.

 
 

• Scoops: Beating competitors with online summaries of breaking news items can boost the brand name of a weekly paper and increase its exposure.

 
 

 
As a magnet for new prospective readers, the site can become a new point of sale for the newspaper’s current subscriptions, special publications and prior issues. The significance of this revenue stream is expected to increase as micropayment technology becomes mainstream, Internet users become more comfortable making online payments, and the euro makes cross-border shopping more popular in Europe.
 
However, much still remains to be done to extract the full marketing potential of web sites, even in the U.S. An August 2001 study by the Finberg-Gentry, Digital Fruit Consultancy found that more than half of 100 American newspaper web sites surveyed bury the subscription link on their sites if they have it at all.¹
 
2. The web taps potential readers untouched by traditional print sales channels.
 

 
 
• Demographics: The typical web reader in Europe is still young, urban and tech savvy – and as such is currently less likely to read the printed edition of the newspaper. This “alternative” audience is not attached to the newspaper, but finds articles via search engines when looking for news on a particular topic.

 
 

• Geography: A substantial flow of readers comes from outside the printed paper’s traditional circulation area – from another part of the country or from abroad.²

 
 

 
 
3. News consumption is habit-forming.
 
A newspaper site’s contribution to its community’s “news culture” increases the likelihood that people will buy a paper. A web site with forums, questionnaires, polls or even just an e-mail address can connect with the reader in new ways. Interactivity brings feedback, story ideas, letters to the editor, and local “buzz,” but also a higher level of engagement and loyalty from print readers. A U.S. survey³ last year of 15,657 visitors to eight newspaper-affiliated Web sites found that:
 

 
 
• Among site visitors who read the print edition, 7 percent began their subscriptions after first visiting the site. That’s a net gain of 3 percentage points when compared to the 4 percent of combined print-online readers who ended their print subscriptions.

 
 

• Single copy purchases faired even better, showing a net gain of 8 percentage points. Readership, rather than circulation, was the biggest winner, with a net of one in five in the combined print-online audience reporting that they were reading the print edition more since becoming visitors to the Web site.

 
 

 
 
4. Readers prefer paper to pixels
 
For most readers, the online experience is sufficiently different from print reading that web browsing is not a “replacement” for reading newsprint but rather a supplement. According to a 2000 study by the Newspaper Association of America, print newspapers are preferred over online for their ease of use.⁴
 
Daily newspaper circulation performance 1999-2001
 
Conventional wisdom notwithstanding, France’s 27 regional daily newspapers with web sites did better in the past two years than their 30 peers without web sites.
 
Regional daily newspapers without sites on average⁵ lost 1.5% of their circulation over the past two years. Newspapers with web sites did better than that, losing just 0.77% of their circulation between 1999 and 2001.
 
Considering how the “average newspaper” fared, by calculating the statistical median of the data, yields similar results. (Medians eliminate the effect of extreme cases and thus better reflect what happened to a typical group member.) Last year, for instance, the circulation of the average daily paper with a site grew 0.25% versus 0.14% for the average daily paper without a site.
 
 
Table 2: Daily newspaper circulation changes 
 

 
 
Weekly newspaper circulation performance 1999-2001
 
Of France’s 179 audited weekly papers, just 19 have web sites. Weekly newspapers with sites increased their circulation less than their peers without web sites over the past two years – an average increase of 0.81% versus 1.34% since 1999, but increased their circulation more than their siteless peers between 2000 and 2001: 1.12% versus 1.01%. The average newspaper with a site, in terms of the median, outperformed its counterpart without a web site in both periods: growing 1.20% in circulation versus 0.96% for papers with no sites over the last two years.
 
 
Table 3: Weekly newspaper circulation changes 
 

 
 
Context: French Internet usage
 
Although French Internet usage significantly lagged countries like the UK and Germany in the 1990s because of high telephone rates and low PC usage, French Internet usage accelerated in 2000 and has continued to rise. According to market research firm Netvalue, the number of people in France with home Internet access rose from 5.8 million in July 2000 (10% of population) to 10 million (16%) by September 2001. (Comparable Netvalue statistics for the UK are 16% and 26%.)⁶
 
Conventional wisdom
 
Many publishers instinctively see a web site as a competitor to the print edition. Why would readers pay for news if they can get if for free?
 
