Durham daily profits in nonprofit niche p. 17

By: Mark Fitzgerald

NONPROFITS ARE HELPING the bottom line at the Durham (N.C.) Herald-Sun.
"We have taken a very unconventional approach to niche publishing. We call it 'niche with a twist' and have happened upon a formula that has proven to be profitable to us and beneficial for the communities we serve," Toby Barfield, Herald-Sun Newspapers director of sales and marketing, said at the recent Nexpo in Las Vegas.
"We believe it is a sure-fire formula for success in niche marketing."
What the Herald-Sun does is search out nonprofit community organizations that appeal to a desirable demographic and at the same time do work that interests the general population.
In a strategic alliance with a nonprofit, the newspaper produces a publication and delivers it in two ways. The nonprofit's supporters gets the publication directly, usually through the mail; simultaneously, it goes in the paper.
"This dual distribution gives added value to our newspaper, provides a wonderful promotional vehicle to our partner, and gives the advertiser the best of both worlds ? an intense, targeted audience and mass reach, all in one product," Barfield said.
As Barfield tells it, the Herald-Sun hit upon this formula in late 1990 when it contacted WUNC Radio, Durham's National Public Radio outlet.
WUNC was going through some hard times: Funding had been cut by federal and state governments, and it was spending $90,000 on a quarterly program guide that by law could contain no advertising.
At the same time, WUNC had enormous strengths. It was the number-one drive-time station in an area with 32 FM stations ? probably the only NPR affiliate leading its market.
And the station's demographics were an advertiser's dream: 70% of the audience were homeowners with a median income of $52,000 in 1991, 87% were college graduates and 53% had at least one graduate degree.
The Herald-Sun agreed to handle the programming guide, called Listen!, in June 1991. The paper produced Listen!, mailed it to 15,000 supporters who had been getting the radio station's guide, and delivered it to 100,000 households through the newspaper and two ancillary products, the Chapel Hill Herald and Raleigh Extra.
The arrangement rid WUNC of $90,000 in expenses, and by including Listen! in the paper, generated new listeners and supporters.
Listen! has grown to 32 pages, from 16, and now publishes every two months instead of quarterly. The book reserves 50% of its space for advertising, which Barfield said was always sold out. And revenues have grown from $50,000 in the first full year to an anticipated $135,000 for 1994.
Since then, the Herald-Sun has quickly added more of these "niche with a twist" publications ? eight in 1993 alone and two so far this year. Another three are planned by year end.
In 1994, the paper expects revenues in excess of $500,000 from its combined niche products, Barfield said. In addition to profit, however, "the paper is viewed in the community as a champion of a worthy cause ? that of the nonprofit," he said.
"Our real experience has been that advertisers in our niches are not newspaper advertisers, so this has not been switch business," Barfield added.
He said advertisers pay "premium" rates, and the niche publications are priced to earn "very healthy" profit margins from the outset.