Remember the time when a client wishing to distribute leaflets with a free newspaper had to buy into the entire distribution? In those days, targeting meant ‘the whole town’ – it was an all-or-nothing situation. The industry did move forward and publishers began to offer leaflet distribution by postcode sector meaning clients could target their distributions more effectively. Instead of buying 30 or 40 thousand houses at a time, they were able to buy in chunks of three or four thousand cutting back on a huge amount of wastage.
That was a landmark move and offered clients a far superior service. However many years have passed since then and, if you look at the industry now, it’s very difficult to see that very much else has changed.
I’m a relative newcomer to this part of the newspaper industry and my peers would argue that leaflet distribution with frees has become more professional and that the whole industry has become better at policing itself through validation, but I think that as a service provider that’s the least we should be doing. I look at other areas of the industry and newspaper print, production, ad design and photography are unrecognisable when compared to the service levels offered 15 to 20 years ago and they’re still moving forward.
Every free newspaper publisher has experienced huge revenue growth from door to door in the past 10 years but where is the investment and why is it that little has been done to move the industry forward?
Effects of clutter
The popularity of this medium in recent years has lead to ‘clutter’. Clutter ultimately leads to poor response. Poor response will undoubtedly result in a move by clients into alternative advertising streams. Unless publishers and agencies unite to address this problem we are all in danger of becoming victims of our own success.
Organising a national network of second day deliveries has long been heralded as the solution to the problem. That means taking the existing volumes and splitting them into two distributions – early week on their own and the back end of the week with the free newspaper. The problem there, of course, is that publishers and door to door providers would effectively be doubling costs for very little or no additional revenue. In effect the distribution of leaflets would become a less profitable exercise.
There is an argument that suggests we could charge more for the early week distribution by offering exclusivity and by limiting the number of leaflets but it’s unlikely that clients will pay the premium or that any premium would be sufficient enough to underwrite the associated costs. Second day delivery would certainly reduce ‘clutter’ and hopefully maintain and perhaps even increase response levels but it comes at a price and brings with it all manner of logistical problems. But what if we could reduce volumes by providing a better service to our customers and at the same time increase our rates?
Round level targeting
This certainly sounds too good to be true but I believe this may be possible and that it could be achieved through ‘round level targeting’.
Round level is a simple principle and is based on the ability to purchase leaflet distribution by individual round. Not to be confused with sub-sector targeting which is the selection of individual rounds based on their location in relation to a particular store or retail outlet, true round level is the selection of rounds based on the profile of the individuals who live at the houses on a round.
It’s effectively doing with rounds what is currently done with sectors but the difference is the profiling is done at full postcode level and not at sector level. To achieve this level of analysis rounds obviously need to be fully and accurately postcoded.
Agencies like the Leaflet Company in London have taken profiling and targeting of postcode sectors to a whole new level using geo-demographic applications like Micromarketer and Insite. They analyse their clients’ data to build up a profile of their customers then cross-reference these with lifestyle classifications such a Mosaic and Acorn. These classifications can all be applied at postcode level which is why individual rounds of circa 200 houses can now be profiled.
The classifications are generalisations based on the principle that most people stay beside similar individuals and live similar lives; eg. if you and your neighbour both live in houses with a garage and 3 bedrooms then you are both likely to have a car and children. The classifications are very detailed and strangely accurate, and the principle is applied to great effect in many marketing disciplines. Mosaic profiling was used to great effect by the leading political parties to enable them to target prospective voters in the May general election and was significant enough to be featured in a Channel 4 News special. Most publishers already practise geo-demographic analysis within their newspaper sales and marketing functions but have not applied the technology in this area.
Postcodes have become a universal currency and the amount of data available at this level, from companies such as Experian, is endless which simply strengthens the case for introducing round level targeting.
The following example shows loosely how the principle can work.
|Current targeting methods||Round level targeting|
|* A postcode sector has 4,000 residential properties.||* The same sector is offered to a client on a ‘round level’ basis.|
|* The property and population profile is very diverse.||* The sector is roughly divided into 20 rounds of 200 houses.|
|* The inhabitants of 2,800 houses meet the targeting criteria but the remaining 1,200 do not.||* Each individual round is profiled and 14 of them meet the targeting criteria.|
|* With a 70% match the sector is likely to make it onto the schedule so 4,000 are booked.||* These rounds are booked for leaflet delivery and the remaining six, totalling 1,200 houses, are left off the schedule.|
Although the publisher loses some of the volume, they are in a position to charge a premium for the service and they save on storage, transport and warehouse time. It actually becomes a more profitable exercise because the staff who deliver the item get paid the same rate whether round level targeted or not.
The client benefits because they save on print, production and haulage costs and they only reach the customers they want to target so they should be in a better position to achieve a higher return on investment.
Nationwide solution needed
The problem with round level is that it is only offered by selected publishers in different pockets throughout the country and leading users of door to door will only consider it as an option if the service is available nationwide. Many publishers have not yet grasped the concept and others don’t have fully postcoded rounds or the ability or technology to get there.
Round level could be the next big step for leaflet distribution with free newspapers. It’s getting very close to direct mail but without the cost. It would result in a reduction in clutter, sustain response levels and protect the industry from imploding. It would also give us a very unique selling point over Royal Mail and enable publishers to target customers that don’t currently use door to door because it’s too broad for them.
Who knows, if we can increase return on investment even further, some clients may even re-invest the savings they make and produce more leaflets which they can target more effectively. This would bring us back to the problem of ‘clutter’ but then it would be easier to fund a ‘second day delivery’ network if the first day was more profitable!