Internet research firms have stoked these fears: a 1997 study by Forrester Research projected that by 2001 newspapers would lose up to 14% of their circulation to the web.⁷
 
And when PCM Utigevers, the largest Dutch newspaper group, drastically cut its online operations in September 2001, it blamed the sites of its five national broadsheets for cannibalizing print subscriptions.⁸
 
Online features and circulation
 
Do particular web site features help or hurt print circulation?
 
The number of articles included on the site, searchable archives, polls, forums or e-mail newsletters on the web site does not show any correlation to changes in print circulation. The only feature with a possible impact on circulation growth is a print subscription form online.
 
Eight of the 19 regional dailies with web sites included a print subscription form on their sites. These papers did slightly better than papers with no sites or papers with web sites but no subscription form. The eight dailies saw their circulation over the last two years drop by just 0.09% on average, versus an industry average of a 0.96% decline. Weeklies with a subscription feature on their site increased circulation by 1.36% over the same period – more than papers without sites or papers with sites but no online subscription form.
 
Unfortunately for newspaper publishers, the data also indicate that for newspapers the web is not yet as important a marketing tool as for magazines – where web sites strongly contribute to print sales.⁹
 
Methodology
 
The 57 French daily and 179 weekly newspapers, all members of the French circulation audit association Diffusion Contrôle, recently published their circulation results for the first half of 2001.¹⁰
 
After calculating the circulation changes for each newspaper between 1999 and 2000 and between 2000 and 2001, Pressflex compared the performance of papers with sites to those without sites. To evaluate the effect of various online features on circulation, Pressflex also correlated the performance of sites relative to the amount of content online and features such as a poll, a forum, an e-mail newsletter and a print subscription form.
 
For the purposes of this analysis, the Sunday editions and/or various zoned editions of a daily newspaper were not counted. Also, when Diffusion Contrôle tracked the total circulation of a group as well as the circulation of the group’s individual titles, only the circulation of the members was taken into consideration. Newspapers whose web site consisted of only a single page with contact information were counted as papers without sites.
 
Conclusion
 
Online publishing poses no threat to a newspaper’s print circulation and may offer significant advantages. As common sense suggests, the inclusion of a print subscription feature online further boosts circulation performance… although too few paper’s take advantage of this obvious idea.
 
About Pressflex
 
Pressflex provides turnkey sites, consulting and seminars to Europe’s largest publishing groups. Based in Budapest, Hungary, Pressflex serves clients in the UK, France, Switzerland, Hungary and the United States.
 
 

 
¹http://www.naa.org/TheDigitalEdge/DigArtPage.cfm?AID=1915
²While this latter trend is the most significant for English language papers, French newspapers using Pressflex’s web publishing service receive to 25% to 40% of their traffic from outside the country.
³Report by Borrell & Associates based on data from research firm Belden Associates and underwritten in part by the Newspaper Association of America. http://www.naa.org/TheDigitalEdge/DigArtPage.cfm?AID=2599
⁴http://www.digitaledge.org/monthly/2000_01/synergize.html
⁵To exclude anomalous data, the top and bottom 5% of newspapers have been left out in calculating the statistical mean (average) of newspaper circulation changes. Since the statistical median already excludes extreme cases by returning the middle value from among a set of numbers, the complete data set was used for median calculations.
⁶http://www.netvalue.com/fr/news/index_frame.htm?fichier=sommaire.htm
⁷http://www.nytimes.com/library/cyber/week/010697newspapers.html
⁸http://www.siliconvalley.com/docs/news/tech/060825.htm
⁹http://www.pressflex.com/news/fullstory.php/aid/18.html
¹⁰http://www.ojd.com/gb/basegb/body_resSousCat.asp?cat=1&catChoisi=QUOTIDIENS
 

 
 
For further information about this report as well as other research activities of Pressflex, please contact salesATpressflex.com or Miklos Gaspar at +36 1 328 0602.
 
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Cette enquête en français

September 15, 2001

Summary

Magazines are winning online but often do not know it, Pressflex’s survey of lifestyle magazine marketing professionals shows.

Nearly four out of five marketing executives at lifestyle magazines with web sites are missing out on their sites’ chief benefits – extensive contact with potential subscribers and advertisers and substantial print subscriptions generation, the survey found.

