From Nexpo: Is Address-Specific Delivery Worth It?

By: Mark Fitzgerald With the digital and packaging technologies available now, newspapers can deliver tailored packages to specific household addresses. The question is, should they bother?

Maybe not, a top circulation executive at the paper that pioneered address-specific delivery (ASD) suggested Monday at the Nexpo trade show in Dallas.

At the same time, a prominent consultant warned that papers must intensify their targeting and personalization efforts -- or lose share to competitors such as direct mail and online.

The Arizona Republic got into ASD more than five years ago, but the effort has yet to pay off in a big way, said Jack Saunders, director of administration, circulation for Phoenix Newspapers.

"Advertisers are not really ready for it," he said. "They don't have a plan for it, and they don't really see a strategic value in it."

Spotty advertising support, in turn, kicks off a vicious cycle in which delivery becomes inconsistent and inaccurate because carriers are not delivering the ASD packages frequently.

On the other hand, route-specific delivery, or RSD, has been much more of a success at the Republic, Saunders said.

Advertisers like the ability to saturate a targeted neighborhood with their messages, he said. Largely because of its RSD capability, the Republic has been able to win away all the market's grocery store ads from competitors, and on its best food day, Wednesdays, it delivers from 200 to 500 unique packages, Saunders said.

RSD also attracts "non-core advertisers" who previously avoided the paper. After its start, RSD revenue grew 300% in 2003 -- and were able to expand by 20% in 2004. The paper expects another 20% growth this year, Saunders said.

The Republic's ASD and RSD programs rely on three technologies.

Packages are assembled using the circulation software Circ2000, advertising software SAOE and Market Focused, and BURT production software.

All carriers are issued an electronic notebook called SoftBook. Before delivery, they download sequenced delivery lists that include special instructions and product mixes. When carriers arrive at distribution centers, their bundles, in order, are waiting at their individual tables.

Route-specific packages follow ZIP Codes, while address-specific packages can be mixed according to geography, demography, or so-called "advertiser transactional data," information about customers gleaned, for example, from frequent-buyer cards.

Newspapers need to kick up their targeting a notch, Barbara Cohen of Kannon Consulting warned.

Many newspapers still cannot deliver advertising accurately at a ZIP Code level, but increasing numbers of advertisers want to drill down farther than that, she said. Her survey of preprint buyers showed that 70% would accept delivery at ZIP Code, but when they were asked what they preferred, 27% want deliveries zoned down to the size of a census block, while another 17% prefer newspaper carrier route-sized targeting.

"We have to react, because there are other [media] who can do that right now," Cohen said. With Sunday penetration slipping, newspapers may soon have no choice as TMC (total market coverage) products become more important delivery vehicles, she said.