Two out of three lifestyle magazine web sites generate substantial print subscriptions, according to marketing managers for 95 publications in the UK, France and Hungary.

While some publishers have spent 100s of thousands of Euros on showcase sites, online subscription sales has no correlation with development or marketing expenditure, but does relate to the amount of content on the sites and the use of editorial features such as links, forums and e-mail newsletters.
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Summary
Databites
Winning subscriptions with the web
Three types of executive
Country comparisons
Cannibalization… or seduction?
What brings sales: big budgets or small steps?
Marketing managers need to get involved
Conclusion
Methodology

Databites

• 96% of lifestyle magazines with web sites receive print subscriptions via their web sites.
• Magazines sell up to 30% of total new subscriptions online, or up to 25 new subscriptions per week.
• An average 6% of marketing budgets are spent online (median = 4%), ranging from nothing to 80%.
• Only 46% of web sites have any involvement from magazine marketing managers.
• There is a high correlation between a marketing manager’s engagement in the website and the level of print subscription sales generated.
• Just 17% percent of marketing managers are aware of the “free” market research available from the site – most popular articles, search engine terms used, search engine visits or size of traffic.

Winning subscriptions with the web

More than two thirds of marketing managers at 95 lifestyle magazines in the UK, France and Hungary said they sell a number of subscriptions and back issues through the web, but the majority of the respondents also reported that they have little or no role in shaping their web sites.

Chart 1: Do you receive print subscriptions via the web?

The survey, conducted by phone in August among 49 lifestyle magazine marketing managers, representing 95 magazines, also found that marketing managers receive little feedback from their web teams on what online readers actually care about on their site.

Three types of executive

The marketing managers at the magazines surveyed can be classified into three broad categories: “wired”, “waking up” and “indifferent”.

Wired (11%). These marketers pay close attention to the web site, are aware of traffic data and/or search terms used to access the site. They have also typically played a significant role in the creation of the web site. Not surprisingly, these magazines win the highest number of print subscriptions online.

Waking up (19%). These are marketing managers who are just coming to realize the importance of the web as a marketing tool. They are typically aware of some traffic data and use information from the web site as part of their market research. They are also trying to carve out some responsibility for themselves in overseeing the site.

Indifferent (70%). This group knows little about the web – or the advantages it offers. They have no information about the traffic of their magazine’s web sites, and have had very little – if any – role in the creation of the site.

Chart 2: What has been your role in the creation/management of the web site?

Reflecting the lack of responsibility for the site of the typical marketing manager, at 81% of the magazines the marketing information collected as a by-product of the web sites goes completely unused. “I’m loath to receive data that I cannot use,” said the marketing manager at a major UK men’s lifestyle magazine. The marketing manager, who also said that his magazine has received subscriptions via the web, has not been involved with the creation and management of the web site.

Chart 3: Use of the web site to gather marketing information

Marketing tactics at the magazines surveyed include a mix of newsstand advertising, television, radio and billboard ads and cross promotion. But the abundance of contacts brought by the web is still overlooked, even at magazines that buy lists for direct mail purposes. In fact, not a single magazine marketing manager interviewed has mentioned the magazine’s web site among the magazine’s top market research tools, though 26% said that the information gathered from the site does pay some role in the market research efforts of the magazine.

Country comparisons

In the UK, which has the highest Internet penetration among markets surveyed, magazine marketers are more out of the development process than their peers in the less mature market of France and low-penetration Hungary. Just 13% of British marketing managers said they were heavily involved with the web site, with another 19% claiming a “bit” of involvement.

Though those who reported involvement have also said that they use the web site as part of their market research, three quarters did not know what the most popular sections of their magazine were online. None knew what search terms people used to get to their sites.

In France, three quarters of marketing managers were involved in the creation and/or management of their web sites, but even of these managers, two thirds did not know what search words readers used to access their sites. Only half of them knew what the most popular section was on their magazine site.

In Hungary, where 59% of managers in charge of marketing said they have been involved in the creation and management of the web sites, they were even less engaged with the sites: 86% said they had no idea what people are coming to look for, with the majority of respondents not even knowing whether their sites have been registered with and indexed by search engines. Almost two thirds (64%) of respondents did not know what were the most popular sections of their web sites.

Cannibalization… or seduction?

Contrary to the worry that online content cannibalizes print sales the survey indicated that more content online increases print subscriptions.

“At first we were surprised by the number of subscriptions we get online, but now we are used to getting half a dozen each week,” said the marketing manager of a small Hungarian magazine, which has decided to put most of its content online. “This is our only marketing expense.”

The survey found a direct correlation between the amount of information online and the number of print subscriptions generated through the web site.

Five types of strategies of content management emerged through the research:

1. One quarter of the magazines surveyed have no real, updated content on the site, only a description of the magazine, some contact information and a subscription form.
2. One third of respondents reported that their sites include headlines from the current issue of the magazine, as well as article teasers in some cases.
3. A few magazines include only web exclusive content on the site.
4. A few magazines combine headlines and article teasers from the print edition with web exclusive content.
5. A few magazines put their entire print content online.

The research found that only sites with some form of real content (categories iii-v) excel in selling print subscriptions via the web.

However, whether that content comes directly from the print edition of the magazine or is online-only content was irrelevant in terms of the number of print subscriptions received. Since putting print content online carries little to no extra costs and has just as positive of a marketing effect as online-only content, it is the most economical way to using the site as a marketing tool.

Chart 4: Content vs. Print Subscriptions sold

Table 1: Content vs. Print Subscriptions sold

What brings sales: big budgets or small steps?

Winning subscriptions online does not correlate with substantial spending. However, a number of small, inexpensive strategies can have a significant impact on winning new readers.

Many of the magazines surveyed have special web teams who have created and are running the site. While in the UK every magazine contacted developed its web site in house, 53% of magazines in France and 64% in Hungary have outsourced development to third parties. None of the magazines surveyed used off-the-shelf products for the creation of their web sites, and only 4% have used an application service provider to create, host and maintain their web sites.

The means and the costs of site development have been irrelevant in the success of the site in generating subscriptions. None of the four French magazines who reported both professionally developed web sites and the use of web exclusive content noted significant subscriptions via the web. Indeed, two of them said they only get sporadic subscriptions.

The magazines where print subscriptions via the site had an important share of overall new subscriptions all have, beyond real content, a significant collection of links to other sites, and – in many cases – e-mail newsletters and reader forums. The correlation was especially significant in France and Hungary, where the less developed Internet market and less content competition in the native language mean that e-mail newsletters sent out by magazine publishers have fewer other marketing e-mails with which to compete.

Marketing managers need to get involved

Even at the largest magazines in the countries surveyed, full-time web teams consist of chiefly technical and editorial staff with no dedicated marketing involvement.

When the marketing manager of the print product does get involved with the web site, the expertise the marketing manager lent to the online operation paid off in new print subscriptions.

Chart 5: Marketing manager’s role vs. Subscriptions

Table 2: Marketing manager’s role vs. Subscriptions

Many marketers with big plans and deep pockets admit that they mostly guess when it comes to promoting themselves using the Internet or backing up their e-marketing plans with data.

A large UK interior decorations magazine with a bespoke web site, for instance, plans to spend 80% of its marketing budget online, and is hoping to generate 15% of its new subscribers via the web as a result. The site has little print content and few links, and the marketing manager does not know what search terms people use to find the publication.

On the other hand, a small Hungarian lifestyle magazine with full print content and monthly e-mail updates generates 30% of its new subscribers via the web – with no funding allocated to marketing online. A French outdoor sports magazine also spends no money on e-marketing, but has a 100-strong link collection, full print content and four separate e-mail newsletters to people can subscribe – generating 10 new print subscriptions per week.

Conclusion

Although many magazine marketing professionals pay no attention to the opportunities offered by the Internet, content-rich web sites can provide substantial a marketing boost. Marketing executives who ignore the Internet leave money on the table, passing up free research and cheap subscriptions.

Methodology

For inclusion in the survey, lifestyle magazines were picked from media directories for the UK, France and Hungary. Interviews with marketing managers at magazines with web sites were conducted by telephone by Pressflex staff in the native language of the marketing managers. Of the 67 marketing managers contacted, 49, representing 95 magazines, participated in the survey.
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